I'm straying from my usual format to address a growing concern that affects more and more seniors and almost-seniors. In this economy and uncertain financial climate, many retirees look for a way to invest their hard-earned lifetime of savings in something "safe." Yet, they don't want to miss out on a way to earn interest at the same time.
There are many financial planners and insurance agents out there who look to take advantage of baby boomers ' parents (or baby boomers themselves) who have money to invest. They sometimes sell a type of annuity called Equity Indexed Annuities, or EIA's.
These financial products usually come with lofty promises -- your money is guaranteed to be safe, so it won't ever go down, but you'll still earn money when the stock market goes up. Sounds great, right? Sign me up!
Not so fast -- there's a reason this sounds to good to be true. There's a catch with Equity Indexed Annuities. Some EIA's are good investments for the right people in the right circumstances. Others are not. How do you tell the good ones from the bad?