BloggingStocks http://www.bloggingstocks.com BloggingStocks http://www.blogsmithmedia.com/http://www.bloggingstocks.com/media/feedlogo.gif BloggingStocks http://www.bloggingstocks.com en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[Low liquidity, low return, high security: Fixed annuities thrive in recession]]>http://www.bloggingstocks.com/2009/07/20/low-liquidity-low-return-high-security-fixed-annuities-thrive/http://www.bloggingstocks.com/2009/07/20/low-liquidity-low-return-high-security-fixed-annuities-thrive/http://www.bloggingstocks.com/2009/07/20/low-liquidity-low-return-high-security-fixed-annuities-thrive/#commentsAnyone looking to document the effect of investor fear in the age of the "Great Recession" need look no further than the recent explosion in fixed annuities. Reflecting growth in other fear-based investments like gold and treasury bonds, sales of the secure, conservative annuities jumped by 74% in the first three months of 2009.

Fixed annuities are a contract with an insurance company, wherein a customer gives the company a lump sum and receives a set interest rate for a period of time. Generally, participants have to keep their money in the annuity for seven to ten years, or have to pay a surrender fee when they withdraw it. Some annuities allow users to withdraw a certain amount for free each year.

Continue reading Low liquidity, low return, high security: Fixed annuities thrive in recession

Low liquidity, low return, high security: Fixed annuities thrive in recession originally appeared on BloggingStocks on Mon, 20 Jul 2009 13:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>annuitiesfixed annuityFixedAnnuityMon, 20 Jul 2009 13:00:00 EST<![CDATA[Tough Retirement Questions: Should I invest in annuities as part of my retirement plan?]]>http://www.bloggingstocks.com/2008/07/16/tough-retirement-questions-should-I-invest-in-annuities/http://www.bloggingstocks.com/2008/07/16/tough-retirement-questions-should-I-invest-in-annuities/http://www.bloggingstocks.com/2008/07/16/tough-retirement-questions-should-I-invest-in-annuities/#commentsFiled under:

This post is part of a series where retirement expert Dan Solin offers simple answers to the ten toughest retirement questions. See all 10.

Q: Should I invest in annuities in my retirement plan?

A: Annuities within a retirement plan are a poor choice.

The big selling point of annuities is that they provide for a tax deferral. However, all investments within retirement plans are already tax deferred. You are paying a premium for a benefit you already have.

Annuities are high commission, high cost, investments, laden with excessive fees and expenses. They usually have stiff penalties for early withdrawals. These issues make annuities an unsuitable investment for most investors even outside of a retirement plan.

The much hyped "death benefit" does not change my opinion. It only kicks in if the value of your investments is less that the amount invested. How likely is it that this will be the case over any extended period of time?

Remember, an annuity within or outside a retirement plan will subject you to tax at ordinary income rates when you withdraw funds from it.

Giving up the historically more favorable capital gains rate is not something that should be done lightly. For the majority of investors, annuities make no sense.

You would be far better off in a globally diversified portfolio of low cost index funds or in a Target Retirement Fund.

Dan Solin is the author of The Smartest Investment Book You'll Ever Read (Perigee Books 2006) and The Smartest 401(k) Book You'll Ever Read (Perigee Books, June 24, 2008)

Tough Retirement Questions: Should I invest in annuities as part of my retirement plan? originally appeared on BloggingStocks on Wed, 16 Jul 2008 14:28:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>401kannuitiesDanSolinretirementWed, 16 Jul 2008 14:28:00 EST