Back when this website was launched the main objective was to catalog my notes, research and ideas about annuities. A different point of view and some basic math exercises will prove that a good strategy beats any product. So it stands to reason that I never consider it a good thing when someone buys the wrong contract. It happens too often and it’s the source of all the negativity about this part of the industry.
About a month ago I had a typical meeting with Sandy who is planning to retire in the next year or two. She found me like most other people after having been to a nice steak dinner and then scheduling a personal appointment with the advisor. The result of that was the right mixture of pressure and sweet talk and Sandy agreeing to move almost all of her IRA into an index annuity that wouldn’t work for her situation.
So she pulled all of her money out of the market and fired Ken Fisher but paused for a moment and did a quick internet search before it was too late. Fortunately my ad budget hadn’t run out and her search triggered one of my ads for a product report that perfectly explained the product she was about to buy.
Now, there are a lot of issues with the plan that was proposed to her but the worst thing was obviously the fact that she shouldn’t put all her money in one spot. Her instincts told her the same thing which is why she decided to do some research. Well it turns out that she stopped the transaction before the annuity became a commitment but her assets were in limbo and she was a bit confused about what to do.
One of the things I focus on doing for a lot of people is to simplify problems and solutions. Retirement planning involves some major decisions so it’s common to see people get bound up with the complexity of products and strategies. Sandy was no different and after bailing on the annuity her IRA was then sitting in a money market fund without a manager. She broke her contract with Fisher and had several other people in her ear, trying to get management or a sale out of the situation.
I sensed that she felt a little lost and helpless but I tried to put things in perspective. I asked when she pulled the money from the market. As I recall she told me all securities were sold sometime around the middle of February. Talk about fantastic timing! She didn’t even have to be a US Senator to time the market perfectly.
To make things simple I told Sandy to look on the bright side. Maybe she didn’t have a plan yet but taking the money out of the market saved her more than $250,000. It’s the first time when I’ve ever said her decision to buy the wrong annuity was a good thing. She didn’t actually buy it but the decision to do so turned into a major blessing.
I don’t know if Sandy has made any moves yet but it looked like an uphill battle with all the other people she had been talking to. I was able to help her make one good decision and will be here if she decides to call me back. Most other people are in a similar position right now in regard to not knowing what to do. Well I don’t suggest buying an annuity that doesn’t work for you, sometimes it’s ok if you don’t do anything.
There’s a time that works for everyone so give me a call when you feel like the timing is right for you.
Have a great weekend…