Annuities range from being simple to incredibly complex and as an investor it is your responsibility to learn what you may be buying. The simplest form of an annuity is when you give an insurance company a lump sum and then they provide you with an income stream for a period certain (or life), this is known as a Single Premium Immediate Annuity. The more complex products are deferred annuities and usually are variable or indexed based.
Why Hasn’t an Investment Firm or Insurance Company Created this Product?
After reading the twelfth article about how there is yet another generation woefully unprepared for retirement and how the 401(k) is a terrible product I started to think about what an investment firm or more likely in this case an insurance company can do to engage in my generation and the answer is so simple. Create and market a defined benefit pension. Private Pensions Are All But Gone It is no secret that private pension participants are decreasing. One Social Security Study found that, The percentage of workers covered by a traditional defined benefit (DB) pension plan that pays a lifetime annuity, [...]