The greatest threat to a fixed annuity is the gradual erosion of buying power over time. 5 Reasons Why People Hate Annuities - Trajan Wealth
Once you fund an annuity, your money is often "locked away," making it difficult to respond to life's emergencies.
The case against annuities often centers on their high costs, lack of flexibility, and the risk that they may not keep pace with economic changes over a decades-long retirement. While marketed as "personal pensions," the trade-offs required to secure that guaranteed income can significantly erode your overall wealth. 1. Prohibitive Fees and Hidden Costs
Agents can earn 1% to 10% of the total contract value in commissions, which are often "baked in" but ultimately reduce the starting value of your investment.
Variable annuities can carry annual fees exceeding 3%, including mortality and expense (M&E) risk charges, administrative fees, and management fees for underlying subaccounts.
