Retirement Products That Aren’t Worth Your Money

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1. Reverse Mortgages
The concept of a reverse mortgage seems simple enough because you use the equity on the home to fund for retirement which guarantees income. They are a legitimate retirement product, but they still have their cons. These cons include high closing costs and fees and a limited equity. Therefore, if you are using it up you are leaving less for your heirs if they inherit the home.

2. Junk Bonds
Retirees should stay away from high-yield bonds that don’t perform well unless the economy is doing great because if it isn’t then they could very well be financially crushed.

3. Variable Annuities
As you approach retirement, annuities seem to make more and more sense. This does not apply to those who are already retired. Reason being is due to the fact that an annuity is where you invest money and gain income at a later date. Current retirees are suggested to do an immediate payout annuity that requires you to pay an up-front sum, which then provides you with regular payments immediately, but this can have fees up to as much as 3.5.%.

4. Whole Life Insurance
You are always suggested to have whole life insurance and it sounds like it is a great idea but it is generally way more expensive than term life insurance. The investment returns are usually less than you would find anywhere else.

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