[Music] um I've got another one heed up from ma. It says, Are annuities a safe retirement option? H um, so we're, you know, in our day job, we're financial advisers, and generally speaking, when we get a question like this, we have a really great answer and response. Uh, the answer is, It depends. It depends on your unique financial situation and what you are trying to accomplish. It's not uncommon for someone to get to retirement and they get to financial independence. They think, You know what, man, I really, I don't have a pension. You know, I, I, I, the company I work for doesn't have any sort of guaranteed benefit. Um, I'm going to have social security, but I might not start drawing that for, you know, five, 10, 15 years in the future. And I know that I have some, like, fixed expenses that I really am going to just count on having, whe, you know, groceries, utilities, that sort of thing. It would really help me sleep at night. It would make me feel

better. It would give me peace of mind if I knew that I had some guaranteed income structure, some assured income coming into me every single year or every single month. In that situation, for that type of person, an annuity might make sense. So, I don't want to completely dispel that annuities have no place in retirement plans, and that's not something you should ever consider. However, I do think that annuities are incredibly profitable for annuity salesmen in a lot of circumstances. And so, what happens is they begin recommending these products and recommending these solutions, not only in those small segments where it does make sense, but in wider segments where maybe it does not make sense. Because I think that more people purchase annuity products than actually need the annuity product sold. Annuity product, that's right, they're sold that more than they actually need the annuity product. So, I think they have a place in certain retirement plans, but I don't think that I would blanket say, Oh yeah, yeah, you

should absolutely have annuities if you're moving into retirement. By the way, M, you killed our name game, song game, so we'll blame Reby on that, not you. But it is one of those things where I wrote down two big things. First, what are your desires and wishes? I think a lot of people are surprised when they find out for a lot of annuities out there, especially the ones that give you a guaranteed benefit, that once executed, if you die prematurely, unless it's written into the contract, 'cause some of them will have a 10-year or they'll have a kickback. There depends on the writers or the way it's structured, but in the raw form, the insurance company keeps your assets because it's a promise to pay you this return while you're alive based upon your life. And maybe you can put a Survivor benefit dependent on your choices as well, but a lot of people, so if your desire is to pass this money down to loved ones.

Sometimes that blows up, putting all of the money in the annuities because your desires and wishes are disconnected from what the way these products are structured. The second thing you have to ask yourself is what's your risk, what's your risk appetite. Because look, without a doubt, if you are a person, we I have come across these people, it's not the majority of people, but every now and then we'll have somebody come in and we'll talk to them when we find out that they literally think that the stock market, they think that this whole thing that drives the entire economy, businesses and so forth, and the ownership of stocks is completely a scam or they're scared to death of any losses whatsoever. Now full disclosure, what do you think the insurance company's doing with your money? They're putting it into this same, the same thing as well. But for the people who are very nervous of that, I'm not going to take that away from because I have seen those cases and we, you have to admit, but there are people

that we've said the best thing they can do is just put that money in an annuity, protect them because protect them from themselves. They either didn't have discipline or they're just scared or don't know how things work. So, um, look at your risk profile. If that is you, if I just described you, and you don't want to take any risk of volatility because every year realize with any type of financial investment, there is potential risk. It's that whole concept of risk-reward. You're getting paid a premium for taking on additional risk, so that's part of the whole deal when you invest the money. Um, I actually, if you ask me and cornered me and say, Hey Bri, tell me the annuities you kind of like or you think are appropriate, so that's a good point. There are a number of different types of annu. There's immediate annuities, there's these variable annuities, there's these equity-indexed annuities, there's all types. I like more

of the immediate annuities that you see. It's kind of structuring like a pinion, and we even saw some right when interest rates really got to the higher point. They were even offering some bonuses that they really made these things for certain people seem very appealing. But that's not what you typically see that's being sold out there. What you see sold are these variable annuities or equity-indexed annuities. And what equity-indexed annuities, they sound so good on the brochure, is they say, Hey, we're going to give you all the benefits of the stock market, but it's like a ratchet. You can't go down because you don't get the downside. The only way they can give you that is if you go read the fine print, and you'll quickly find out that they typically, your participation rate is much lower, meaning because most of your money made investing is like in those outsize performance years, the years that the S&P 500 makes greater

than 20%, and you crush it. You're going to love that. Well, if your participation rate with the annuity you did, but, and they didn't disclose this to you, is only, you're capped out at 7% or 8%. You know, they kept all the extra performance, and they only gave you the 7% or 8%. That hurts you. I mean, it's one of those things. The other thing is, you got to look at the fees because variable annuities, equity index annuities, they're rife with lots of fees and commissions, so just be careful. So, we're not against annuities, but I think that it's just, it's one of those more complex things that you need to ask a lot of questions. Probably, if this is your first rodeo, you don't want to do this alone. You probably want to talk to somebody who doesn't sell insurance to kind of give you guidance behind the scenes. This is why I think it's, it is one of those things where you can take

the relationship to the next level. Ask those questions of your fiduciary fee-only financial adviser who doesn't have skin on the commissions of the products being sold to see if they can help you navigate some of this. If some of what I described hits you. Yeah, M's her. The actual question was, are they a safe retirement option? Some annuities can be incredibly safe, like those fixed immediate annuities. Like you said, it's guaranteed. And some can be incredibly aggressive, depending on the underlying investment. So I like what you just said there. Get a second opinion. Make sure you have someone who's giving you solid counsel, and it might not be the person trying to sell you the actual product. I think that's great.

Are Annuities A Safe Retirement Option?

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Are Annuities A Safe Retirement Option?

Are Annuities A Safe Retirement Option?

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