Quote:
Originally Posted by llamanca
Just curious why you say this. My Advisor suggested transferring some of my investments to an annuity. Thank your for sharing your thoughts.
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Because the only people that make money on Annuities are those selling them.
It sounds great. You deposit X amount and get paid Y amount over a period of time, guaranteed! That's right, you'll never have to worry about not having money! It's perfect, free money!
Or not. Annuities are almost ALWAYS bad investments. You hand over a pile to a company that invests your money, turns a huge profit and leaves you with some scraps. They are always capped on upside gain and your return almost never includes any dividends a stock or index may produce.
They would only make sense if you need to produce income for someone incapable of even the slightest bit of management. If you had a child of limited mental capacity and needed to ensure they could live after you're gone. That kind of thing. That said, there are better options in trusts and such, much beyond the scope of this original post.
To the OP: Yes, the market will crash. You have to ask yourself will you need your funds to actively live or can you weather an 18 month downturn(including your own mortality). If you can weather a crash, then "balls to the wall". In that case, get some low cost index funds or ETFs, like Vanguard VTI or an S&P 500 fund, put 90% in there, 10% in money market and enjoy the returns. That's Warren Buffet's strategy and mine too. Although I'm young enough, I have 95% of my investments in index funds and growth funds.
Conventional wisdom is you start to get more and more conservative as you age. A family member has not done that and in the last 25 years has seen his original retirement money quadruple. He literally has 4x as much money now than he did when he retired. He's 86 now, and still mostly in index funds but has toned down to about 20% in bonds, 10% in cash.