I don’t like annuities. I know there are ways they can make sense in some portfolios, but for the majority of investors they’re a bad move for several reasons. First, they’re pushed on unsophisticated investors by well-trained salesmen. Second, the fees, especially surrender fees, can be devastating if you need your money in an emergency. Third, many investors make the egregious mistake of investing in tax-deferred annuities in a tax-deferred account. Unfortunately, common sense is lost on most because of the aggressive sales tactics of the guys closing the deal, who are compensated heavily for success. And that’s why there’s around $1 trillion of annuity money in U.S. retirement accounts. Don’t let it be yours.
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