Trying to get your money back: Annuity roadblocks

Published: Thursday, October 4, 2012 at 05:50 PM.

Paul Sullivan wrote a fascinating September article in the New York Times entitled, “A Guaranteed Return on an Annuity Has Limits After All.” Sullivan writes, “Annuities are sold with the word ‘guaranteed’ sprinkled through the marketing material, but it turns out that the definition of guaranteed may vary. Prudential Annuities has suspended the ability of policy holders with 14 types of benefits to make further contributions.” Many people purchase annuities with the idea that they will continue to contribute and thus grow their money, but many firms offering annuities are calling a halt. 

“You’re going to see every major insurer out there who has products that are considerably higher than what the market would see today do this,” said Brian Fernstermaker, managing principal at Envision Consulting Group. So two years after offering an annuity product, the insurance company has realized it is going to be tough to make good on promises made and is withdrawing the product from the market.

That same $500,000, invested wisely in the market and tactically managed and monitored, can bring significant income generation without the handcuffs of losing control of your own money. And of course, there are no limits on future contributions. Annuities gained popularity because they promised guaranteed income.  Now that same income generation can be accomplished through investing in blue-chip stocks that pay dividends and bonds that pay coupons while maintaining control and 100 percent ownership of your money. In all likelihood, you earned 100 percent of it.

Margaret R. McDowell, a chartered financial consultant and accredited investment fiduciary, is the founder of Arbor Wealth Management, LLC, (, a fee-only registered investment advisory firm located near Sandestin.

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