Swiss annuities?

Recent comments on our site indicate an interest in “Swiss annuities.” Since we often talk about both investing and Switzerland, in its many aspects, we think that spambots found us!

However, other people may have similar questions – are Swiss annuities as safe as Swiss banks? Does IFO recommend buying some? Well, no. As faithful readers will know, we never recommend individual investments.

But what’s a Swiss annuity? What’s an annuity? We turned to one of our favorite investment websites, Investopedia, for information.

Turns out there’s an official website for Swiss annuities. Since WordPress flagged the questions/comments using the term as possible spam, we were suspicious of the comments on this post of ours, but we allowed them. (IFO is not immune to flattery!)

Here’s what we learned: annuities are a form of insurance with elements of mutual funds. You all know what we think of mutual funds. You pay someone to make essentially the same investing mistakes you could make. Does that make sense? No.

We believe we have shared our opinions of insurance, but to recap, can think of few more useless uses of our money. But we do buy fire insurance, auto insurance and liability insurance. We’ve never had a fire, we had a tiny, reimbursed auto collision repair – it was the other guy’s fault!, and no one has sued us. However, DDH had it and we’re following his prudent lead.

But remember insurance companies have huge buildings, many employees and giant real estate holdings. Insurance executives are extremely well paid. That’s money that came from our premiums and wasn’t spent on covering losses.  Let’s not even talk about medical insurance, except to say we didn’t have any for decades, then we were forced to accept it when we went on SS.

For more on annuity companies, we read in Investment News that the industry is increasing its lobbying efforts.

As improved life expectancy stretches the retirement timeline for 76 million baby boomers, the insurance industry is hoping for unprecedented growth for income-generating investment products such as annuities.

Increasing the acceptance of these investment vehicles, however, requires more than well-honed sales pitches to investment advisers, who often are skeptical about their cost and complexity. There’s another audience in Washington that can influence how the market develops.

So, your premium payments are covering those lobbying expenses, plus political campaign donations. Does this seem smart?

IFO recommends doing serious Internet searching on the subject before you even THINK of buying an annuity, Swiss or otherwise.


About InvestingforOne

I've been investing in various assets by myself using a discount broker for many years. Over that time, I've developed some theories that others might find useful. Plus, there is more to investing than money. Time, talent, work, friends, family all go into developing a good and satisfactory strategy.
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