You can’t have your cake and eat it too… or can you?
When it comes to choosing annuities, most folks want steady growth and increasing lifetime income. The problem is that no one annuity is designed for optimum growth and income.
However, in a well constructed retirement portfolio, you can structure annuities to create an advanced income plan – which may enable you to have your cake and eat it too! Astute and experienced financial advisors are comfortable creating plans that utilize securities when desired and differing allocations of specific annuities giving clients an increasing lifetime income with the potential to maintain or rebuild their principal.
**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. During this segment, Dick and Eric are referring to Fixed Annuities unless otherwise specified.
Inspired to learn more about this concept – see an excerpt from the white paper that inspired this weeks blog.
What Does It Mean To “Ladder” Fixed Annuities?
Some people have great experiences with fixed annuities; some people have poor experiences. In most cases those individuals who have had a bad experience with fixed annuities, had one for the same reasons that they might have had a bad experience with any other type of investment – when that investment was sold or structured incorrectly in relation to their investment needs or objectives. The bottom line is that fixed annuities are no different than most other things in life. They come with both good parts and bad parts. For example, most people really like the idea of tax deferred growth, safety of principal, **guaranteed growth, and . However, they are not as excited about poor liquidity, irreversible decisions, and little or no real inflation protection. Therefore, we conclude that while annuities can certainly provide definite benefits to some clients, they can also create problems for others. The fact is that while fixed annuities have both good parts and bad parts, they certainly have their limitations as a stand-alone product.
However, suppose for a moment that instead of just simply purchasing a single fixed annuity by itself, what if these same fixed annuities could be structured within a more advanced strategy? What if by doing so we could substantially magnify the benefits that fixed annuities can offer, while at the same time reduce or even eliminate the negative features? Think about it this way for a moment: In the game of chess, individual chess pieces in and of themselves are nothing really special. However, place those chess pieces into the hands of a world champion chess player who is a master of using those pieces within an advanced strategy, and you will see incredible results. The same is true when it comes to using fixed annuities within a laddered annuity strategy.
So how exactly does a laddered fixed annuity strategy work? The concept is actually surprisingly simple! First, instead of taking your asset and just purchasing one big annuity, we divide your nest egg into smaller, more easily manageable fixed annuities called “legs” that are each designed with a specific purpose. We then deposit the correct mathematical amount into each leg and structure these legs in the proper sequence. Some legs are designed to pay you income, and some legs are designed to keep replenishing your nest egg’s original balance. The effect is that you will have an indefinite stream of retirement income that keeps pace with inflation, and you never deplete your original principal. The last “leg” in line is always designed to re-grow your original principal by the time you get to it, and since we are only using **guaranteed interest rates, there is no question that your money will be there when you need it. This entire process becomes a self-funding mechanism that is specifically designed so that you will not run out of money. Furthermore, because we only use short term deferred fixed annuities, you never have to lock into an irreversible decision, your nest egg is never tied up at low “payout rates”, and every couple of years you have the option of either walking away with your entire principal penalty free, or continuing with the program and watching your monthly income keep getting bigger. Now, instead of just purchasing a single investment product, you have an actual strategy for providing yourself with a steadily rising retirement income stream while at the same time never depleting or forfeiting your principal. This is how fixed annuities can be used so that the good features are magnified and the bad features are reduced or even eliminated entirely!
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.
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