Misrepresenting Annuities

Any financial tool can be misrepresented.  Annuities are among the investment products that are often least understood and most misrepresented. 

For example, one of my clients met with an annuity salesman and was told that if he put his money in a specific annuity he was guaranteed never to lose money and to have at least 20% more in ten years.  Is this true?  Well, in a way, but only if the client didn’t ask for his money and his 20% gain after 10 years.  This client put some money into the annuity three years ago, during a bull market for stocks.  Based on his latest report he would get back a lot less than he put in if he tried to cash out.   Some things are not as they seem.

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