- Fixed annuities have a guaranteed rate of return, while variable annuities fluctuate based on market conditions. While fixed-rate annuities are fairly safe, investors can lose thousands on variable-rate annuities if market conditions change, according to Smart Money.
- Annuities feature high fees compared to other types of investments. Investors who decide to cash out before the annuity's maturity date will pay thousands of dollars in surrender fees, according to The Motley Fool. In addition to surrender fees, investors will also pay mortality and expense charges and management fees on their annuity.
- Although sales of mutual funds rose in the same year, both fixed and variable annuity sales hit a ten-year low in 2010, according to an article from Financial Planning. The article suggests that investors are moving away from annuities due to high prices, fees and lack of returns.
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