TALKING TO A BROKER or insurance salesman? Here are 10 things you’ll likely never hear:
- “Wow, your 401(k) has great low-cost institutional funds. There’s no way you should roll that money into an IRA.”
- “Do you know that you could buy these funds outside a variable annuity and pay a fraction of the price?”
- “Sure, you could make that trade—but probably the only person who will get richer is me.”
- “My hunch is, this closed-end fund you’re buying will be at discount within a few months of the IPO.”
- “Given the markup on that bond you just bought, I hate to think how much you’d lose if you sold right away.”
- “Of course, unlike a 401(k), you won’t get a tax deduction or matching contribution when you buy this cash-value policy.”
- “I know the B shares look like a no-load fund, but the annual expenses will eat you alive—and the back-end commission will nail you if you try to escape.”
- “Actually, I’m not required to act in your best interest.”
- “So you pay 1.5% a year for the fee-based account and 1% for the funds you’ll be buying. Meanwhile, the stock market will probably earn 6% a year over the next decade, while inflation runs at 2% and taxes take maybe 1 percentage point out of your gain. Let me know if you need any help with the math.”
- “I doubt you’ll make much with this indexed annuity, but things look pretty great from my perspective.”
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