Frequent Annuity Questions — Answered Below so you too can make informed decisions!
“Use an Annuity to Avoid a Trial and Error or Risk Based Retirement”
What is your strategy for retirement? Get the Answers You Need…
If you are like most of the visitors who do research on our Annuity Guy’s website, you want to know if annuities:
- Are secure and safe for you to use?
- Should be in your portfolio?
- Pay you a higher secure income?
- Can safely grow your assets?
- Make sense for your unique situation?
The answers to these and many other Frequently asked Annuity Questions are listed below. Get the answers you need for your own annuity questions. Go to FAQs
“Your retirement success depends on your strategy”
Frequent Annuity Questions How to:
- Know for certain that your money is safe, with high rated insurance companies?
- Eliminate your uncertainty or fear of running out of money in retirement?
- Retain your gains and avoid risking your assets in volatile markets?
- Protect your spouse from running out of money if you are the one that passes first?
- Create your own secure personal pension with annuities, that you alone control?
- Effectively use MarketFree® Hybrid annuities to hedge against inflation?
- Have safety and beat low interest rates that banks offer?
- Benefit from stock market gains with of market loss?
- Avoid unnecessary tax by using annuities without creating a tax trap?
- Calculate the correct percentage of assets you need in annuities to retire securely?
- Know what MarketFree® Hybrid Annuities Are and Learn how they work?
How can you be sure annuities will keep your money safe?
“Staying with high A rated or higher insurance companies is so important. Third party rating agencies give you a heads-up if a particular company is having trouble. The one thing that insurance companies do best is manage risk. Most of the companies that offer annuities have been through up and down business cycles for one hundred years or more; facing a depression, recessions, wars, and pandemics. The number one responsibility that insurance companies have is protection of their policyholders.” Back to FAQs
Can new income riders, immediate annuities, and annuitization keep you from running out of money during your retirement?
“One of the biggest fears in retirement is outliving your money; whether you have modest means or millions saved, the same fear exists according to documented surveys from those retiring. One of the greatest concerns is financial uncertainty especially when it comes to stock market risk affected by events outside of one’s control. Hence, MarketFree® annuities – free from market risk – offer lifetime **guarantees for at least some portion of your money. These **guarantees can come in the form of immediate annuities or annuitization where you give up control of your lump sum or the newer income riders that allow you to maintain majority control of your entire account value.” Back to FAQs
Can you protect your assets with annuities? (pun-intended) ?
“MarketFree® annuities are not just for income. Many retirees use annuities to diversify for safety similar to the way they would use bonds in a stock/bond portfolio. Fixed-index or Hybrid style annuities are designed to give fixed income interest gains that compete with bond returns while eliminating the credit risk associated with bonds. Annuities always have built-in safeguards for **guaranteed lifetime income (protecting against longevity risk) that bonds, US Treasuries, and banking instruments cannot offer. Many retirees use them as the foundation for their portfolio to accomplish steady growth with principal protection.” Back to FAQs
How can you avoid unintended spousal impoverishment with annuities?
“Most couples have multiple income streams that continue to pay while both are living such as social security, pensions, annuities, investments, and etc. Unfortunately, when a spouse passes pre-maturely or should we say unexpectedly, some of these important income streams may be reduced or stop altogether. It becomes more difficult when the spouse who managed the assets passes first and leaves the grieving spouse with a responsibility he or she is not ready for. Annuities that are set up correctly in advance can be turned-on if needed to immediately fill the income shortfall and take the pressure of the grieving spouse in making difficult financial decisions.” Back to FAQs
Can annuities offer pension-style income that you control?
“The good old days of company pensions are just a memory for most. The vast majority of companies have already dumped defined benefit pension plans replacing them with qualified employee savings plans such as 401ks, 457bs, and 403bs. Others are offering lump-sum buyouts to off-load their pension liability. So, where does that leave the folks with no pension who have amassed some assets for retirement? The choices seem to be taking the same market risk individually that employers as a whole have not fared so well at or transfer risk to a pension-style annuity income. Annuities now offer many new retirement options to fit the needs of today’s retirees.” Back to FAQs
Can MarketFree® annuities help with fighting against inflation effectively?
“Since the 2009 Great Recession, inflation has been well under control averaging less than 3 percent. However, during the four decades preceding inflation averaged just over 4 percent annually. Many would argue that the economy has been set up for another round of high inflation based on huge government stimulus programs. Most retirees understand that even modest inflation can dramatically reduce their buying power over twenty to thirty years. So, a balanced portfolio approach of laddering annuities with substantial future income **guarantees or utilizing annuities with increasing income formulas can help retirees sleep better without gambling everything on market risk alone as their only inflation hedge!” Back to FAQs
Can annuities offer higher interest growth than banks?
