Let’s start by saying this: annuities can be a legitimate investment and could be the right thing for you. That said, instances where an annuity is the best financial tool for your situation are rare.
As with any financial product, you should always ask yourself, “does this product make sense for me, or does it only make sense to the person selling it to me?” This is even truer with annuities. Scams and elder financial abuse are rampant in the annuity sales industry. The simple reason is that the sale of an annuity usually generates a large commission for the salesperson. The sales pitch usually begins with promises of asset protection and high returns with low or no-risk.
Unfortunately, there are “wealth strategy” companies out there that make a living selling annuities to seniors. In our experience, this problem is only becoming more prevalent. It is the rare case indeed when a 15-20 year annuity is the best investment for someone over 80 years old. In addition to annuities sometimes being inappropriate investments, they can also greatly complicate the application process for Medicaid or Veterans Benefits. In some instances, investing in an annuity can disqualify an applicant from these benefits for years.
If you or a loved one are considering an annuity, please contact our office to discuss how the annuity would fit into your overall estate plan and whether an annuity is really the appropriate investment for you. We do not sell annuities or any other financial products. Instead, we serve as an independent advisor who does not stand to gain or lose a commission. Our goal is to help you create the best financial and estate plan for your individual situation by avoiding probate, minimizing taxes, and ensuring that your assets pass to your loved ones efficiently.
In the event you do choose to invest in an annuity, or need advice regarding other investments in general, be sure to contact a Certified Financial Planner (CFP). A CFP is a financial professional who has the appropriate education, licensing and background to give you sound financial advice. Annuity salespeople or “wealth planners or strategists” that hold no professional designations or licenses should be avoided.