The HUGE Limitations of Equity Indexed Annuities Revealed!

The HUGE Limitations of Equity Indexed Annuities Revealed!
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[baudaman]

You should never sell a fixed indexed annuity to someone that needs or will need full liquidity to that money, so your first point is mute for a respectable agent (even though most good annuities will allow you to take out 10% per year without penalty). As for the fees, fixed indexed annuities usually have $0 fees, it's the variable ones you have to worry about. Not sure why you think they have high fees, just do your own research. The reason the commission is high is because the money is locked up for 10 years. 10 years with AUM fees of 1%/year will generate more commissions (keep in mind the commission from the annuity is paid from the insurance company, NOT the clients money). You have generalized the returns, but it is important to understand these products are NOT bought for market returns. They are primarily for principal protection, legacy, and lifetime income (although there are cases where the annuities can far exceed market returns in some years). The bonus is there for death benefit and lifetime income. Again, if you need access to that money in full, you shouldn't buy an annuity, so the bonus is very much real. No one under 50 years old should buy an annuity unless they are loaded with money. You also seem to ignore sequence of return risk if you retire during a recession. An annuity is a great vehicle to keep some of your money safe and guarantee income, and allows you to be more aggressive with your other investments. Great video, but you are both a bit under informed when it comes to fixed index annuities. I would encourage you both to learn more because there are many cases where they make great sense. However, I appreciate your take!

[slimdawgwoof]

Given rising interest rates, could there be a place for the right FIA as a bond alternative? With the goal not to replace equities but with the goal to do better than bonds.

[jmntherd]

Not really within the scope of financial advice, but why is it like this? Why can't you find annuities with rock-bottom costs?

[trackguy]

Do you also miss out on the dividends? Fidelity has that as another draw back

[missouri]

Wow, have you even watched your own video. I have 2 FIA's and mine is nothing like you discribed. So if you are wrong on this what else are you wrong on. Both mine have done well for the last 8 years. You would have had me in how did that work out during the last 8 years. I have loss faith in you.