Above is a video describing annuities.

Should I buy an annuity, I've heard a lot of good and bad about them?

Everyone knows the story of the Belle who hated the Beast…but then came to appreciate his kind and gentle soul, despite his very unsexy outward appearance.

In a similar way people have come to realize that a guaranteed 5-7% return on their money, with their principle secure… is a whole lot more attractive than hoping for a 10-12% return in the market and watching their returns and principle disappear down the stock market sewer.

The most common is the fixed annuity. In a fixed annuity, the insurance company guarantees the principal and a minimum rate of interest. In other words, the money you have in a fixed annuity will grow and will not drop in value. Fixed annuities value and benefits paid do not depend on the stock market.

Here’s 6 Reasons Why You May Want to Consider An Annuity

1. Tax deferral on investment earnings (Who doesn’t want to save on taxes?)
2. Protection from creditors
3. An array of investment options, including “floors” (meaning you won’t lose any of your principle.)
4. Tax-free transfers among investment options (meaning you can balance your investment portfolio without paying tax first.)
5. Lifetime income (This is a big deal these days!)
6. Benefits to your heirs

For some people the certainty and peace of mind of not having to worry about the stock market would rather use an annuity or similar product. I help my clients sort out the many types of strategies including annuities and decide whether or not they are suitable or worth investing their money.

For others an annuity just isn't the right long term retirement planning strategy for their liking. Some people just can grasp the principle of risk transfer. We have been conditioned by the media to take on the risk that the companies selling stock, bonds and mutual funds and let them take advantage of the risk transferred to the investor.

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