Considering an annuity or already own one?

If you’re considering buying an annuity or you already own one it’s likely because you’re looking for an investment that seems safe, provides regular ongoing payments and limits potential losses. Sounds great! But there are many different types of annuities with substantial differences between them. While annuities may sound safe and appealing, they’re often complex and can have significant tradeoffs. Successful investors should do their due diligence so they know what they’re buying—and to make sure they understand all of the annuity contract’s fine print, terms and fees.

Fisher Investments does not sell annuities. We never have, and we never will. Why? We believe anything you can do with an annuity, can be done better with other investment vehicles. We have worked with countless clients who were sold annuities that did not meet their needs. Many annuities are complicated products that promise many things, but their features can actually prevent investors from reaching their long-term investing goals.

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Common Annuity Disadvantages

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Layers of fees

Annuities often come with complex, layered fees, which can add up and substantially lower your returns. You may pay a fee for the base contract, an administrative fee, a fee for investing in mutual funds and a fee for an optional guaranteed lifetime withdrawal benefit.

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Inflexibility

Once you purchase an annuity it may be difficult to access your money if you need it sooner. If you face an unexpected expense—anything from medical bills to a new roof—you may incur costly surrender fees that could set you back on your path towards meeting your long-term goals.

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Limited growth potential

Annuities can protect you in downturns, but they can also prevent you from fully benefiting when markets are up. An equity-indexed annuity may guarantee a 3% minimum annual return but cap annual returns at 10%. That may sound OK, but remember stock markets are often up much more than 10% in any given year.

Annuities Come in Many Types

Make sure you understand the details, fees and potential tradeoffs of any annuity you are considering.


How We Can Help

In our experience, investors often don’t fully understand how their annuity works. We can help answer your questions. You likely wouldn’t buy a house without having an experienced third-party inspection. The same logic holds when it comes to doing due diligence on a potential investment. You deserve to know exactly what you’re getting into and whether it’s the best way to achieve your long-term financial goals.

Annuity Evaluation

We created our Annuity Evaluation Program* to help educate investors about the annuities they own or are considering. We believe our fact-finding and analysis can offer you insights into annuity features that you may otherwise overlook or misunderstand, including income, fees, penalties, death benefits, riders and more.

We can help you determine if an annuity is a good fit given your financial goals and your time horizon. If you decide your annuity isn’t the best option for meeting your financial goals, our team may be able to help you convert your annuity into an investment that’s a better match for you.


Risks of Annuities

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Listen to our founder Ken Fisher discuss the dangers of annuities with renowned investor Jim Cramer

Watch the Video

The Evaluation Process

STEP 1
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Gathering Information
Specific to Your Annuity

Before we provide any information on whether a particular annuity makes sense as an investment for you, we start by analyzing the specifics of your annuity.

STEP 2
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Evaluating the Suitability of
Your Annuity as an Investment

Our comprehensive annuity analysis will review your contract and personal situation at an exceptional level of detail.

STEP 3
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Explaining the Results of
Your Annuity Evaluation

Once our team has the opportunity to thoroughly review the details of your annuity, we will walk you through the various features identified.

STEP 4
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Determining if Your Annuity Is the Right Investment for You

If you are comfortable with your annuity strategy, you are free to carry on without any obligation to Fisher Investments.

STEP 5
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Fisher Investments’ Annuity Conversion Option

If you determine, after this thorough review, that your annuity isn’t the best option for your financial goals, our team may be able to provide assistance.

Schedule a Free Consultation

On the surface, the downsides of annuities aren’t easy to spot. But we can help break down an annuity contract’s complexities into everyday language and help you evaluate if it’s right for your retirement.

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Annuity Insights

Annuities may seem like simple long-term investments products. However, deep in the fine print there are many terms, conditions and variables that can affect annuity returns.

Read More

Annuity Resources

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Annuity Calculators

Understanding how an annuity is likely to impact your long-term goals can be hard. Our Annuity Calculator can help.

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Annuity Guides

Helping you make sense of annuities, their promises, the fine print and if one makes sense for you.

*Annuity Fee Credit Terms & Conditions

Limited offer: Fisher Investments reserves the right to cancel, suspend or modify the offer at any time and for any reason without notice.

Eligibility: The offer is available only to qualified investors who become clients of Fisher Investments and who surrender an annuity, CD, REIT, or mutual fund and transfer the proceeds to be managed by Fisher Investments. Nothing in the offer infers any right on any person to become a client of Fisher Investments. Fisher Investments reserves the right to refuse or terminate any person as a client for any reason. Any request to participate in the offer is subject to acceptance by Fisher Investments.

Conditions:

The maximum surrender cost that Fisher Investments may agree to pay will depend on the actual surrender cost or exit/liquidation charge of the product (excluding capital gains and other taxes) and the value of the total portfolio transferred for management by Fisher Investments. Any portfolio already managed by Fisher Investments will be excluded for the purpose of determining the maximum surrender cost to be paid.

Any surrender cost that Fisher Investments may agree to pay will generally be reimbursed in the form of a credit to the Fisher Investments quarterly investment advisory fee. Installments for ERISA plan assets will only be credited to the Fisher Investments’ managed account that contains the ERISA plan assets. Installments are subject to adjustment based on withdrawals of assets from Fisher Investments’ management.


All payment obligations will immediately cease if the client relationship with Fisher Investments or the account receiving payment is terminated for any reason before the end of the payment period and no further installments will be paid. Payment periods can last over ten calendar quarters or longer.

Risks: there is no guarantee any proceeds from any product mentioned above managed by Fisher Investments will achieve any specified level of performance, or that performance will be any higher than what could be achieved within the product. Investing in securities involves the risk of loss. Past performance is no guarantee of future returns.

The contents of this site should not be construed as tax advice. Please contact your tax professional.