By Terry Savage on September 06, 2015 |

Hi Terry,

I heard you last night on the Jim Bohannon show and appreciate your advice. I am 57 years old and am financially sound.

I was recently approached about buying a Prudential Highest Daily Income annuity. Based on research I did, the fees seem to very high and the performance is about the same as that of my low-cost Vanguard funds.

Would you please give me your opinion on variable annuities?

Thank you,

Terry Says:  Well, I must say I agree with your assessment.  I’ve done it — purchased a Prudential annuity, and found out when the market crashed they moved ALL my money to a money market fund inside the annuity — giving me absolutely no chance to exceed my previous “high water” mark — thus limiting their exposure. Although I did my research, I never realized they could determine my investments, and take them out of the funds I had chosen.   I’ve come to believe that all these annuities have either fees and costs that lock you in (and pay the agents’ commissions) OR hidden quirks that mean the insurance company always comes out ahead of you!!

I came out ok, because I had a 7 percent (!!) crediting rate on my capital — so there was no reason to dump out.  But at today’s low promised guaranteed rates, not such a good deal.  Remember, you can’t withdraw your guaranteed withdrawal base — you can only use it to annuitize!   If you want someone I trust to review this investment either contact Jeffrey Oster ( or go to  I trust both of those guys!


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