It’s a five year commitment for 4% and they say it’s all non taxable. Is that a good deal? They want $10k.
How Good Are Fixed End Annuities With My Bank?
Posted by ifydcat on March 11th, 2010
About Annuities
Online resource and guide about Annuities.
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How old are you? Are you maxed out on all your other tax deferred investment options (401k, 403b, IRA…)?
What is the credit rating on your bank? Who is the insurance underwriter and how are they ranked?
Short answer: insurance products are almost never a good investment option and banks (& insurance agents) are almost always the wrong place to seek investment advice. Insurance products should never be the 1st, 2nd, or 3rd option for those under the age of 60 and for those who have not maxed out their other retirement options.
For $10k you can get several highly rated CD’s paying in the 3%+ range…which should be very competitive with the 4% annuity once you take out the ridiculous commissions and insurance charges (the CD obviously does not have these).
If you want tax deferral and you do not have a 401k type option (if you do, start there), you can put $5,000 in an IRA today and a second $5,000 in Jan 2010.
also don’t forget for annuities, if you die before it’s paid out, they keep your original investment – it does not go to your estate.