Two Years Later: Did He Regret Buying the Annuity?
Welcome back to Part 2 with Dave, one of my clients who offered to share his entire research journey into buying an income annuity.
In Part 1, we covered how Dave got here – Goldman Sachs dropping him right at retirement, Fidelity recommending an annuity, his months of research, the conflicting advice, and ultimately why he decided to move forward with an income annuity as part of his overall retirement strategy.
But here’s where it gets really interesting. That was two years ago. And the market has done pretty well over the past two years.
So the big question everyone wants to know: Does he regret it? Should he have waited?
Let’s dig into the numbers.
The “What If I Waited?” Question
Dave brought this up to me last week. He wasn’t angry or second-guessing himself, but he was curious. The market’s been up. What if he had waited?
So I did some quick math – actually, more than quick math. I ran him through the beginning parts of the calculator I use to analyze these decisions.
Here’s what we found: To replicate what Dave got two years ago would cost about 30% more today.
Think about that for a second.
If you received 30% market growth in your assets over the past two years, then it’s a wash. If you didn’t get 30% growth, then you’re actually behind where Dave is.
“It turns out it’s still on the positive side for me because when I happened to purchase it, it was a really good time to get it. It still worked out the best even though the market’s been up.”
And here’s the thing – I don’t think the market’s going to catch it. Even with good performance, the timing of when he locked in those rates was valuable in itself.
Still Confident Two Years Later
After looking at it in hindsight and running all the numbers, Dave is still very confident and comfortable with the decision he made.
And that’s what it should feel like.
You shouldn’t be lying awake at night wondering if you made the right call. You shouldn’t be checking the market every day thinking “what if, what if, what if.”
The annuity gave Dave something that’s hard to put a price on: certainty.
The Real Reason Dave Wanted to Share This
Dave spent literally six months researching this decision. Taxes, RMDs, IRMAA, bond strategies, growth portfolios, legacy planning – all of it.
“The whole reason that I wanted to take 20 minutes of my time is because it literally I’ve been doing this for six months, all the things that we’ve talked about between taxes and RMDs and all that stuff. It’s just been a long arduous journey to come up with that and I thought at least if I can narrow people in on what I selected and why it might help them and give them some tools and things to consider.”
And here’s what I appreciate about that: Dave understands that these are all the little questions people ask that would be just a small component of all the things he considered.
You don’t necessarily need to do a six-month deep dive like Dave did. But you should sit down and focus on it for a couple of months. It’s an important decision that deserves that amount of commitment.
The Mental Aspect Nobody Talks About
One thing Dave kept coming back to – and I think this is huge – is the mental side of retirement planning.
He’s financially astute. He can manage his own portfolio. But here’s what he said:
“I try to manage my own portfolio, and while I can do it, I don’t like to do it. It’s just stressful when the market’s down and you feel like you need to do something.”
Not everybody wants to spend their retirement doing that.
And even beyond just managing the portfolio, there’s the question of: What happens to your spouse if something happens to you?
I never talked to Dave’s wife directly, but I assume she was privy to the decisions being made. And here’s what I’ve noticed over the years: It’s always one person in each couple who takes a greater interest in this stuff.
The person who’s NOT involved? They’re always really excited about the guaranteed income. They’re thinking, “I don’t want to do what you’re doing with all these calculations. You’re telling me there’s an easy path where it’s just in our bank account every month? I like that.”
Protecting Your Spouse (Not Just Yourself)
This is something we didn’t talk about enough in Part 1, but it’s critical.
“What I didn’t want to have happen is, let’s say I pass away because I do all the numbers and then some Yahoo comes along and tries to sell my wife on something that is not good and then she ends up putting money in that. We don’t have to worry about any of that. This money is already set aside. It’s already going to be coming in. There would be no reason for her to panic or have to talk to someone that might convince her to just do something not so good.”
And believe me, if heaven forbid Dave has an early checkout, there WILL be people coming after her. It’s just the way the business works.
The annuity removes that vulnerability. The income is locked in. It’s automatic. There’s no decision to make, no salesperson to deal with, no panic when the market drops.
The RMD Question
Here’s something that Dave mentioned that I think catches a lot of people off guard: Required Minimum Distributions.
“If you have a lot of money tied up in say a 401k, that is going to bite you and so you have to be cognizant of that.”
Dave used his 401(k) money to fund the annuity. So how do RMDs work with that?
Turns out, it’s all handled internally. It’s not a problem. It doesn’t give you an advantage necessarily, but it’s not a disadvantage either. It’s just one less thing to worry about.
Same with taxes, IRMA, all that complexity – it’s baked into the annuity structure.
