1. Those Who Sell Annuities
By sell, I mean, like a used car “old school” salesman. Those who push all the strengths of the product, like the aforementioned guarantees, but neglect to point out the weaknesses. There is no such thing as something for nothing. All of these guarantees come with a price. And that price may be higher fees. Or, when the advisor tells you there is no fee, did he/she mention the penalties you will incur if you take all the money out before the end of your contract period?
2. Those Who Hate Annuities
3. Those Who Use Annuities
Somewhere between the love and the hate lies the truth. As I mentioned before, an annuity is an insurance product, and with any insurance product, you need to establish insurable need. If my pension and social security will cover all or most of my monthly expenses in retirement, do I need to pay an extra fee for an annuity that provides guaranteed income? Absolutely not! But what if I need $7000 a month to live on in retirement, but all I can count on is Social Security, which will pay me $3500? Those who sell annuities tend to solve this by overfunding, leaving no or little liquidity. Those who hate annuities literally say, in times like now, when stocks are down and dividends are cut or abolished, “just live on less for awhile “. What? Really??