Make it last…
Annuities
Annuities function much like pensions, providing a fixed monthly income for life. While this predictable income can be appealing, we’ve identified three important reasons why we generally do not recommend making most annuities a core part of our clients’ financial portfolios.
Three Key Reasons
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Many annuities—specifically variable annuities—expose your principal to market risk. While they can offer strong returns when markets rise, they can also lead to significant losses during downturns. We choose not to recommend any product that compromises your financial safety. In today’s economic environment, your retirement plan should focus on protection and security, not unnecessary risk.
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Although annuities offer the benefit of guaranteed lifetime income, many have traditionally produced relatively low returns. Over time, these modest returns can diminish your wealth—especially as inflation erodes the future purchasing power of your money.
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Many annuities come with high fees and expenses. Although retirees often accept these costs in exchange for guaranteed lifetime income, we’ve never been fully convinced that this trade-off truly serves our clients’ best interests.
A Better Solution
A unique type of indexed annuity has recently debuted, available exclusively to select financial professionals across the country. This is the annuity we can get behind, as it addresses all three of our major concerns.
Safety – Because this annuity uses indexing (vs. a variable strategy), your money is protected from loss due to market volatility.
Rate of Return – With indexing, your money can grow with upturns in the market, while being protected from the downturns. This can lead to more predictable rates of return.
Fees and Value – Both annuities and investment accounts have fees, but they cover different things. Investment accounts usually charge an annual fee (around 1%) for ongoing management and advice, but they don’t include any guarantees. Annuities, on the other hand, may have built-in costs that cover valuable benefits—like protection from market loss, lifetime income, and death benefits. While annuity fees can vary depending on the features you choose, they’re designed to give you added stability and peace of mind, especially when markets are unpredictable.
We’re dedicated to helping you build lasting financial confidence. Through proven, tax-advantaged strategies, we guide our clients in growing and protecting their wealth with steady, long-term results. Historically, these strategies have provided consistent returns averaging between 5% and 10% annually—allowing every $1 million accumulated to generate $70,000–$100,000 per year in tax-free income, all while preserving the principal.