BEWARE---the slick Annuity Salesman!

CGFC Blog

Beware the slick annuity salesman!
I have always had a problem with putting a tax-deferred item into another tax-deffered item. What am I talking about?
Be careful who you deal with, some advisors aren't to be trusted. For example, an IRA is a tax-deferred account. An annuity
is tax-deferred account. What good would it do you to put an IRA into an annuity---no good at all. Why? You already have
tax deferment in the IRA, there is no need to do it again! The main reason advisors do is to create a commission, even though it
will cost the client a lot more in fees. Why? Greed. Annuities usually come with high fees, especially variable annuities, except for a
very few companies. Even fixed annuities can be high in fees. Many people who I help didn't know before I told them that most annuities have a CDSL or a contingent deferred sales load. This means that there is percent of the total amount you have to pay back to the company if you decide to the surrender the annuity prior to holding it until 59 1/2. An an example would be 20 year, 15 year, 8 year or 7 year CDSL. With a 15 year CDSL you would have to pay a fee of 15% of the value of the account to get out of it it the first year, if you wanted out of it in the second year it would be 14% and so on, under it gets down to zero. You may also have to taxes on at your regular income tax rate if you surrender---depending on what went into the annuity. BE CAREFUL! Please let me know if you have any questions about annuities, I dont sell them, but I do help a lot of people who have bought bad annuities get it into something much more reasonable without paying taxes.