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Heard the stories about people who are sold an annuity but later aren't sure what they've invested in? I have, because my mom is one of these people. At the urging of a financial adviser at her bank, she recently switched her IRA from money market funds to an annuity because she was told she would get a higher rate of return (although the annuity pays just 4.5%). When I asked her what type of annuity it was, what the fees were and how long the surrender period was, she couldn't answer my questions because the financial adviser hadn't told her.
Michael Furois, a financial planner in Chesterton, Ind., has heard plenty of complaints from clients who were sold annuities before coming to him but didn't really know what they were buying. "It's a complicated product that most people don't understand," Furois says. "If people understood the ins and outs of annuities, there would be fewer sold."

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