Fixed Index Annual Reset Annuities.

[lrodptl]

Any opinions on these would be appreciated as part of or as the main depository for retirement monies. Retirement is 6 years away.

[disneysteve]

Any opinions on these would be appreciated as part of or as the main depository for retirement monies. Retirement is 6 years away.

You'll get a lot of opinions and they'll probably all be the same. Stay away from annuities. They are very high cost investment options. The salespeople make huge commissions and show you very rosy projections that are usually very exaggerated.

[KTP]

Actually annuities can make sense for people who are in retirement and need a guaranteed fixed income stream. You can certainly shop around and find some with low fees...you don't have to buy them from a high pressure salesperson.

Plenty of people have pensions, which are not a lot different from an annuity.

[lrodptl]

The Annual reset seems enticing,no lost principle. If a pension and a SS check is expected,does that make annuities less sensible?

[disneysteve]

If a pension and a SS check is expected,does that make annuities less sensible?

It depends. What percentage of your income need will be covered by the pension and SS? What is the size of your investment portfolio?

[Petunia 100]

If I wanted an annuity to have a guaranteed income stream, I would look at immediate fixed annuities. I would consider those offered by Vanguard, so that I would get the very best value for my money.

I would not touch an annuity which guaranteed my principal with a ten-foot pole. A guaranty like that means there is a top as well as a bottom, and I pay a steep fee each year.

Think about it this way: if I have $10, and I want to protect it, how much would I pay? Would it make sense to pay a $20 insurance premium to protect my $10? No, it would not. Would it make sense to pay $5? Nope. How about $1 per year, every year for the next 30 years? Ummm, no.

Remember, as with any insurance product, the odds are ALWAYS stacked in the insurance company's favor, not yours. This is acceptable when you are trying to protect yourself against a big loss; it is unacceptable for all else.

[disneysteve]

Actually annuities can make sense for people who are in retirement and need a guaranteed fixed income stream.

If I wanted an annuity to have a guaranteed income stream, I would look at immediate fixed annuities.

True. An immediate fixed annuity can make sense in certain situations but stay away from any other type of variable annuity products. If you have a pension and SS, you may not need an annuity at all. If you tell us more about your situation, we can give better advice.