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Here’s what you should understand about annuities before you buy

Annuities, despite promising guaranteed income during retirement, are widely misunderstood. Indeed, over the years some common myths about annuities have become accepted as fact.

Here are some of the most common misunderstandings about annuities, and how to avoid their pitfalls.

1: Annuities are expensive

There are fees associated with some annuities, just as there are fees to buy and sell a stock. And it’s important to consider all of those fees. Yet there are low-fee and even no-fee annuities. But to truly say whether an annuity is too expensive, investors need to first ask, “Compared to what?” Annuities can create an income that you can’t outlive.

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