9 Reasons to Never Buy Annuities. Ethan S. Braid, CFA

Annuities are terrible investments. There are many reasons that you should not buy them. Annuities are taxed as ordinary income and do not qualify for low capital gains or qualified dividend tax rates. Annuities do not qualify for stepped up cost basis which means your beneficiaries will inherit your cost basis and pay income tax on any gains in the contract. Annuities have extremely high commissions and fees. Annuities are generally illiquid for many years. Agents who sell annuities have conflicts of interest. You can expect limited ongoing advice when you buy an annuity. Many annuities have misleading riders. Buying an annuity limits your investment options.

HighPass Asset Management is a Fee-Only Fiduciary Financial Advisor in Denver, CO.

00:00 Intro
00:42 1. Annuities are Taxed as Income
01:25 2. No Stepped Up Basis
03:04 3. High Fees
04:30 4. Massive Hidden Commissions
05:02 5. Lack of Liquidity, CDSC
06:12 6. Conflicts of Interest
07:20 7. Limited Ongoing Advice
08:45 8. Misleading Riders aka Optional Benefits
11:10 9. Limited Investment Options