The financial press is filled with contradictions.  For every positve article about an investment or financial profuct, there are also negative ones.  This is as it should be, because nothing is perfect and nothing is right for everyone.  The one rule that should be followed, and isn't is honesty. Take a position and explain it, but do it with facts and figures. 

Many of the so-called finanical gurus have taken negative positions on the use of annuites for accumulating wealth, distributing income and deferring taxes. There is nothing wrong with taking a negative stance on a product, just do it with candor and honesty. 

One so called indictment of annuity products is that they charge fees for the tax deferral feature - this is absolutely false.  The tax deferral is the law, it is not an option and no one charges for it. 

Another negative is the surrender charges.  Any medium to long term investment carries the risk of lowered value if you exit before maturity - certificates of deposit have interest rate penalties, bonds carry the risk of principal loss if sold before maturity. Tax deferral is most valuable when assets can grow and compound over time, so a tax deferred annuity should be viewed as a long term investment. 

By the way, to answer another criticism, the cvommission paid on quality annuities is no higher than that paid for mutual funds,  to fee based advisors, or to asset based advsors. In three forms of annuity products, fixed, immediate and index, no investor has ever lost a penny. The last time I looked, investors had lost money in stocks, bonds, and mutual funds on many occasions. 

Every financial product has its benefits and its negatives.  Each has its place in portfolios. What is inexcusable, is making false criticisms and misinforming those who are relying on the author for honesty and integrity. 

For unbiased information on annuities as financial products, contact us at anadolna@associatesgroupinc.com