Annuities ARE Exciting

About five or six years ago I went to an annuity conference for a large brokerage company. It had been several years since I had been to any industry meetings so I had some interest in spending a few days with fellow financial services professionals. The meeting was in San Antonio so I took my wife with me and went a few days early to enjoy a new city and see a few bands we like. Texas country is some of the best music in my opinion and if you haven’t seen someone play a trombone and keyboard at the same time I suggest you look into it.

My wife, at the time, worked at the local gym in Whitefish, a fancy monstrosity that spelled doom for the once-cool mountain town. Although nice, it was used by most as a place to see or be seen. Sometime before we left she was mentioning to a friend that we were going to San Antonio. 

A group of local investment advisors from a national firm overheard the conversation and asked her why she was going to San Antonio. She told them about the annuity conference and the other plans we had.  One of them responded, “Oh, annuities, that’s really exciting…” The sarcasm was obvious and the rest of the guys laughed about it.  

She told me about it when she got home and I laughed about it too. I said, “Those guys don’t know what they are talking about. An industry that holds more than $2.5 Trillion in assets and accounts for more than $200 Billion in sales annually is pretty exciting to me.” And that speaks nothing of all the ideas I’ve shared about the excellent benefits and additional opportunities that are available when a portfolio is structured to include annuities.

We’ve been over this a lot. The guys in Whitefish probably just have tunnel vision and are too hyper-focused on securities. Not a single one was in the business before 2010 so they think investment management is all gravy. But most advisors are biased simply because of competitive positioning. You can listen to whomever you want but I want to make sure everyone expands thinking just a bit so they can make sure everything is done for the right reasons. Not a week goes by without hearing a negative opinion about my advice from a professional in some other corner of the financial services industry. I’m used to it by now and these days there are a lot of investment managers eating their words.

Rather than getting into the difference among investment philosophies again, it seems like a better idea to remind everyone of the stuff I’ve shared over the past several months. If considered in entirety, it would be hard for anyone to claim that annuities aren’t exciting. There’s so much you can do in retirement if you want to protect assets and there is literally no other asset that can do it.

About a year ago, one of the readers on my list asked me to comment on an annuity article written by someone at Morningstar. There were several inaccuracies and an overload of bias so the article was anything but informative. But this is the type of information you need to learn to analyze. Going back to the previous year, I shared a few stories about how other advisors had asked me to make a recommendation for their own retirement. The debate is not settled… unless you ask me.

Pros and Cons of Expert Annuity Advice

Newsletter February 21, 2021

Even Advisors Ask for My Advice

Newsletter June 22, 2019

There are fundamental reasons why I’m such an annuity advocate. Most of those reasons are not understood by the majority of investment advisors. Picking investments is dramatically different than planning retirement, where you need every advantage you can get. I’ve explained my philosophy in several places and sentiments are changing from both consumers and professionals alike. I wrote about the annuity advantage in the early days of the newsletter, and then Ashok and I covered it again in one of the first podcasts.

The Case for Annuities in a Retirement Portfolio

Newsletter September 5, 2018

Annuity Straight Talk Flex Strategy

Podcast July 15, 2021

And in the past month, I’ve shared a couple really good ideas that can ease your mind while the world seems to be going to hell. I showed you how the beat the market with an annuity which is an idea that proves you don’t need to take much risk unless you’re getting bad advice. I then showed you how total portfolio growth was actually improved over the past 20 years if you used an annuity. No matter what anyone says, the numbers don’t lie.

How To Beat The Market With An Annuity

Newsletter January 25, 2022 and Podcast February 5th, 2022

Why Not An Annuity?

Newsletter and Podcast February 26, 2022

One thing you need to understand is that many of the answers to the questions you have did not exist 15-20 years ago. As you were saving for retirement no one had any idea of what you should do when you got there. 95% of financial publications suggest that you should keep things the same when you distribute assets, mostly because that’s where the majority of the focus has been for the past 100 years. I hit the gas pedal when pulling a loaded horse trailer up and over a mountain pass in Montana. On the downhill side, I work the brakes.

More than $37 Trillion is held in IRAs across the United States, over $7T in 401(k)s and $19T in bank deposits. Do you think anyone has a vested interest in keeping things as they are? Everyone wants your money but only you can decide where it goes.

I don’t expect most to understand my philosophy because I’ve been working on finding the answers for my entire career, and they have not. If it’s different than what you’ve heard elsewhere, there’s a good reason for it. Anyone who tells you annuities are not exciting is either ignorant or lying to you. The proof is above and everywhere else on this website. If you’re not convinced, then make an appointment and I’ll give you the chance to prove me wrong.

Further readings

Are Fixed Indexed Annuities a Good Investment?

Fixed Indexed Annuity Taxes

Who Shouldn’t Buy a Fixed Indexed Annuity

Podcast about Annuities are Exciting

What You’ll Learn from this Episode:

[3:39] Annuities are exciting

[7:11] The answers to over half the questions that you have when it comes to annuities don’t even exist 15-20 years ago.

[8:03] The fundamental reasons why annuities are beneficial in retirement?

[13:27] The advantage that annuities have over bonds and retirement portfolios.

[15:11] What types of things you can’t do with an annuity?

[16:24] When looking for annuities, you’re not looking for top-length growth. You’re just looking to preserve some of your assets.

[17:11] You don’t have to watch your market day in and day out because you’re protecting yourself.

Key Quotes:

[7:23] “This is something that requires you to change everything that you thought about annuities.”

[13:48] “You have to understand that there’s a better option, and there might be another benefit in doing it.”

[10:31] “So if you’re helping people to retirement, that’s accumulation. At retirement, the game changes, and that’s the truth.”

Last Updated on April 1, 2024 by Bryan Anderson