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Showing posts with the label alternativestoannuities

What is a Superior Substitute for an Annuity?

The simplest way of explaining how annuity companies operate is that they act as the middleman using your funds to invest elsewhere. A better option than buying annuities would be to replicate some of the things they do and do it yourself. This option allows more control over your money, no high fees, and 100% of the yield on your investments.  The stock market doesn’t always have a positive yield on a 5-year basis. So, considering a 5-year strategy, a better and low-risk investment could be investing in high-yield savings accounts, and Certificates of Deposit (CD). Currently, investing in a CD portfolio is a great 5-year investment given the high interest these are paying. After the 5th year when the CD matures, you can look to invest in US treasuries for 2 to 3 years. Then with a longer term in mind, you can invest in the S&P 500. This timeline can provide you with the “safety” you are looking for in annuities, without all of the caveats that come with those annuity co...