Letters to the Editor

Annuity analysis doesn't account for all products

The May 1 financial Wall Street Journal article on annuities by Brett Arends needs clarification.

Several generalities and common misconceptions in the article are based on old products. The article does not address the newer indexed annuity products. These products have the same principle protection as the traditional annuity product, but with the potential for much greater gains. Rates of return are not locked in or static and can increase each year with interest rates. They do not have any fees taken from principle (unlike a variable annuity). At the end of the annuity period (some as short as one year), one can walk away with the value and upon death the value goes to beneficiaries. (One does not lose control of the money.)

Funds can be withdrawn each year without penalties with these new products. No mention was made of the fact that over almost 20 years, banks have failed at a rate almost 40 times greater than insurance companies. At the end of the article, at a minimum, the author should inform the public to explore the fixed/indexed annuity as a savings alternative.

Richard Gillette

Senior financial advisor

RetireRX Inc.

Hilton Head Island