Annuities

The speaker discusses the safety of annuities in light of the recent financial turmoil.  He walks through the different types of annuities and talks about the risks associated in the case of default by the insurance company who issued the annuity.  It is very important to understand the financial integrity and strength of the underlying insurance company.

The speaker provides a detailed understanding of equity indexed annuities.  He suggests that equity indexed annuities provide a safe haven of near riskless products such as a certificate of deposit; however, they allow the investor to participate in increases of the stock market up to a point.  Annuities are tax deferred, allowing you to take advantage of triple compounding. 

The speaker provides a basic understanding of an annuity contract.  Annuities are similar to insurance policies, sold by insurance companies, which guarantee a stream of guaranteed income at retirement.  Many investors will purchase annuities to serve as individualized pension plans while others will use it as a means to accumulate tax -deferred earnings without planning to annuitize.