“When interest rates started their free-fall in 2008, who would have predicted that by 2015 we would be witnessing bank rates way below 1 percent? The government has immense powers in manipulating interest rates. Unfortunately, this directly affects conservative savers who rely on higher bank interest rates to make their money last in retirement. In addition, federal reserve chairwoman Janet Yellen now says to not expect higher interest rates for quite some time; only increasing incrementally, when they do. On the other hand, fortunately, Multi Year Guarantee Annuities [MYGA] annuities have been averaging about 3 percent with five-year maturity and growth oriented hybrid index annuities offer potential growth of 4-6 percent both fully protect your principal/premium.” Back to FAQs
Is it possible to have income and growth without market risk to your growth and principal?
“The rude awakening of 2008 – 2009 is still fresh in most investors minds as the time when all their years of saving and investing dropped in half almost overnight, forcing them to accept that what the market gives, the market can take away. This reality has driven the annuity industry to new highs, especially, the hybrid style fixed-index annuities that can produce moderate growth with no downside stock market risk. They offer the ability to lock-in gains and eliminate market risk for a gain and retain growth strategy. Retirees now realize that diversifying at least some of their money into secure annuities is a prudent way to avoid catastrophic market losses during their retirement years – the years when they will be most vulnerable to running out of money!” Back to FAQs
Is it possible to avoid paying tax using annuities without falling into a future tax trap?
“The last thing anyone needs is an unintended taxable event that could have been avoided with proper retirement planning; that leverages IRS statutes to avoid tax. Annuities are no exception to this type of planning; they are financial vehicles that have many tax-favorable attributes. However, they also have some pitfalls that require proper execution and long-term planning that is specifically tailored to meeting defined retirement objectives. Structured correctly, annuities can be extremely tax efficient and in certain strategies produce tax-free growth and income as well as wealth transfer.” Back to FAQs
How much money should you place in annuities to retire securely?
“Deciding just how much of your portfolio should go into annuities is a question that depends on many factors that are tied to your retirement objectives; and advice from financial professionals can vary widely. Those who consider themselves a super annuity salesman may suggest most if not all of your assets in annuity; those who focus on managing investments or selling securities may advise against any annuities. The truth probably lies somewhere in the middle. As the Annuity Guys®, we believe that you should back into your annuity portfolio percentage by first determining your foundational income need. This will allow you to establish the least amount of money you should initially consider for annuities. You can always increase the percentage, if you need to, later, consider additional factors.” Back to FAQs
How do popular MarketFree® hybrid annuities work?
“MarketFree® hybrid annuities give some market upside with no market risk”
Using OutCome Based Planning™ for Your Retirement
We practice and recommend a "Holistic - OutCome Based Planning™ process when considering annuities." This approach has the effect of balancing your overall portfolio so you can meet your retirement objectives by "first identifying the least amount of your investments or savings (if any) that should be considered for annuities." OutCome Based Planning™ analyzes and models multiple outcomes so you can clearly identify your best income and growth opportunities.
"The Annuity Guys will only call if you request help". Hence, when you are ready for specialized help we will be available."Working with an Experienced Fiduciary Financial Planner can help you Avoid a Trial & Error or Risk Based Retirement"
This type of approach does take considerably more time, effort and analysis which will show you mathematically the successful possibilities by comparing various outcomes rather than trying to sell or convince you of that "so-called one best solution." Clients frequently tell us that this process removes some of the confusion and emotion to help them objectively identify a better retirement plan; rather than just ending up with the most convincing salesperson or advisor.
When requesting help you can be assured of working with an experienced Annuity Guys' Retirement Planner who is independently insurance licensed and securities licensed as a fiduciary financial planner having access to the vast majority of annuity companies in helping you choose the best annuities using a holistic-outcome based planning approach. We consider the high quality advisor recommendations we make to our website visitors as a direct reflection back on our commitment to serve all client's with a high standard of excellence in financial planning for retirement.
Based on survey feedback on advisors from our website visitors, we eliminated about two-hundred local advisors and now only recommend a few that we consider experienced vetted Annuity Guys' Fiduciary Advisors. Many local advisors continue requesting us to recommend them as a vetted advisor. However, our reputation and future business is driven only by satisfied website visitors. So, unfortunately we've had to tell the vast majority of local advisors no, since we changed our business model four years ago. At that time we stopped trying to satisfy everyone with local advisors, we now primarily work with individuals who are comfortable using today's internet technology to their fullest advantage by working with a select group of vetted, experienced and knowledgeable Annuity Guys' Fiduciary Planners.
Selecting the Best Annuity & Retirement Income Advisor
Are you willing to work with one of our retirement and annuity advisors based on their experience and expertise as a first priority rather than being limited by a local or regional area? The good news is that technology has forever eliminated our geographical limitations and leveled the playing field for everyone! As a result of today's technological advances, all of us can now work confidently with experts in any field including personal finance. We are no longer confined by regional or local boundaries limiting our choices and ultimate success. A high quality advisor is now as close as a click or phone call away.
"There is no room for trial and error when it comes to choosing MarketFree® Annuities or a Successful Retirement Planner."
"There are no undo buttons in retirement so it is vitally important that you do it right the first time!"
