Personal Investments • Talk me out of these USAA annuities

First, forgive me if this sounds horribly naive; that's why I'm here.

I have filled out paperwork for to annuities - a fixed guaranteed growth with a 5-year term at 5% annually; and a fixed index 7 year tied to S&P 500 with a first-year cap interest rate of 10% and then "tied to the S&P aggregate" for the successive 6 years.

According to the insurance agent, salesman earning commissions on insurance productsthere are no fees associated with either account other than the usual early withdrawal fees, which I am not concerned about because I have other funds elsewhere. There is also a 10% of funds withdrawal allowed per year after year one for both accounts.

The reason I am considering this at all is because my 401k is barely up to what it was nearly 3 years ago before the market crashed - I mean, corrected.

Is there a reason that I should not opt to protect my principal by putting funds into these accounts? I keep reading horrible things about annuities and how they are only profitable for the insurance companies.profits come from your money

Please ask if I've omitted any critical information. Thanks for any education on this.

to op:
1
You are being sold an insurance product where part of the percentage returns to you consists of your own money being returned to you.
IE: you give them 100. They give you back 20 dollars per year for 5 years, plus a dollar.
2
You are not protecting your principal with an SPIA/Annuity?
3
Buying (not investing) an annuity in response to the valuation of your 401k is not logical.
What is the nature of your 401k?
You base your 401k valuation for a period of 3 years, only 3 years.

Consider posting for a portfolio review in forum format for a comprensive look at your financial structure and long term strategy, before considering an annuity.
Portfolio Review Request
https://www.bogleheads.org/forum/viewt ... =1&t=6212

j

Statistics: Posted by Sandtrap — Wed Jul 03, 2024 6:53 am — Replies 11 — Views 948

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