In today’s blog post and video, we break down how annuities can be abused by agents not held to a fiduciary standard. If you’ve ever wondered if you should be buying annuities on a regular basis then this video is for you.
If there is one thing that we see all the time it’s annuities being used incorrectly.
Maybe it’s just a product of the suitability standard, but this post today is to help guard you, your friends, and your families from situations that are usually not in their best interest.
What are we talking about?
Let’s break this down.
First off, we want to remind you that we don’t love annuities or hate them. It’s about when they get used and how.
Like we discussed in our last video on annuities, in today’s low interest rate environment, the internal rates of returns on these products can be pretty dismal even with all the riders and contract bonuses the insurance company is offering. So, you have to be careful about what you buy and how it’s used for your retirement.
And second, we want to show you some of the strategies being used that are often times not in your best interest and hope this isn’t happening in your portfolio.
It all comes down to “layers” of annuities using the free withdrawal provision
Let’s break an example down that sheds light on that subject and why we’re so passionate about this.
- Are you buying new annuities every year with your free withdrawal provision? This can destroy liquidity and create longer surrender periods than may have originally been planned.
- Is your advisor or agent a Fiduciary and doing this because it’s in your best interest? Or because it’s in theirs?
- WFiduciary advisors are required to do what’s in your best interest regardless of pay or commission. In the suitability standard brokers and agents are held to the best interest of their company. Which one would you rather have advising you?
- Audit your contracts and portfolios for these conflicts of interest before you make any more big decisions.
- Annuities perform the best in high interest rate environments which might not be happening any time soon.
Low interest rates are making retirement planning very difficult in today’s environment. Not only can fees eat you alive you need you need to avoid making emotional decisions. It’s up to you to go beyond “trusting” someone to help you. You also need to get proof and education on what strategies can work, how they can fail or backfire and what options you really have.
Annuities can be great and they can be terrible depending on your situation. But there are other options:
That’s why we created our free ebook.
It covers ways to drive income without relying on interest rates, annuities, or other high-cost and high-risk strategies all too common in today’s environment.
Like always, if you’re facing retirement and need a second opinion learn about what makes us different, we’ll audit your entire strategy to make sure you have the right tools to make your retirement as low risk as possible and still drive in a good income.