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Originally Posted by XenOcidE
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Exactly.
Unless you already have some basic understanding of finance, the stock market, and any accompanying terminology, you're probably still dumbfounded at this point. This is odd considering that this article was written as an explanation of retirement options.
I think it would be best to start of with a definition of annuity as it relates to retirement:
Annuities allow you to accumulate tax-deferred funds for retirement and then, if you desire, receive a guaranteed income (this process is called Annuitization) payable for life or for a specified period of time: generally a term of five or ten years. (
http://www.annuity.com/annuity_answers.cfm)
So when you retire, you continue to receive a paycheck based on the amount you invested in your annuity and how much interest you've accumulated.
However, it's never as simple as it sounds. The whole point of these investment schemes is for "The Bank" to get at your money. They pretend to be offering you a service that you could probably provide yourself, then they use your money to get themselves money (by investing it). They give you a miniscule amount of the return they're actually making on
your money to keep you content enough to allow them to continue getting rich off of your money. As if that wasn't devious enough, they actually charge you for certain services in order to keep more of the money you shouldn’t have ever given them. (Random anti-bank rant...)
I’m going to try to get into this more later but it will probably be long so I think I may make an article out of it.