Are Annuities Really a Safe Investment Alternative?

Are Annuities Really a Safe Investment Alternative

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Many people are asking if annuities are a safe investment. Let's look at the facts.

Not all annuities are the same. Fixed annuities provide safety from volatile stock markets, unlike variable annuities. This safety can be affected by the insurance company providing the guarantee. Immediate annuities have predetermined contract terms, but does that make them safe?

Safe means different things to different people. Also, you need to ask yourself what you are seeking safety from. Are you looking for safety from the market fluctuations, the economy, or the economic system as a whole?

Different types of annuities carry different levels of safety. While a variable annuity carries some risk associated with the market, some offer death benefits which are guaranteed to not be below your original investment. Fixed annuities on the other hand do not carry market risk as your money is protected from market losses. However, you may own a 2-3% annuity and inflation rises above 20%. So, again safety is relative.

You should conduct your own research and find the product that is right for you when choosing an annuity. While one product may be marketed as "safe", the meaning of safety could very well be different from the safety you are looking for. You should research not only the annuity product itself and how it matches your retirement needs, but also research the company that is providing the annuity.

Do not rely on credit ratings alone. A simple statement to remember is that if you do not want to lose your initial investment, a variable annuity is not safe for you. Just as if you need to make high returns like you can in the stock market, a fixed annuity may not be the "safe" vehicle you need it to be.

It is important to match your personal financial goals with the annuity you are purchasing. Your money is most important to you and you alone. So do your own research and don't be talked into products you are not comfortable with. Only you can decide what is safe for you. Head over to Annuity StraightTalk.com for more info on picking annuities safely.

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