The Holistic Approach: Don’t Look at It in a Vacuum
This is probably the most important lesson from Dave’s entire journey.
“You have to go into it holistically. Like in my case, if you were going to be a 60/40, and then you say, I’m going to take 20% of that and I’m going to put that in the annuity. That means you originally had 40% bonds, 60% stocks, and you say, I’m going to take the 20% and I’m going to put that in annuity. And then the other 20% I’m just going to keep that in bonds because I want to diversify.”
A lot of people do that. But here’s the problem:
You don’t really want to do that. Because now the whole thing you’re trying to do – if legacy is important to you – is you want to be able to grow that portfolio.
That means you’re going to have to take that other 20% and put it in growth so that at the end of the day, net, you’re still going to be better off.
“If I live to 90 and if the market just does the average of what it’s done, then I’m actually going to be quite a bit ahead as far as what I’m going to be able to leave my legacy. But you have to make that conscious effort to consider that. You can’t just look at it in a vacuum and say, I’m going to take this and put it in over here. It’s got to be holistic and everybody’s different. Everybody’s situation is different.”
Some people need to protect more. Some people can protect less.
I’ve had two people this week come in – mid-70s – and they’re 93-97% in equities right now. They looked at it and said, “I’m a little nervous.”
I said, “I think you should be, because you’re going to be swinging real fast as the market moves around.”
The market’s going to go up over time, but there are some people who need a lot less risk than they’re taking. If you stick with the 60/40, then theoretically with the annuity, you can take more risk with the rest.
The Inflation Argument (And Why It’s Misleading)
One of the most common objections Dave heard during his research was about inflation.
“A fixed income annuity doesn’t go up with inflation. So 20 years from now, it’s not going to meet as much of your base level expenses.”
Here’s Dave’s response:
“I think people have to be careful. You’re not comparing apples to oranges. If you put your money in a bond, is that going to grow in value? No, it’s not either. So you’re comparing it to a growth engine. This is not about comparing to a growth engine. This is not a growth investment. That’s not what it’s intended for. And if you have money in bonds, guess what? Those don’t grow either.”
Compare apples to apples. If you need guaranteed income, compare the annuity to bonds, not to your growth portfolio.
And here’s another thing Dave pointed out: Most people are going to have Social Security. Social Security DOES have the ability to grow with inflation.
“In mine I look at my guaranteed income as annuity plus social security and the social security is growing. So that helps be a buffer for that as well.”
The Visual That Changed Everything
Dave is a numbers guy. He needed to see it to believe it.
“Most people are visual and it took for me to see the visual of okay when I’m 90 if I do this is what my heirs get. If I don’t then this is what they get and they’re real numbers, right? I take all the other things into consideration. It’s not about theoretical anymore. It’s about what is the actual numbers that come out over a long period of time.”
In the worst case scenario, Dave was equally as good in either path. Then you add the confidence, the simplicity, all that stuff of the annuity.
But actually, when we ran the numbers assuming he lives to 90 and markets return an average amount, he’s going to be pretty far ahead as far as what he can leave his heirs.
“To me, it was a win. Again, assuming I live to 90.”
And if he lives longer than 90? Then the annuity becomes an even bigger win because he doesn’t have to worry about outliving his money.
The “What If I Waited?” Calculator
When Dave asked me last week about what if he had waited, I did some quick math. But it was an educated guess.
The real answer: To replicate what he got two years ago would cost about 30% more today because of interest rate changes and those two years of aging.
So if you received 30% market growth in your assets, then you’re even. If you didn’t get that, you’re behind.
Here’s what Dave said: “It still worked out the best even though the market’s been up.”
And I don’t think the market’s going to catch it at this point.
Why Dave Chose to Get His Annuity From Me Instead of Fidelity
Remember, this whole journey started because Fidelity told Dave he should consider an annuity for guaranteed income. So the obvious question is: Why didn’t he just buy it through Fidelity?
Here’s the thing – anytime a financial advisor tells you to do something and they have a product that does it, red flags should go up. Dave’s did.
“I had several red flags that came up in my head which is why I felt I had to do a really deep dive into this because, well, it is a commitment right? You are making a very significant commitment and it’s not something that you want to just willy-nilly do.”
But the logic was sound. The need for guaranteed income made sense. So Dave did his homework, talked to me, and then – here’s the important part – he sent my offer back to Fidelity to compare.
Fidelity got on a call with him. The person clearly knew what they were doing. They weren’t trying to pressure him or anything. They looked at what I’d put together and said something that really impressed Dave:
“This is a good deal. We can’t match it.”