We are fortunate to have a select few who we believe are truly the highest qualified advisors out of about two hundred licensed insurance agents that we eliminated. Your survey feedback is what helps us make these tough decisions. Our advisors have an independent financial practice, specializing in annuities and retirement planning, which helps ensure that you are given the best options available for your retirement planning.
"It takes an experienced expert to know how to structure annuities for income, inflation, growth, return of principal, and tax advantage."
"Anyone can sell you an annuity; however, it takes a truly qualified and experienced advisor to know how to structure them for income, inflation, growth, return of principal, and tax advantage. Typically, there is not just one that can accomplish all of these objectives. It is how an advisor structures multiple annuities in balancing your total portfolio that makes it possible to achieve your most important retirement objectives."
Why Searching for the Best Annuities on Your Own Can be so Frustrating...Almost everyone nowadays turns to the internet for answers on everything - from buying new widgets to researching just about everything under the sun; and finding the best annuity is no exception!At first, it may seem that researching will be straightforward but the more time you spend researching them, the more frustrating it can be. Why is this? First of all, it does not take long to realize that gimmicks abound - such as warnings and alerts from salesmen who just want your attention so they can sell you one or the "too good to be true" claims of 8% to 14% **guaranteed interest and of course the claim that you can get the full market upside with no downside risk! If you have done any research you have heard all of these claims in advertising which are mostly half truths and not fully explained.So how can you find the best annuities on the internet? The truth is... you can't! And what is even more frustrating is all the conflicting points of view from so called experts. There are well over 6,000 different annuities - all designed for different reasons, so is it any wonder that the deck is stacked against the average researcher or do-it-yourselfer. Add to that the fact that they pay high enough commissions to attract a plethora of both good and bad agents. This does not make annuities good or bad; they are simply a financial tool that truly benefit those who use them correctly.How can you find the best annuities for your unique situation?
- Use the internet cautiously;
- Work with a vetted and experienced specialist;
- Do not settle for that one dubious best plan. Compare multiple Outcome Based Plans to decide on the one that is truly best for you;
- Be keenly aware of scare tactics and hyperbole - avoid those advisors and websites;
- Avoid websites that are focused on rushing free reports, rates and quotes to get your contact information they are rushing you to speak with them, instead, take your time and choose someone you are more comfortable with that works on your time-table;
- Know the Five Vital Factors (listed above) that an experienced specialist must answer before helping you select the best options for your situation;
- Watch this telling video "Avoid Annuity Gimmicks, Amateurs and Charlatans"...
** Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. Annuities are not FDIC insured and it is possible to lose money.
They are insurance products that require a premium to be paid for purchase.
Annuities do not accept or receive deposits and are not to be confused with bank issued financial instruments.
During all video segments, Dick and Eric are referring to Fixed Annuities unless otherwise specified.
*Retirement Planning and annuity purchase assistance may be provided by Eric Judy or by referral to a recommended, experienced, Fiduciary Investment Advisor in helping our website visitors. Dick Van Dyke semi-retired from his Investment Advisory Practice in 2012 and now focuses on this website. He still maintains his insurance license in good standing and assists his current clients.
Our vetted and recommended Fiduciary Financial Planners are required to be properly licensed in assisting clients with their annuity and retirement planning needs. (Due diligence as a client is still always necessary when working with any advisor to check their current standing.)
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- MarketFree™ Annuity Definition: Any fixed annuity or portfolio of fixed annuities that protects principal / premium and growth by remaining market risk free.
- Market Free™ (annuities, retirements and portfolios) refer to the use of fixed insurance products with minimum guarantees that have no market risk to principal and are not investments in securities.
- Market Gains are a calculation used to determine interest earned as a result of an increasing market related index limited by various factors in the contract. These can vary with each annuity and issuing insurance company.
- Premium is the correct term for money placed into annuities principal is used as a universal term that describes the cash value of any asset.
- Interest Earned is the correct term to describe Market Free™ Annuity Growth; Market Gains, Returns, Growth and other generally used terms only refer to actual Interest Earned
- Market Free™ Annuities are fixed insurance products and only require an insurance license in order to sell these products; they are not securities investments and do not require a securities license.
- No Loss only pertains to market downturns and not if losses are incurred due to early withdrawal penalties or other fees for additional insurance benefits.
- Annuities typically have surrender periods where early or excessive withdrawals may result in a surrender cost.
- Market Free™ Annuities may or may not have a bonus. Some bonus products have fees or lower interest crediting and when surrendered early the bonus or part of the bonus may be forfeited as part of the surrender process which is determined by each contract.
- MarketFree™ Annuities are not FDIC Insured and are not guaranteed by any Government Agency.
- Annuities are not Federal Deposit Insurance Corporation (FDIC) insured and their guarantees are based on the claims paying ability of the issuing insurance company.
- State Insurance Guarantee Associations (SIGA) vary in coverage with each state and are not to be confused with FDIC which has the backing of the federal government.
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