Do Agents Use Annuities In Their Own retirement Plannings?

I get this question a lot from prospective clients, do you use annuities in your personal retirement planning?

 

 

The simple answer is yes, absolutely. I have multiple annuities as part of my retirement portfolio. And, the reason I use annuities for my retirement, is the same reason that anyone would use them:

Safety, Guarantees, Growth Potential, and INCOME.

I started working in the financial industry in the fall of 1990. At that time, we were getting ready for one of the most prolific stock markets in history. You could pick any mutual fund, and it would increase in value. Not by a little, but by huge percentages each year. And that’s precisely what I did with my portfolio and with my clients. It was a great time to be an advisor and, an investor. As with all good things, they don’t last. Toward the end of the ’90s, I discovered that the market could take quite an ugly turn. Now, what am I going to do?

At that time, your choices in the annuity industry were limited to variable annuities or fixed annuities. Neither one of those were very satisfying. Then I was introduced to a Fixed Indexed Annuity. I sounded much like many investors today when they first hear of this product. That’s too good to be true. An annuity that will let you participate in an upward stock market with 100% downside market protection? But it was true! Now there was a financial strategy that will credit a portion of an increasing stock market, protect me in a down market, and will provide me with a monthly income that I can’t outlive. Sign me up!

Over the years, as my client demographic has moved more into pre-retirement and retirement age people, I’ve learned to appreciate the Fixed Indexed Annuity even more. What is arguably the most important aspect of enjoying your retirement? INCOME of course. Income is king in retirement, and we want to make sure there is income for the rest of a client’s life. Do stocks, bonds, mutual funds, or ETFs provide a guaranteed lifetime income? No, they don’t. But, FIA’s do. Having an income rider as part of your annuity account is one of the most important things you can do for a client. This will make sure that a bad economy, a negative market, decreasing interest rates, or living into your 90’s or even 100’s, doesn’t destroy your retirement plan.

In the past, you could work for a company and retire with a guaranteed pension check for the rest of your life. Now with 401’s, clients have a lump sum of money dumped in their lap, and the responsibility of making that money last is on their shoulders. You don’t get a second chance on this one either. Now, you either go to the bank and settle for low-interest accounts, you invest in the stock market and hope things go well, or you use a financial strategy that is somewhere in the middle.

The Fixed Indexed Annuity provides safety, guarantees, growth potential, and INCOME. After using these products for 20 years, both personally and with my clients, I’ve found they are not only true and real, they are also perfect for retirement planning.