HUNT VALLEY, Md. (TheStreet) -- I am a fee-only financial adviser, which means I can lead my clients to any investment on the planet if it is best for them. In addition, I am a fiduciary and must lead my clients to the best possible investment -- again, for them. Yet, despite opportunities to invest in some of the cheapest, commission-free annuities, I rarely recommend a client ever invest in them. In fact, I think it's a safe bet none of my colleagues who are also fee-only, fiduciary advisers would consider an annuity a wise investment.Annuities are little ticking time bombs of taxable income that will either blow up in the hands of the owner or definitely in the hands of the heirs. In only slightly less violent imagery, annuities are like the Trojan horse, rolled inside your camp without understanding what's inside.
|Annuities are like the Trojan horse, rolled inside your camp without understanding what's inside.|
- Insurance companies are guaranteeing a return of your investment at the time of death.
- Guaranteed accumulation account that really is not your money, so do not ask for it -- but you can use your guaranteed withdrawal based on this fictitious guaranteed accumulation account.
- Guaranteed withdraw rate that can either be principal or return and only your heirs will know for sure.
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