This week, Adam talks about how annuities have gotten a bad rap for a long, long time. They’ve been beaten up, primarily because there is a large sector in the market – especially Fiduciaries like us – who have publicly ripped them apart for all the reasons they deserve to be scolded.

…but are annuities bad investments? Adam’s answer is, “Yes… and no.” So on this episode, Adam explains why they suck, and then shares some situations where maybe there might be a place for them in an investment portfolio after all!

Here are some of the highlights in this week’s video/podcast:

• Annuities are generally expensive, pay high commissions to the advisor who sells them, and those commissions create penalties that need to be paid by the client, should you decide you want to sell the annuity in question.

• When working with a Fiduciary, however, there are no penalties, because Fiduciaries legally cannot charge commissions on any investment product, annuity or otherwise.

• Annuities aren’t all bad, however… they can provide a guaranteed “Pension,” so to speak, filling “expense gaps” that exist between your social security income, pension income, rental income – and whatever your monthly expenses happen to be.

• Annuities can also help anxious investors get access/exposure to the inflation protection of stocks, especially when the investor in question is terrified of the market and its inherent volatility.

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Libertas Wealth Management Group, Inc.
5003 Horizons Drive, Suite 200
Columbus, OH 43220
info@LibertasWealth.com
(614) 543-1350
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Adam Koos, CFP®, CMT® is a CERTIFIED FINANCIAL PLANNER and one of only 2,600+ Chartered Market Technicians (CMT) worldwide, as well as a Certified Financial Technician (CFTe®) thru the International Federation of Technical Analysts (IFTA). He’s been named by Columbus Business First as one of their 20 People to Know in Finance, was a recipient of the Forty Under 40 award, is ranked by Investopedia as one of America’s top 100 Most Influential Advisers, and is the winner of the coveted Better Business Bureau Torch Award for Ethical Enterprising. Adam serves his clients as the president and portfolio manager at Libertas Wealth Management Group, Inc., a Fee-Only Registered Investment Advisory (RIA) firm, located in Columbus, Ohio.

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The audio and video contained herein is intended for those interested in finance, searching for a financial advisor, wealth manager, financial planner, and/or retirement planning. While we are CERTIFIED FINANCIAL PLANNERS (through the College for Financial Planning) and work with clients all over the country, our business is run out of Columbus / Central Ohio. If you are looking for wealth management, financial planning, a financial counselor, wealth advisor, or financial consultant – especially a fee-only, Fiduciary Registered Investment Advisor – we provide money management and financial services for individuals and couples (i.e. – a 401k rollover), as well as business owners (i.e. – 401k, SIMPLE, SEP IRA’s, as well as cash balance and other various retirement plans)….(read more)

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Annuities are a popular financial product that is often touted as a way to secure a steady stream of income for retirement. However, many financial experts argue that annuities suck for a variety of reasons. On the latest episode of the “Money Matters” podcast, hosts discuss why annuities may not be the best option for everyone, but also when they might actually make financial sense.

One of the main reasons why annuities are often considered to suck is the high fees associated with them. Annuities typically come with high commission fees, management fees, and surrender charges, which can eat into the potential returns of the investment. Additionally, the complexity of annuities can make it difficult for investors to understand exactly what they are getting into, leading to confusion and frustration.

Another reason why annuities may not be the best option for everyone is the lack of liquidity. Once you invest in an annuity, it can be difficult to access your money without incurring penalties or fees. This lack of flexibility can be a major drawback for those who may need access to their funds in the event of an emergency.

Furthermore, annuities are often criticized for their potential lack of transparency. The terms and conditions of annuities can be confusing and difficult to understand, which can make it challenging for investors to compare different products and make informed decisions.

However, despite these drawbacks, there are certain situations in which annuities might actually make financial sense. For example, if you are looking to secure a guaranteed stream of income for the rest of your life, an annuity can provide a sense of security and peace of mind. Additionally, for those who have already maxed out their contributions to retirement accounts such as 401(k)s and IRAs, annuities can provide another avenue for tax-deferred savings.

It’s important to carefully weigh the pros and cons of annuities before making any decisions. Seek advice from a trusted financial advisor who can help you determine whether an annuity is the right choice for your individual financial situation.

In conclusion, annuities may suck for many investors due to their high fees, lack of transparency, and lack of liquidity. However, in certain circumstances, they can provide a valuable source of guaranteed income for retirees. It’s essential to carefully consider all factors and consult with a financial advisor before making any decisions regarding annuities.