Good, Better or Best Way to Use an Annuity?

There are all sorts of good things a person can do with annuities. Some annuities work better than others, depending on your goals. But there really is only one BEST way to use annuities that will help solve nearly all the problems in retirement. I’m not trying to convince everyone to like the products. Each person is entitled to an opinion but if you signed up on my website and continue to read this weekly post then you might as well hear me out.

For some people, it takes time for the solution to sink in. Others quickly notice the difference between a standard application and a creative strategy that produces superior results. Most often, people who have purchased an annuity in the past finally understand exactly how an annuity fits in a portfolio and recognize the benefits of my approach right away.

Last week, one such person sent me an email to that effect. Dan signed up on the website last Thursday and by Friday evening sent me a note to thank me for giving a clear explanation of the products and helping him avoid an additional and unsuitable product. With his permission, I have posted the email below…

Greetings, Bryan;

I Googled the 222 and your three segment videos came up. Listened to all three of them and decided that since I’m 72 years old, 10 years is too long to wait. In 2015, I signed on to $ 250,000 or so of Security Benefit, “Secure Income Annuity”, in three contracts including one IRA. I’m satisfied with this arrangement, guess I need to be at this point.

So, my wife and I have approximately $ 90,000 in 401-k’s; I still work part time and mine is parked in Money Market for the most part until after the next 10%+ correction when I would normally place it back into the S&P equivalent, Fidelity FXAIX. A local purveyor of insurance products and nice evening dinner explained the Allianz 222 without mentioning it by name until we went for an interview. She knew just how to sign us right up that afternoon. It all seemed a little too quick so I requested the brochure which she turned over somewhat reluctantly.

What you are saying is so true. If in addition to performance and stability, you want to retain discretion over your investment, a simple limited duration fixed index annuity is a great tool. This is especially true for folks who just want to be able to expect decent income but are not interested in picking and watching their way through. My 401-k has been successful because I study when to move it all the time but only make up to a couple moves a year at this point. I have trading and hedging strategies for my Schwab based investments in the market. Don’t do anything with bonds.

I wish to thank you for the straight scoop on these investments. They surely have a place in the portfolio of retail investors such as myself. And, as you say, I know there is a right way to handle them. If I were 10 years younger, I would surely be wanting to have the half hour of your time.

You helped clarify my suspicions regarding appropriateness of this product for me at this time.

Thank you so much.

My broad reaction to a message like this is to feel good about spreading a positive message about annuities. Only buy what’s right for you and stay away from the products that don’t work for your situation. Dan is happy with what he’s got and has a good strategy for growth investment but someone tried to sell him another contract that didn’t apply to his situation. I’m glad that he found me and was able to avoid throwing some money at a contract that wouldn’t benefit him.

To speak in specifics I can tell you that Dan seems to be the type of guy who is good at figuring things out. I can look at the wording and overall message and tell you that he knows exactly what I’m trying to help people accomplish. Going piece by piece through his message will give you several indications of how best to approach investment and income planning in retirement. Securing what you need will open up opportunities for greater long-term growth, but you should maintain a calculated approach when taking on risk.

Most importantly I want to remind everybody that my top priority is to help people make good decisions. I’ll make a living from those whose timing and ideology match mine. But for the rest of you, I am always available to lend a critical eye to what you are considering.

If Dan and I had met ten years ago we likely could have done some pretty good things together. But he’s done just fine on his own and there are plenty of you out there that might look back in ten years and say the same as him.

For access to all past newsletters click here…


Further readings

Fixed Indexed Annuity Guide

Fixed Indexed Annuity Withdrawals

How Much Do Fixed Annuities Pay?

Last Updated on May 10, 2024 by Bryan Anderson