It is unfortunate, but there are many myths floating around about the benefits and advantages of annuities. If you believe the false facts and figures, it is safe to say that you will avoid investing in an annuity.
Below are four of the most common annuity myths:
You only have one option – a variable annuity. Nothing could be further from the truth, but for whatever reason many people believe this. Just because you are investing in an annuity does not mean that you have to attach future payouts to the stock market. In addition to variable annuities, you can also consider fixed annuities, immediate annuities, and equity indexed annuities.
There are no tax benefits of investing in an annuity. This is one of the most harmful myths because it is entirely true. The fact of the matter is simple: you can take advantage of tax deferred growth when you invest in an annuity. In other words, you are not going to pay taxes until you begin to withdrawal the money.
- It is difficult to buy an annuity because they are entirely too difficult to understand. Just like any investment vehicle, you need to do your homework before moving forward. You shouldn’t believe that annuities are overly complicated, though. In most cases, the company you are dealing with will be able to explain your options as well as the process for investing.
Tip: you never have to deal with a pushy “salesman.” Many people avoid annuities because they think that a commission-driven company representative is going to push them into the wrong type of product. If you are being pressured, move onto another company and find somebody who is more in tune with your personality and investing goals.
- The big name companies offer the best annuities. While it is natural to gravitate towards companies you have heard of, they are not your only option. Lesser known companies may offer better performance and service. At the very least, contact several big name providers as well as some that are smaller. This will give you a good idea of what is available, across the board.
Don’t feel bad if you have believed these myths in the past. You are definitely not alone. The good thing is that you can change your ways, and learn the true facts about annuity investing. There is a lot of good information out there. And if you have any specific questions, you can always call one of the many companies that sell annuity products.