Equity Indexed Annuities: Investing Aint What It Used To Be
Are you being robbed of the ability to make quick changes to your portfolio without suffering costly automatic penalties? This article is part of an ongoing series exposing the dangers of Equity-Indexed Annuities and provides information you won't find anywhere else. Guarding Your Wealth is a nationally syndicated weekly personal finance column written by Jeffrey D. Voudrie, CFP. Mr. Voudrie is the president of Legacy Planning Group, a private wealth management firm that employs sophisticated proprietary strategies designed to protect and grow its clients' investments. Please visit our website, www.guardingyourwealth.com to read past articles in our archive.
March 22, 2004--Heads up, retirees! If you depend on your investments to maintain your standard of living you need to know times have changed. Unless you recognize these changes and adjust how you invest you could be putting your lifestyle at risk.
In todays environment, you need to maintain the ability to quickly and easily make changes to your portfolio. You should be able to change individual investments, change investment products and even change advisors without incurring automatic penalties.
Many of the popular investment products being recommended to seniors today, especially variable or equity-indexed annuities, rob you of this ability. The result is that you can be trapped in an investment that doesnt perform well and no longer meets your needs. Or worse yet, sudden misfortune could cause you to tap those funds unexpectedly.
(Mr. Voudrie responds to questions from readers on an almost daily basis. If you would like clear straightforward unbiased answers to your financial questions, contact e-mail protected from spam bots)
Investing used to be much simpler. It used to be that you could buy stock in a quality company, set it in a drawer, and forget about it. But thats certainly not the case today. Many companies once considered safe investments no longer exist. On top of that, some corporate managers line their pockets, in effect, stealing from their shareholders.
Investing choices used to be much simpler, too. Individual stocks and bonds, mutual funds and CDs were the building blocks of your parents portfolios. But today, you have to choose between thousands of mutual funds, annuities of all sorts, index funds, exchange-traded funds, or TIPS to name a few.
Where to invest has also become more complicated. Recent legislation has blurred the lines between banks, brokerage and insurance companies. You are bombarded by advertising with everyone claiming to have the answers to all your financial problems.
Unfortunately, many of these providers are great on selling you their services, but lousy when it comes to actually managing your money. After theyve earned their commission, they often take the set-it-and-forget-it approach. They rarely adjust your portfolio due to economic and market cycles, corporate scandals and the like. You sure dont want to chain yourself to an under-performing advisor because of high commissions or surrender penalties.
Current scandals in the financial industry have further muddied the waters for investors. There is fraudulent after-hours trading and Big Investors get treated differently from you and me. Highly revered mutual fund companies can become embroiled in scandal.
What if your mutual fund company came under scrutiny? Wouldnt you want the flexibility to move your money elsewhere, without having to worry about earning back the big commission you paid? Or what it youre in a variable annuity with limited choices? You dont want to be chained to any investment or product.
A decade ago, the risk of terrorism in the U.S. wasnt even considered. Now, with the 9/11 attacks (and recently the 3/11 attack in Spain), the risk of a terrorist event and the resulting market upheaval is something every investor must consider.
Personal needs have become more complicated as well. People are living longer so their money has to last longer. Health care costs continue to go through the roof. Lives can change in an instant, so you should have the ability to get at your money if and when you need it, without being forced to pay automatic penalties.
If you are concerned about keeping what youve worked hard for, you must have the flexibility to quickly move your investments to safetysometimes in the matter of minutes as opposed to having to wait until the end of the day. Popular investment products today such as Variable Annuities and Equity-Indexed Annuities do not provide this flexibility.
You wont hear this from your typical broker, insurance agent or advisor. They are the ones trying to sell you a Variable Annuity or an Equity-Indexed Annuity. They dont get it. They dont see anything wrong with you being handcuffed to an investment for 7, 10, 12 years or longer just so they can earn an enormous commission.
Dont do it! Dont let any advisor take away your ability to control your money. There is a better way!
If you would like to know more give me a call toll-free at 1-877-827-1463 or go to www.guardingyourwealth.com. You can also reach me by email at e-mail protected from spam bots. I will be happy to help you in any way I can.
Mr. Voudrie is a Certified Financial Planner, nationally syndicated columnist, and the President of Legacy Planning Group, Inc., a Private Wealth Management firm in Johnson City, TN.
Looking for an energetic expert who is passionate about financial and wealth management? Mr. Voudrie is an excellent speaker who will excite and inspire your audience. Mr. Voudrie is available for a limited number of speaking engagements, television appearances and radio talk shows. For booking information, contact Christine Lavender at (877) 827-1463 or email e-mail protected from spam bots.
Related Articles can be found at www.guardingyourwealth.com under the Guarding Your Wealth Article Archive:
Equity Indexed Annuities: There Are Better Growth Alternatives
Equity Indexed Annuities: There Are Better Alternatives (Stability)
Better Alternatives Than Equity Indexed Annuities
Equity Indexed Annuities: Agents Prey On Unsuspecting
Consumer Alert: Equity Index Annuities
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