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Message
re: Fixed Index Annuity – do any of you have experience with them? Update on page 2
Posted on 10/10/14 at 4:59 pm to Sigma
Posted on 10/10/14 at 4:59 pm to Sigma
quote:
Moral of the story: You pay dearly for the assurance of no lost $$. Don't be afraid of a little risk.
Meh, not necessarily. Most index annuities would have outperformed the S&P from 1999-2008, just like most would have underperformed the S&P 500 in the 90s, but that is an unfair comparison either way. A client who is entertaining an index annuity is comparing them to CDs, not a balanced mutual fund or SPY.
Index annuities are one of many financial products that are available to individual investors. They have their purpose and they're a suitable investment for lots of people. The Money Talk board is full of people who are open to a significant amount of risk, and as a result, an FIA is not appropriate.
If you're 50+, I think it is worth looking into, especially if the money is going to be sitting in CDs or money market accounts otherwise.
This post was edited on 10/10/14 at 5:02 pm
1
Posted on 10/10/14 at 6:21 pm to slackster
Good point. The only thing I know about FIAs is what I have read in this thread, but it looks like a funky balanced fund that caps both upside and downside. Seems to me that if you just invested in a conservative balanced fund (which in reality has very little risk), you don't limit the upside, and you don't pay the relatively hefty fees.
But in the end, like you hint at, if that little risk keeps you up at night, maybe a FIA is for you. Oh the days of MM funds returning 5%....
But in the end, like you hint at, if that little risk keeps you up at night, maybe a FIA is for you. Oh the days of MM funds returning 5%....
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