Annuities can be a Good Investment Vehicle

by ac
(grand prairie, tx us)

Annuities like any other form of investments can be a good investment vehicle depending on your needs. An annuity can be a bad investment when you compare it to what the stock market averages over the long haul. What the client will get is the sense of security of knowing that his or her investment will not lose value regardless of the current economic circumstances. For individuals who don't want to have the ups and downs of the stock market this may be the perfect vehicle.

The possible draw back to annuities are the possibility of losing some of the principal if the person decides to withdraw or cash out the annuity in a short period of time. Some annuities have high penalties for early withdrawal. Considering that you will not be getting a high rate of return and if you decide to withdraw early you could be forced to pay a high penalty, an annuity can be a terrible investment.

Like any investment each person must assess their risk tolerance and their particular financial circumstances. If there is any possibility that you may need to withdraw the annuity early and thereby getting charged the possibly high early withdrawal penalty an annuity is not a good investment for you.

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