Young Research & Publishing Inc.

Investment Research Since 1978

Disclosure

  • About Us
    • Contributors
    • Archives
    • Dick Young’s Safe America
    • The Final Richard C. Young’s Intelligence Report
    • You’ve Read The Last Issue of Intelligence Report, Now What?
    • Dick Young’s Research Key: Anecdotal Evidence Gathering
    • Crisis at Vanguard
  • Investment Analysis
    • Bonds
    • Currencies and Gold
    • Dividend Investing
    • ETFs & Funds
    • Investment Strategy
    • Retirement Investing
    • Stocks
    • The Efficient Frontier
  • Investment Counsel
  • Dynamic Maximizers®
  • Retirement Compounders®
  • Free Email Signup

Heads I Win, Tails You Lose

October 3, 2019 By E.J. Smith

The promises in some variable annuities are too good to be true–a realization being made by the insurers that made them. You can learn more here:

Variable annuities combine a 401(k)-like investment account with the equivalent of an insurance policy. They appeal to investors approaching retirement with a promise of guaranteed regular payouts that could reset higher if the policy’s underlying investments fare well.

Yet the products usually have higher fees than plain-vanilla “immediate” annuities, which deliver an annual payout in return for a lump-sum payment. (Variable annuities are complicated enough—and consumers are confused enough about them—that the Securities and Exchange Commission issued an investor bulletin this month explaining how they work.)

Some insurers that sold products with rich guarantees are trying to dissuade longtime customers from holding on to their contracts. In addition to offering to buy back variable annuities with benefit guarantees, insurers are limiting investment choices, raising fees and blocking additional account contributions.

The goal is to limit future payouts on accounts whose balances have tumbled at the same time ultralow interest rates hurt insurers’ own investment returns.

Insurers have sent out a flurry of letters in the past year informing annuity owners that their accounts are being shifted into more-conservative investment options—unless the owners opt out.

Share this:

  • Email
  • Twitter
  • Facebook

You Might Also Like:

  • Your Retirement Life: Investment Planning in One Chart
  • Four Ways to Win the Investment Horse Race
  • Your Retirement Life: Sweet Home Alabama
  • Author
  • Recent Posts
E.J. Smith
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris.

Please get in touch with E.J. at ejsmith@youngresearch.com
Latest posts by E.J. Smith (see all)
  • Why Work When Taxes Take It All? - June 28, 2022
  • Your Survival Guy in Paris: Awakened from His Slumber, “Dad, I’m Going to London” - June 27, 2022
  • Your Survival Guy: Clearing the Decks, Buying a Boat, Seeing the World and More - June 24, 2022

Search Young Research

Most Popular

  • Will the Fed Stick to Its Course?
  • RECESSION? Dow 25,000, $8 Gas, Rising Interest Rates, Spell Mid-term Crack Up
  • The Power of a Compound Interest Table
  • Investing During a Recession
  • Swiss National Bank Surprises World with Rate Hike
  • Vanguard Wellesley (VWINX) vs. Wellington (VWELX): Which Fund is Best?
  • Kellogg Cuts Loose with Split Plan
  • Corporate Bond Yields: What You Can Earn Today
  • Apple Shares Resilient in the Face of Recession
  • Predictions of MEGA-SPENDING on Metaverse

Don’t Miss

Default Risk Among the Many Concerns with Annuities

Risk and Reward: An Efficient Frontier

How to be a Billionaire: Proven Strategies from the Titans of Wealth

Could this Be the Vanguard GNMA Winning Edge?

Cryptocosm and Life After Google

Warning: Avoid Mutual Fund Year End Distributions

Is Gold a Good Long-term Investment?

How to Invest in Gold

Vanguard Wellington (VWELX): The Original Balanced Fund

What is the Best Gold ETF for Investing and Trading?

Procter & Gamble (PG) Stock: The Only True Dividend King

The Dividend King of the North

You’ll Love This if You’re Dreaming of an Active Retirement Life

RSS The Latest at Richardcyoung.com

  • 10th AMENDMENT: Dobbs Decision a Win for States’ Rights
  • What Just Happened? Fixing Its Historic Mistake
  • Why Work When Taxes Take It All?
  • Oil Demand Increasing Despite Growth in Renewables
  • Why Is the USDA Burying the Facts on Low-Carb Diets?
  • These Normal Household Products Could Disrupt Your Endocrine System
  • Zelensky Asks G-7 for More Assistance Fighting Russia
  • AFGHAN WITHDRAWAL: State Department Accused of “Coverup”
  • Saudi Oil Is Different from U.S. Oil?
  • Your Survival Guy in Paris: Awakened from His Slumber, “Dad, I’m Going to London”

About Us

  • About Young Research
  • Archives
  • Contributors

Our Partners

  • Richard C. Young & Co.
  • Richardcyoung.com

Copyright © 2022 | Terms & Conditions

loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.