Close Close

Retirement Planning > Retirement Investing > Annuity Investing

Moving to the dark side

Your article was successfully shared with the contacts you provided.

We know how many of you feel about annuities, but stick with us. As cover subject Jeff Karelis notes in our April issue, Financial Planning 101 dictates that every client — and every client situation — is different, to be treated as such. If that’s true, how can an entire product class be wrong for every client?

We’ve spoken with a number of past cover subjects recently, and most now echo Karelis on the annuity question. The Wall Street Journal reports many high-net-worth advisors are beginning to agree. It’s part of the reason immediate annuity sales are hitting a record high. So much of the past frustration centered on complexity and fees, especially with variable products. That’s why simple, streamlined immediate annuity products are now all the rage.

“But for those grappling with investment losses, annuities today have an undeniable appeal,” the paper writes. “At first glance, they offer a way to restore some financial security to what are supposed to be your golden years. There is even evidence that retirees with regular paychecks are happier than those who rely exclusively on 401(k)s to supplement their Social Security.”

Of course, we’re still concerned (as are you) about suitability and how well they’re integrated in the overall boomer portfolio. But a shedding of pre-conceived biases (see behavioral economics) is rarely a bad thing.


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.