“I HATE ANNUITIES AND YOU SHOULD TOO!” We’ve all seen the ads, and the author has done a terrific job of instilling fear and uncertainty into the minds of retirees and pre-retirees, but has he really done them any favors?
Making the blanket statement that you hate annuities is akin to saying that you hate your social security paycheck, your company pension, or your latest lottery payout. When was the last time anyone cursed the government for putting their social security check in your mailbox? I’m pretty sure that when Bubba cashed in his lottery ticket, he was celebrating his winnings all the way to the bank. On the flip side of the coin, operating under the delusion that an annuity is somehow the Holy Grail to financial planning is equally misguided and misinformed.
Like any polarizing issue, the root of the problem really boils down to a combination of misinformation and misconceptions, perpetrated ad nauseam by so called industry “experts”. The real question isn’t who is right in this argument, but rather, how can you take ownership of your own situation to make a properly informed decision that is right for you, and ultimately what is right for your clients? This question will serve as the footing for the remainder of this post….to deliver a simple framework to help you make a simple honest assessment of why these products ultimately exist, and how they can potentially serve you and your clients in an uncertain world.