Ask Terry Questions Annuity investments

Annuity investments

By Terry Savage on June 26, 2020 | Financial Planning / Retirement

What’s your opinion on annuity investments in general? I have about 100k that I want to diversify I’m 59. The advisor has a 5yr fixed annuity for some of it. What’s your thought?

Terry Says

This is not a one-sentence answer! Could I ask you to read the big chapter in the new edition of The Savage Truth on MOney. It’s available on Amazon. Then you’ll really understaqnd.
I have no feelings for or against annuities — and I own some myself — but it all depends on the product and the circumstances.
In the case of a five-year fixed annuity — a lot depends on the rate. Would you be willing to tie up your money for 5 years? A 10 year Treasury note now pays about 0.75%. But rates could rise in the next five years. If you’re locked in, you could be sorry down the road.

And it’s all part of the big picture of your income situation, retirement plans, other tax-sheltered accounts, etc. Sorry I can’t give you an easy answer!

By the way, ask your financial advisor if he/she is a FIDUCIARY — and will put that in writing on his company’s letterhead. Ask if he fully discloses all commissions and hidden payments (on other products, not this) and if he promises to put your interests ahead of his own.
AND if he is filing a CRV (he’ll know what this is — and you will too when you read my next column!) as part of the new SEC Reg. Best Interests!

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