The First Step To Buying An Annuity

This is an old idea that’s going to be a bigger part of what I request of people who make appointments with me.  Aggressive sales are so prevalent that many people become defensive about solving retirement problems.  Frustration grows because a lot of you pursue answers to retirement by attending a seminar of one type or another.  Advisors who host these meetings are eager to monetize the expense and will jump right into trying to sell an annuity before any of your other needs are met.  In most cases it’s even worse because a single product is offered as a solution to every person in the room, regardless of personal position or financial goals.

I can tell you with absolute certainty that this problem has prevented thousands of people from creating an optimal retirement plan.  The problem comes because everyone has several issues to settle while designing a plan and a high-pressure annuity sale is the primary focus of the advisor when it may not be the most important thing for the consumer.  You have to put your primary concern first and handle one issue at a time.

Ashok Ramji started the podcast with me and can speak to this topic in detail.  That’s why I have him here today because it’s kind of revisiting a topic we covered in one of your very first episodes.  I have also convinced him to join AST so we can access and help more people find simple solutions to the biggest retirement concerns.

In the earlier episode, we talked about sales and distribution of annuity products.  Money drives everything and more than just the agent is incentivized when you buy something.  It doesn’t need to be seen as a bad thing as long as you understand that it exists so you can tell if there’s a conflict of interest.  Rushing headlong into the decision of whether you should buy an annuity is no way to start retirement planning.  And it often leads to making mistakes as well.

This new idea is something I’ve used in part for a few years but will be a part of nearly every conversation I have going forward.  Take a step back and consider all of your goals.  Sure, you are all here because an annuity might be a part of your plan, but maybe it’s not the first thing you should consider.  I’m really good at telling whether people need an annuity and lots of times I am able to convince certain people to avoid it altogether.  It aligns with my goal to make sure everyone gets only what they need or want and my opinion has nothing to do with it.

Here we go… when considering retirement, take all of your concerns and list them in order of importance.  I’ve found that most people have no more than five things to deal with.  It could only be a couple things but might be as many as ten or more.  Things like guaranteed income, long-term care, market volatility, fees, Roth conversion and legacy, just to name a few, are the most common concerns.  Often, a husband and wife will need to do it separately so they can talk over the differences and get on the same page.

Deal with number one first.  Then go to number two.  It’s simple and easy, and will eliminate the frustration that comes from a sales pitch. Just a little time invested will result in more clarity and significantly reduce the stress involved with try to solve several concerns at once.  I met with a man last week who was dealing with selling his business and also trying to figure out the details of a divorce and a retirement plan at the same time.  I advised him to make this list before our second call.  Before the next meeting, the sale of his business fell through and it blew up everything else.  Selling the business was clearly the most important thing and because that didn’t happen then nothing else got solved either.  Someone pitched him an annuity and that’s why he was looking but it was a waste of his time to consider and only added more stress to a very tense situation.  Making the list first would have eliminated a lot of his concerns.

An annuity may well be the first thing you deal with in retirement planning but everyone is different.  Making a list and dealing with one thing at a time will simplify the path significantly.  Time is the most valuable commodity so making this list will save mine and yours.  If you are here only because someone else pitched you an annuity then make a list.  I’ll help you determine whether it’s even the first move you should be making.  Get on my calendar if you want to talk about it.

Bryan

Episode 154: The First Step To Buying An Annuity

Download Episode 154: The First Step To Buying An Annuity on Apple Podcasts

Last Updated on October 4, 2024 by Bryan Anderson