I done really well with my 7 year fixed index annuity. Now I have put it into a 5 year fixed index annuity. I am tired of the Yo-yo effects of the stock market the last several years.. Up one day, down the next. back to where you was. Over and over... I like this going up and never down myself... A 3% gain is way better than a huge drop in the markets.. My .02 cents.
@@johngill2853 of course. Some people don't have 20 years to hope the markets are to their advantage. Can you imagine retiring in 2008? That would of been devastating to anyone depending on the markets. Where as an Annuity would not of cared. Sure happy with mine so far anyway.
Fixed annuities are a transfer of risk product that can be a “part” of one’s fixed income portion of the portfolio. Will probably deliver bond or cd type returns. If you look for it to accomplish any other objective..that’s not what it’s intended to do
I'd say to be fair you should show the return from a 10 year index as the returns are substantially higher than a 5 year product. I would also mention that in many states annuity products are protected from creditors of the insured and the beneficiary of such contract.
Cmon man. First, they’re called FIA, fixed indexed annuities. These are conservative FIXED investment products so you wouldn’t use it as a substitute for investing in stocks…they’re used as a substitute for the FIXED portion of your investments. If you substituted an FIA for cash or bonds it would vastly improve your long term returns without adding any more risk. Short term goals or emergency funds shouldn’t be invested at all.
My father left an annuity for us, his three sons. He mentioned it to me some 6 or maybe 7 (or more years ago) he told me the initial amount and I received the annuity payout this year. The annuity he purchased earned $15,222 (tax free) in those years. I’m pretty sure he said it should pay 3% and I’m guessing that was before tax. In the last 5 years my investment accounts have gained 9.51% and in 10 years 9.04%. That does include the last 12 months which have been bad, and I’ve seen nearly a half-million disappear. If I were young I’d definitely avoid an annuity, TIME IS ON THE YOUNG INVESTOR’S SIDE, get in, STAY IN and stick to a plan. Also, diversify. My wife and I were good at saving but waited to invest until we were 50 or so. I’m now putting the cash from the annuity into a CD product which should pay 4% before taxes. (my 2¢).
@@DA-ze6hc .025% They worth the money. I've removed 401k managers that do nothing for you in the past built my account and passed half off to them to relieve stress from me. Worth every penny. These guys work they don't just sit on their hands like normal account managers. BTW Let's go Brandon.
Who gets to use Aladdin? I want to learn that. Also Jazz Finance is very undervalued. There is a lot of GREAT content and educational information in your shows. They are very much appreciated.
Fixed life annuity is a good way to guarantee retirement income when you are old and can't work anymore that makes you have no worries during a down market. However, he doesn't mention most major insurance companies will only allow fifty percent of your nest egg to purchase annuity this allows the other portion to be invested for growth. I can live off of the annuity income and Social Security very comfortable and have no worries and my retirement is four years away.
I work for a non profit organization. We use Valic for the 403b and it's all variable annuities. Fees are through the roof, the funds are crap and leadership doesn't want to look into something else because "this is what everyone does in our industry" 😢
I have a 3 percent fixed in my 403 b .seven year surrender period that’s finished.i max it out .I also max out my 457 all stocks .I also max out my Roth all stocks .any advice.
Any thought on a QLAC, starting at a much older age say 80-85, I’ve also heard it called a longevity or life annuity. Basically a way to have some longevity “insurance” without having to keep a bunch of money in your portfolio. Thus, one can plan to spend down most assets by 85. It really bothers us to not be able to spend most of our portfolio while we can still enjoy it, but obviously need to protect the surviving spouse after the first person dies, since one social security check goes away. We have about $1.7 million in portfolio and no debt (age 63/65)
@@LPetrelli I believe the amount deferred is the value of the total invested in the QLAC at the time of purchase, up to the max purchase allowed. For 2024 the max QLAC eligibility is $200k. It was lower and based on a percentage of the portfolio when we bought ours. Each person in a couple can buy a QLAC assuming they have eligible pre tax accounts. The money in the QLAC must begin payouts by age 85, at which time it is subject to taxation. The $200k is the total of initial premiums, if buying them in more than one year. Of note, one can buy joint payout QLACs, even though the money is coming from an individual account.
