Negative piece on index annuities, quoting Kent Smetters from the Wharton School calling them "a terrible idea for older people."
Smetters' comments echo consumer advocates who worry that these annuitized products are too expensive and too confusing for the elderly investors to whom they are aggressively sold.
After commissions and performance caps, these products may underperform CDs -- even at today's low rates -- according to another professor, William Reichenstein of Baylor.
Advocates of the products point to favorable tax treatment.
Suitable or not? You tell me. (Seriously!)
Meanwhile, Investment News has more.