Page 142 - Ready Set Retire

Stephen J. Kelley

What’s the Story with Hybrid Annuities?

“Now waitaminnut,” I can almost hear you shouting. “Didn’t
you just spend the whole last section trashing annuities? And
now you want me to believe they are the best things for
income?”

Well, yes. But not a variable annuity where you take all the risk
and pay out exorbitant (immoral?) fees. Here we are talking
about fixed annuities where the insurance company takes the
risk. And not just any fixed annuity, a hybrid fixed annuity.

“I knew it,” you say. “I just knew this whole book thing was
just a scam to trick me into buying an annuity! My broker was
right! You can’t trust anyone!”

Okay, just for a moment, let’s say that’s true. Let’s stipulate our
whole goal here is to sneak up on you and foist an annuity on
you while you’re not looking...instead of, say, an oil shale
partnership. What might happen? You might:

• Create a personal pension plan you can never outlive.
• Receive market-based returns with no (zero, zip,

nada) risk to your principal and accrued interest.
• Ensure guaranteed income for the rest of your life at a

higher rate than with any other investment—without
giving up control of your money.

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