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I just had lunch with a good friend who has recently been to a free presentation at a local hotel put on by an IA salesman. He has been invited back to a followup presentation this coming Saturday. He asked me what I thought and I told him to run away as fast as he can. But I felt I was not as articulate as I should have been trying to explain the problems with IA's.

I would like to send him a link or two for some reading material. I am afraid he is still going to go just to listen this Saturday and they may reel him into the boat.

Do any of you know of a good primer on Indexed Annuity pitfalls suitable for someone who is just marginally savvy when it comes to money and investing. I would appreciate any link you could point me to.

thx, bhm.
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Do any of you know of a good primer on Indexed Annuity pitfalls suitable for someone who is just marginally savvy when it comes to money and investing. I would appreciate any link you could point me to.

https://www.dropbox.com/s/cbzvg74iyeyfwt6/SPX-monthly-1950-2...

This came out of a long debate/discussion thread here on TMF several years ago. In particular, look at the "Chart" tab.

To find some other links, do a internet search on "problems with Indexed Annuities" google, bing, duckduckgo, etc.

In a nutshell, the pitfall is that there is a cap and a floor on the returns you get. The cap hurts you more than the floor helps you. A lot more. Plus there are high fees, many tucked away in small print and footnotes where it is hard to find them.
In many contracts, the ceiling cap can be changed (read: lowered) unilaterally by the company whenever they feel like it.
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"Do you know of a good primer on annuities."

We have an Annuities discussion board in Fooldom. See: https://boards.fool.com/wish-i-had-not-reacted-this-way-3474...

It's pretty quiet over there but it does collect postings on the subject from the various boards.

The insurance industry is clever in creating products that make good sales pitches. But they also have ways of limiting performance.
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I followed Pauleckler's site and stumbled on this (summarizing pros and cons of various annuities and basically supporting rayvt's conclusions):

https://clark.com/personal-finance-credit/investing-retireme...

If nothing else, it gives you a basic outline which helps you formulate the right questions to ask the salesman.
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ray, Paul, and pops - thank you for your replies. From the links you provided, I sent three articles to my friend which hopefully will lead him to decide to skip the next rubber chicken dinner & IA sales presentation.
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