An increasing number of seniors have been adding risky financial products to their retirement finances, guided by so-called “elder financial planners” and other shysters looking to make some money out of seniors’ life savings. One of their methods is to sell retirees a deferred annuity. The idea is that just letting your money sit in stable, low-yield accounts is a waste, when you could potentially make greater returns by trying out some of the more complex, exotic options on the table today. But complicated rarely means better in the financial world, at least not for customers. Deferred annuities are one of these products that have the potential to disrupt retirees finances and wreak havoc on their planning.
Deferred annuities are essentially regular annuities, except that you have to wait a predetermined amount of time, usually a number of years, before you see any payout. The premise is that this extra time allows you to accumulate more money in the account, but in fact it give insurers more time to play with your funds before they have to hand it over. Deferred annuities can have lower rates of return than regular annuities, as the portfolios they are invested in often underperform the market and bond prices. Companies like Transamerica and Fidelity and Guaranty are some of the largest sellers of these policies. They are increasingly offering retirees deferred annuities to help with planning out their finances.
Worst of all, unscrupulous financial planners can use them as tools to manipulate unsuspecting elders. Some seniors are tricked into purchasing plans that won’t pay out until they are supercentenarians, and gives the person managing the funds ample time to embezzle and hide funds from relatives of the policyholder. Deferred annuities have all the downsides and none of the upsides of a traditional annuity, and are a dangerous product to purchase when much safer ones are widely available. If you think that you or a loved one may have fallen victim to an improperly administered annuity, call the Evans Law Firm at (415) 441-8669. They handle financial elder abuse cases, power of attorney, consumer fraud actions focusing on investment and banking issues, and consumer product liability cases.