Don, it doesn't matter what type of annuity it is, they have no business being inside a 401k/403b plan. If the plan has a fixed annuity, younger employees are missing out on growth. If it is a variable annuity, then you're getting raked over the coals with fees. Both of which are reasons why employees should think twice before putting money into a plan masked as any type of annuity.
Annuities should be used for converting assets into guaranteed income for retirement, but not as a savings vehicle.
Jeremyof IN9:27AM July 30, 2008
You really lose creditability when you fail to differentiate between Variable annuities (which are securities) and Fixed annuities (which are insurance products. The only thing they share is the tax deferred aspect, beyond that there is little in common. Risk,fee's,expenses are synonymous with variable annuities,while fixed annuities i.e.fee free,no risk,guarantees are what make this instrument so attractive. Each has their own particular niche,but readers should know there is a difference.
U.S. News Money takes a contemporary look at happenings in the financial world and aims to help young investors get going with their portfolios--or just sound cool at cocktail parties.
Reader Comments
Back to blog
Jeremy of IN 9:27AM July 30, 2008
Don of FL 10:30PM July 29, 2008