Re: Annuities...are they a crap shoot?

On 2008-03-28 12:13:26 -0700, V <vfr44@[EMAIL PROTECTED]
> said:

> My wife has a broker acquaintance that wants her to invest her
> retirement fund (all of it) in a Pacific Life annuity. The annuity is
> supposed to double your money in 10 years or sooner. I noticed on the
> cover of the Pacific Life brochure that it states "may lose money"
> 
> What sort of guarantee do these things have if the company goes belly
> up? With today's rocky financial climate how safe are these investment
> vehicles? BTW, I think my wife would have to pay $6600 in commissions
> on this deal.


If I were you, I would not pay much attention to the financial 
stability of that particular company, nor to the "may lose money" 
disclaimer, but instead would focus on that extraordinary $6600 in 
commissions and ask for convincing evidence that the monetary return 
from the annuity would justify such an expense. Of course, that 
evidence will not be forthcoming. She might hear something like "But 
this is an excellent fund. It has done great in the past ...", etc., 
etc. But how many thousands of times has that been said. The chances 
are that she would come out far better by leaving the money where it 
is. The fact is that by moving the funds into a new product with a 
$6600 cost just for making the move, she would be taking a risk and a 
gamble far larger than the gamble that the new fund, or any fund, "may 
lose money" because of market fluctuations.

If I had to choose between accepting a "deal" like that one, and 
offending and losing a friend, I would choose to lose the friend. 

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