2783: Is an Annuity the Worst Investment a Young Person Can Make? by Jeff Rose of Good Financial Cents

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🗓️ 4 July 2024

⏱️ 10 minutes

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Summary

Discover all of the podcasts in our network, search for specific episodes, get the Optimal Living Daily workbook, and learn more at: OLDPodcast.com. Episode 2783: Jeff Rose explains why annuities, typically seen as suitable for older individuals, may not be the best investment for young people due to their limited growth potential and penalties for early withdrawal. While annuities might provide some benefits within a diversified portfolio, Rose emphasizes the superior advantages of Roth IRAs and 401(k)s for young investors. Read along with the original article(s) here: https://www.goodfinancialcents.com/should-you-buy-annuity/ Quotes to ponder: "One of the best things that my mom ever did for me as a young adult was to start an investment strategy for me." "Why does a 24-year-old need a fixed annuity? Turns out it was a very legitimate question." "If you’re young and don’t mind some fluctuation in your investments, it’s hard for me to make the case that an annuity makes sense." Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This is Optimal Finance Daily, episode 2, 783.
0:05.0	Is an annuity the worst investment a young person can make?
0:09.1	By Jeff Rose of Good Financial Sense.com. And I'm your host and personal finance enthusiasts,
0:15.0	Diana Merriam.
0:16.0	We're going to jump right into our post for today
0:19.0	as we optimize your life. Is an annuity the worst investment a young person can make by Jeff Rose of Good Financial
0:30.8	Sents.com.
0:37.9	Annuities are regarded as being best for older individuals near retirement who have accumulated respectable savings and can
0:43.0	young people also benefit from an annuity?
0:47.0	One of the best things that my mom ever did for me as a young adult
0:50.0	was to start an investment strategy for me.
0:54.0	She wanted to get me started with investing,
0:56.2	so she set up an investment account
0:58.0	with her financial advisor for my benefit.
1:01.0	At the time, I was young, clueless, and completely indifferent.
1:05.0	But when I began my career as a financial advisor,
1:08.0	I finally became very interested in what investments I had.
1:12.0	So I did some inquiring. Turns out my mom's
1:15.9	financial advisor was purely an insurance agent and the investment I had was a
1:21.5	fixed annuity paying 4.5%. I remember thinking to myself, why does a
1:27.6	24-year-old need a fixed annuity? Turns out it was a very legitimate question.
1:34.0	What is an annuity?
	...

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