The difference was pretty significant for the same level of vendor quality – we’re still talking about an A+ rated insurance company. But I was able to get Dave better rates than Fidelity could offer for the exact same type of product.
“They said the only thing is just make sure that this is for income. It’s not going to help you with growth. And I said that’s not what the intent is. The intent has nothing to do with growth. I’ve got a whole different plan for growth. This is about guaranteed income.”
That’s the kind of honest advice you want from your financial team. Fidelity could have pushed their own product, but they didn’t. They acknowledged that Dave had found a better deal and gave him the green light.
This is why working with a specialist matters. I focus exclusively on annuities. I have relationships with multiple carriers. I can shop the market and find the best rates for each individual situation. Fidelity is excellent at what they do – portfolio management, tax harvesting, financial planning – but annuities aren’t their core business.
Dave ended up with the best of both worlds:
- Fidelity for growth portfolio management and financial planning expertise
- Me for the guaranteed income piece at better rates
- His CPA for tax filing
He built his own team of specialists rather than trying to find one firm that does everything.
The 80% Statistic (That’s Probably Not True)
Dave mentioned something one of the advisors told him that was trying to talk him out of the annuity:
“Did you know that 80% of people that get annuities end up getting out of them?”
Dave’s response: “I don’t think that’s right.”
The advisor said it’s because they need the money. Something happens in their life and they need the money.
Dave’s take: “I guess maybe if someone put all their money in that, I could see that. But if you’re like in my case, I’m putting 20%…”
This is critical. Dave didn’t put all his money in an annuity. He put 20% in for guaranteed income and kept 80% liquid and growing.
“I would hate for someone to walk away from this conversation thinking, oh, I should put all my money in annuity. That’s not what we’re talking about here. What we’re saying is compare apples to apples. We’re comparing, you need guaranteed income, so compare it to your alternatives for guaranteed income, which mostly is bonds. Don’t compare it to a growth fund. That’s not what we’re talking about.”
The Tools Dave Used
For anyone going through a similar process, Dave mentioned a few tools that helped him:
Boldin – A retirement planning tool that takes everything into account: taxes, RMDs, IRMA, all of it. You can run scenarios like “What if the market goes down? What if I die at this age? What if I die at that age?”
“That’s what helped me get comfortable is crunching numbers. Now, not everybody’s going to want to do that per se. And that’s where you help, right?”
Dave ran the numbers three different ways:
- His own spreadsheets and tools
- My calculations
- Fidelity’s tools
All three came back within range of each other. That gave him confidence.
Two Years In: The Verdict
So here we are, two years later. The market’s been up. Dave could look back and second-guess himself.
But he doesn’t.
He’s still very confident and comfortable with the decision because:
- The timing was good – It would cost 30% more to get the same deal today
- The numbers still work – Even with market growth, he’s ahead of where he’d be with bonds
- The mental peace is real – He’s not stressing about income
- His wife is protected – If something happens to him, she’s covered
- His legacy is intact – Actually better than the bond alternative
- It’s one less thing to manage – No bond ladders, no timing decisions, no ongoing fees eating into low returns
After looking at it in hindsight – should he have done it when he did it, with markets having done well – he’s still very confident and comfortable with the decision that he made. And that is what it should feel like.
The Big Takeaway
Dave kept coming back to this throughout our conversation:
Compare apples to apples.
If you need guaranteed income, compare the annuity to bonds, not to your growth portfolio.
And think holistically. If you’re taking 20% and putting it into guaranteed income, what does that let you do with the other 80%? Why does that make you more profitable?
That’s where you find the real advantage.
Dave does a really good job explaining it. And I think a lot of people are going to see themselves in his journey – the skepticism at first, the deep research, the conflicting advice, and ultimately the confidence that comes from running real numbers instead of relying on theoretical arguments.
My Final Thoughts
I want to thank Dave immensely for joining me and sharing his story – how he got into this, how he made this significant decision, and what it’s done to benefit his retirement two years into it.
If you’re in a similar spot – maybe you’re retiring soon, maybe you’ve got a portfolio and you need to figure out the income piece – then go ahead and reach out. We can run your numbers, look at what makes sense for your situation, and make sure you’re comparing the right things.
You can get on my calendar here.
This is a really good episode and I highly recommend you watch the full conversation to hear Dave walk through his entire decision-making process.
Thanks for reading, and I’ll see you next time.
Bryan Anderson
Annuity Straight Talk
Watch Episode 217: Two Years Later – Did He Regret Buying the Annuity?
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Last Updated on March 5, 2026 by Bryan Anderson
