on Apr 24th, 2006Annuities are another word for FEEces
As a tourist, finding your way around a foreign city, especially if you don’t speak the native language, can be a challenge. Throw in the fact that you’re a little hard of hearing and not so spry in the legs and you just might find yourself sitting on an open-decked bus taking in the sights. It’s not your first choice of experience, but sometimes life doesn’t offer optimal conditions for pursuing your passions.
Finding your way through the retirement jungle offers up a few scary gorillas as well. Hustlers are lurking up in the trees just waiting to swoop down on their vines like Tarzan and steal your money as you pass by along the crooked trail.
Add annuities to the list of shams and scams that are being peddled to seniors for their “benefit.” The reality, quite often, is a King Kong-size ripoff that eats away at your principal under the guise of safety and security. It’s a little like the mafia offering to “protect” you in exchange for paying them a fee.
Bottom line: if you don’t understand the gist of what’s someone is selling you, hang up on the friendly voice on the phone or haul your ass out of the broker’s office before you’re left scrounging for food, homeless, reading Upton Sinclair’s, The Jungle, wondering where you lost your way on the path to retirement nirvana.
Investment brokers and insurance agents are selling annuities to the nation’s 36 million senior citizens at a furious clip, often through deceptive or high-pressure tactics. Annuity sales reached $217 billion last year — nearly triple the level of the early 1990s.
Using come-ons honed by marketing experts, unscrupulous agents play on seniors’ fears by suggesting that stock mutual funds, even federally insured bank accounts, are too shaky to depend on. They depict annuities as a secure alternative without explaining the accompanying fees and restrictions.
Seniors Get a Hard Sell on Fee-Laden Annuities
Agents target the elderly’s sizable assets, playing on their fears to push a product that may not meet their needs. Rich commissions drive tactics.
By Josh Friedman, Times Staff Writer
April 24, 2006