Over my career in strategic finance and now advising high-net-worth families, I have reviewed many annuity contracts. In almost every case, I do not recommend them.
Are Annuities Good Investments?
Annuities are insurance contracts, not investments in the traditional sense. They promise certain guarantees — often in exchange for high fees, surrender charges, limited liquidity, and reduced upside potential. For families with $500,000 or more invested, these trade-offs rarely make sense.
What I’ve Seen in Practice
Many variable and indexed annuities carry total annual costs between 2.0% and 3.5% when you include mortality charges, rider fees, and underlying fund expenses. Even with “guarantees,” the net return after fees is often lower than a simple, well-diversified portfolio of low-cost ETFs.
More importantly, annuities lock up capital and limit flexibility. When life changes — whether for healthcare, family needs, or market opportunities — that lack of liquidity can become a real constraint.
My Clear Position
As a pure fee-only fiduciary, my only incentive is to help your portfolio perform as efficiently as possible over the long term. After reviewing hundreds of annuity illustrations and client situations, I have concluded that annuities are not appropriate for the families I serve.
I do not recommend them to anyone.
Better Alternatives for Income and Growth
Instead of annuities, I focus on transparent, flexible strategies that have served clients well for decades:
- Tax-efficient equity and bond portfolios built on low-cost index funds
- Municipal bond ladders for tax-free income
- Treasury Inflation-Protected Securities (TIPS) and short-duration strategies
- Dynamic withdrawal plans tailored to your actual spending needs
These approaches typically deliver higher net returns, greater liquidity, and far more transparency — all while keeping costs low and conflicts of interest to zero.
If You Already Own Annuities
If you currently hold annuity contracts, we can review them together. In many cases, there are better ways to achieve your income or growth goals without the high fees and restrictions. I will give you a clear, honest assessment based on your full financial picture.
A Personal Invitation
If you have built meaningful wealth and want straightforward, experience-based guidance free from product incentives, I invite you to reach out. We can start with a no-pressure conversation about your current situation and whether my approach might be a good fit.
There is no obligation, and I respond personally to every inquiry.
Alex Boemark • CEO & Founder • Scottsdale, Arizona
Pure Fee-Only Fiduciary • Direct Access • Serving Arizona Families and Select Clients Nationwide
