I am interested in hearing your feedback regarding Equity-Indexed Annuities, or any annuities really. Is this a part of your FIRE strategy? Would you recommend these products to your peers or do you think these are not appropriate as part of your retirement strategy.
stay away! There are a whole mess of different annuities and life policies based on flavours of the same <strike> scam </strike> insurance company approach, with almost always front loaded fees and high transaction costs/ low or zero liquidity.
the deal works like this. Most people think they will not die unusually early. Or even on time. Statistical data tells me if I have a large group of people buying my annuity/universal life policy etc, some will die early. But people all think they will live longer than average, so more than should will fear outliving investments or savings. Its the standard and real benefit of a life insurance policy. Ok.
I now take that insurance 'value' and combine it with similar statistical analysis of the market. I take all the upside if the market goes up, and insure the downside. I charge fees to do that. There is no free lunch.
So avoid those things. Save 2 exceptions, IMHO
1. Pure term life insurance. If you have big liabilities, like you're 34 and have a young family, mortgage, go online and buy some term life. If you are healthy, it'll cost hardly anything. Get enough to cover liabilities until kids are old enough and stash big enough. This is a real product that does offer real value to the purchaser who needs it (not someone FIRE already tho')
2. A % of your stash after FIRE and at probably 60 or 65 could be used to buy fixed standard annuities that provide a guaranteed income stream until you die, unrelated to the market completely. You can get inflation adjusted or not, single or married. This is like reverse life insurance. Because some people will die, the insurance company can pay more than say, TIPS yield, and invest the money meantime. You get a higher yield, they take all the risk wrt market, but if you die you'll loose the money. However, if you are FIRE and have a big stash anyhow, do you really care? Again, available competitively online.
All the