Not really quite fair.. people who are buying FIA's are very aware of there liquidity. Sale is never done unless it is suitability approved. Never all their assets. Absolutely nothing wrong with protecting your gain. No one ever says put all your assets in one basket. Downside protection is not a bad thing!!
I am considering putting my conservative part of portfolio such as fixed into An FIA Earning >5% or maybe a SPIA or DIA For stable monthly payments. 62 male in Michigan a $1000 p month wud cost $163K did a quote this week it would break even in 13.5 years - age 75 I hope to live to 85? $285,000 That is $120,000 more than I paid? There are so many different types of Annuities.
There’s no reason people cannot do this themselves. Invest in ETF or mutual funds, and setup annual distributions. Take full advantage of the markets? Or even set up a revocable trust with annual distributions?
Did you remove the dividends from the annuity? The index would compound dividends, annuities not only have the fees (usually much higher than 1% especially if any "benefit" is added), lock in period, but also get no dividends.
There are no fees in an accumulation FIA, only an income product. Nothing wrong with using a "portion" of your portfolio for guarnteed income you can't outlive.
What people don’t realize, is an annuity pays you cash on a quarterly or annual basis which derives from dividends. Tell me a company, any company, that will pay you a 7.25% dividend on an annual basis while maintaining their original investment QUARANTEED.??? I’ll give you a hint. It’s nobody.
Right, so will you be willing to give up the 1% annual charge on all the money in the account, every year. But when the account loss 30% in the market, you still charge 1%. And you told me you are not after people's money. Come on. Be real and be honest.
This is a tool to use and anything will depend on what you want. If you want income for life guaranteed then these are a good investment. The facts are that if you are young and starting these aren't for you. They are more for folks wanting fixed income like a pension that they can't outlive. There is no such thing in the investment world as owning stocks. You could be doing great and suddenly your stock tanks. I knew a bunch of folks that were heavily invested in Nortel. The 100-year-old telecom company went broke. Had you retired in 1999 and invested in Tech you would have lost your sirt in 2000. The same could be said about 2008 and other years. Annuities have a place just like other investments. Just because some folks are shysters doesn't mean they aren't a good tool.
If you're acting in the "best interest" of your clients, then why did you just look at a really, really great 10 years in the market (and blame insurance guys for spinning the numbers however they want to)? You obviously did NOT ever sell annuities, because you would know that there are very strict regulations and everything is based on historical data. This is a sales pitch, it's not a non-biased review of the use of annuities in retirement.
I always saw an annuity as an insurance product and not really an investment. We all know that with risk comes rewards. It's not good for all cases but may be reasonable for some to bridge the gap or to help cover floor expenses. I would stay away from the fancy products and just stick to the basic DIA or SPIA. If you can use guaranteed income to cover your basic expenses, I'm not sure why you wouldn't do that. Once you win the game, you stop playing.
Instead of a fixed annuity in retirement, why not put (some of) your lump sum into QYLD or XYLD? Every month you get dividends equivalent to one percent of your principal, and you get to keep all your money, and the management fees are 0.60%.
@@shailendabhi1020 Not exactly. If there’s a big crash in the NASDAQ and your QYLD goes down to 74,000 the following month on dividend declaration day, you get $740 that month. If it comes back up to $83000 the following month, you’ll get $830 the following month. But this is a very complicated ETF. It’s not for everybody. This is not financial advice. Learn more about it and do what is right for you.
@@imabeliever85 QYLD principal value has also been consistently dropping over time so folks need to research this before considering it a longterm investment = not financial advice, just practical suggestion...
@@johnbeeck2540 Hi John. I don’t know if I would use the word “consistently.” And I’m not sure I would use the word “investment.” This is an income instrument, designed primarily for retirees who want more monthly income that they would probably get from an annuity and they get to keep the principal no matter what. And if they buy most of their shares during a bear market dip like this, they might do better than we think! Another advantage is that you can continue to collect dividend income in a down market without having to sell shares to pay the bills like you might have to do if you relied on VTI in retirement. I personally love VTI for my growth, but I love QYLD for retirement income. VTI is an investment, QYLD is an income instrument. Two totally different purposes.
