Registered financial representative Atul Makharia is the vice president of investments at Mantei & Associated in Lexington, South Carolina. In this role, Atul Makharia assists his clients with choosing financial products, such as annuities, that will help them build wealth.
In the past, an annuity was a guaranteed way for consumers to save for retirement and for other expenses. However, in recent years, many financial experts have argued that annuity is no longer a competitive product.
A major issue is that it does not really yield as much money for retirement as compared to other investments. Moreover, when factoring in inflation, the amount a person would receive is drastically reduced.
A Market Watch article written this year illustrates just how inflation affects modern annuity. In 2000, a 65-year-old consumer who paid in $100,000 into their fund would receive $700 a month. Today, that figure amounts to $469.
Experts state this reduction in the investment amount is influenced by market fluctuations. Another factor is that this money is typically invested in bonds, which are close to three percent whereas 30 years ago they were at 10 percent. Other issues relate to hidden costs in annuities. In fact, some companies have resorted to commission-free annuities to address this issue.
The annuity is still a great investment, but investors are going to have to be savvier. To minimize risks and maximize earnings, investors must diversify their portfolio, which involves placing money in aggressive as well as conservative investments. Another approach is to hold off on purchasing an annuity because interest rates do not influence the payout as much.
Headquartered in Anaheim, California, Centaurus Financial, Inc. is a national independent broker/dealer registered and licensed to offer securities, investment advisory services, and insurance products. Centaurus Financial is a member of both the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). Centaurus Financial is also registered as a broker/dealer and a Registered Investment Adviser with the Securities & Exchange Commission (SEC). For more information about Centaurus Financial, please visit www.centaurusfinancial.com
