Don T Buy Annuities Apr 2026

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. don t buy annuities

The greatest threat to a fixed annuity is the gradual erosion of buying power over time. 5 Reasons Why People Hate Annuities - Trajan Wealth

Unlike a brokerage account where you can sell shares as needed, an annuity typically restricts you to a "penalty-free" withdrawal of only about 10% per year. Once you fund an annuity, your money is

Most contracts impose steep penalties—sometimes as high as 10% or more—if you withdraw funds during the first 6 to 10 years.

In some flexible-premium contracts, every new contribution starts its own multi-year surrender clock, effectively keeping your capital illiquid indefinitely. 3. Inflation and Purchasing Power Risk 5 Reasons Why People Hate Annuities - Trajan

Annuities are notorious for complex fee structures that are often higher than traditional investments.