You cherry picked 10 of the best years in history as far as S&P performance. You happened to leave out 2022 which conveniently wasn't quite over when you released this video. Let's rerun your scenario from 2000-2010. ....see, I can make a narrative out of choosing a convenient time frame too. The point of the guarantee is that the retiree doesn't have to guess whether it's 2000-2010 or 2010-2020. The Indexed Annuity is for the "slow and steady" clients.
I done really well with my 7 year fixed index annuity. Now I have put it into a 5 year fixed index annuity. I am tired of the Yo-yo effects of the stock market the last several years.. Up one day, down the next. back to where you was. Over and over... I like this going up and never down myself... A 3% gain is way better than a huge drop in the markets.. My .02 cents.
Short term thinking. Stocks are for long periods
@@johngill2853 of course. Some people don't have 20 years to hope the markets are to their advantage. Can you imagine retiring in 2008? That would of been devastating to anyone depending on the markets. Where as an Annuity would not of cared. Sure happy with mine so far anyway.
Fixed annuities are a transfer of risk product that can be a “part” of one’s fixed income portion of the portfolio. Will probably deliver bond or cd type returns. If you look for it to accomplish any other objective..that’s not what it’s intended to do
I'd say to be fair you should show the return from a 10 year index as the returns are substantially higher than a 5 year product. I would also mention that in many states annuity products are protected from creditors of the insured and the beneficiary of such contract.
Cmon man. First, they’re called FIA, fixed indexed annuities. These are conservative FIXED investment products so you wouldn’t use it as a substitute for investing in stocks…they’re used as a substitute for the FIXED portion of your investments. If you substituted an FIA for cash or bonds it would vastly improve your long term returns without adding any more risk. Short term goals or emergency funds shouldn’t be invested at all.
My father left an annuity for us, his three sons. He mentioned it to me some 6 or maybe 7 (or more years ago) he told me the initial amount and I received the annuity payout this year. The annuity he purchased earned $15,222 (tax free) in those years. I’m pretty sure he said it should pay 3% and I’m guessing that was before tax. In the last 5 years my investment accounts have gained 9.51% and in 10 years 9.04%. That does include the last 12 months which have been bad, and I’ve seen nearly a half-million disappear. If I were young I’d definitely avoid an annuity, TIME IS ON THE YOUNG INVESTOR’S SIDE, get in, STAY IN and stick to a plan. Also, diversify. My wife and I were good at saving but waited to invest until we were 50 or so. I’m now putting the cash from the annuity into a CD product which should pay 4% before taxes. (my 2¢).
Erroric, Another good one. I thought about that for about 10 minutes on Monday. You just solidified my thoughts on it.
Go ahead pay him 1% of your money no matter whether your account is increase 20% or loss 30%. He does not discount you.
@@DA-ze6hc .025% They worth the money. I've removed 401k managers that do nothing for you in the past built my account and passed half off to them to relieve stress from me. Worth every penny. These guys work they don't just sit on their hands like normal account managers. BTW Let's go Brandon.
Who gets to use Aladdin? I want to learn that. Also Jazz Finance is very undervalued. There is a lot of GREAT content and educational information in your shows. They are very much appreciated.
Thanks Eric good advice
I own 3 MYGA’s- no risk over 4 percent interest- I/m/o a good bond replacement
Fixed life annuity is a good way to guarantee retirement income when you are old and can't work anymore that makes you have no worries during a down market. However, he doesn't mention most major insurance companies will only allow fifty percent of your nest egg to purchase annuity this allows the other portion to be invested for growth. I can live off of the annuity income and Social Security very comfortable and have no worries and my retirement is four years away.
Well said.
I was told that insurance companies want you to start drawing monthly payments from your annuity, is this true?
I work for a non profit organization. We use Valic for the 403b and it's all variable annuities. Fees are through the roof, the funds are crap and leadership doesn't want to look into something else because "this is what everyone does in our industry" 😢
Variable annuities are always a bad idea!
