Which is better investment?
My friend signed up (against my warnings) for a annuity after a steak dinner at a gatheringh. He needed to ensure that he did not lose his principle. He didn’t. They paid him every year for about 20 years and then NOTHING. He didn’t lose principle but he also did not thrive. Do you know who thrived? The annuity company.
During the last 10 years I (some would say recklessly) invested willy nilly in various stocks and tripled my money. I can now start taking it my retirement RMD for the rest of my life. MY friend will only be able to rely upon his Social Security.
Everyones situation is different but he fell for the ‘never lose his prionciple’ scheme. I would have gladly taken his money and invested it and paid him the yearly amount.
For a start, learn what an annuity is:
Thats a pretty broad question…with a lot of moving parts. I would personally not ever buy any kind of annuity because of the lack of liquidity. You can invest in the market and get in and get out whenever you want. There are very few investments that will out perform the S&P 500 Index over time.
I prefer to do banking with banks, saving and investing with brokerages, and insurance policies with insurance providers.
So, are annuities for people who are averse to the stock market and don’t want to deal with US treasury instruments or CD purchases?