Indexed annuities are not investments in stocks. Wrong! The insurance company does what you could do on your own:
Buy a zero-coupon bond for example for $650 that guarantees you $1,000 in 10 years and then invest the remaining $350 in stock options - yes, options, not the actual stock. If your investment works out you will make more than your $1,000 but if you lose, at least you get your $1,000 minimum return.
Don't know much about Zero-Coupon bonds and stock options? Great, then consider buying an equity-indexed annuity. EIA, for short, is what they used to be called but not anymore. Now they are just called indexed annuities. There is much to know about them however (in my next post) but for now:
Do not compare a fixed indexed annuity to stock investing - it is not a proper comparison. It is more like a bond investment with a little extra opportunity.
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.