I have a 3 percent fixed in my 403 b .seven year surrender period that’s finished.i max it out .I also max out my 457 all stocks .I also max out my Roth all stocks .any advice.
I have been just shown a Inventor Buffered outcome ETF that sounds like a annuity this is a one year. I am not sure what to think about this fund
Any thought on a QLAC, starting at a much older age say 80-85, I’ve also heard it called a longevity or life annuity. Basically a way to have some longevity “insurance” without having to keep a bunch of money in your portfolio. Thus, one can plan to spend down most assets by 85. It really bothers us to not be able to spend most of our portfolio while we can still enjoy it, but obviously need to protect the surviving spouse after the first person dies, since one social security check goes away. We have about $1.7 million in portfolio and no debt (age 63/65)
QLAC's defer RMD's on a set amount which I believe is 240k at this time.
@@LPetrelli I believe the amount deferred is the value of the total invested in the QLAC at the time of purchase, up to the max purchase allowed. For 2024 the max QLAC eligibility is $200k. It was lower and based on a percentage of the portfolio when we bought ours. Each person in a couple can buy a QLAC assuming they have eligible pre tax accounts. The money in the QLAC must begin payouts by age 85, at which time it is subject to taxation. The $200k is the total of initial premiums, if buying them in more than one year.
Of note, one can buy joint payout QLACs, even though the money is coming from an individual account.
@@randolphh8005 all correct!
Not really quite fair.. people who are buying FIA's are very aware of there liquidity. Sale is never done unless it is suitability approved. Never all their assets. Absolutely nothing wrong with protecting your gain. No one ever says put all your assets in one basket. Downside protection is not a bad thing!!
I am considering putting my conservative part of portfolio such as fixed into An FIA Earning >5% or maybe a SPIA or DIA For stable monthly payments. 62 male in Michigan a $1000 p month wud cost $163K did a quote this week it would break even in 13.5 years - age 75 I hope to live to 85? $285,000 That is $120,000 more than I paid? There are so many different types of Annuities.
There’s no reason people cannot do this themselves.
Invest in ETF or mutual funds, and setup annual distributions. Take full advantage of the markets?
Or even set up a revocable trust with annual distributions?
Did you remove the dividends from the annuity? The index would compound dividends, annuities not only have the fees (usually much higher than 1% especially if any "benefit" is added), lock in period, but also get no dividends.
There are no fees in an accumulation FIA, only an income product. Nothing wrong with using a "portion" of your portfolio for guarnteed income you can't outlive.
5 year fixed annuities are preferable as you know the rate for entire duration. No mess. No fuss. ❤😂
Tax deferred and interest is compounded too!
What people don’t realize, is an annuity pays you cash on a quarterly or annual basis which derives from dividends. Tell me a company, any company, that will pay you a 7.25% dividend on an annual basis while maintaining their original investment QUARANTEED.??? I’ll give you a hint. It’s nobody.
Right, so will you be willing to give up the 1% annual charge on all the money in the account, every year. But when the account loss 30% in the market, you still charge 1%. And you told me you are not after people's money. Come on. Be real and be honest.
What happens when the annuity company goes out of business ?
State Guaranty association. Check out your states limits and stay under them
This is a tool to use and anything will depend on what you want. If you want income for life guaranteed then these are a good investment. The facts are that if you are young and starting these aren't for you. They are more for folks wanting fixed income like a pension that they can't outlive. There is no such thing in the investment world as owning stocks. You could be doing great and suddenly your stock tanks. I knew a bunch of folks that were heavily invested in Nortel. The 100-year-old telecom company went broke. Had you retired in 1999 and invested in Tech you would have lost your sirt in 2000. The same could be said about 2008 and other years. Annuities have a place just like other investments. Just because some folks are shysters doesn't mean they aren't a good tool.
If you're acting in the "best interest" of your clients, then why did you just look at a really, really great 10 years in the market (and blame insurance guys for spinning the numbers however they want to)? You obviously did NOT ever sell annuities, because you would know that there are very strict regulations and everything is based on historical data. This is a sales pitch, it's not a non-biased review of the use of annuities in retirement.
I always saw an annuity as an insurance product and not really an investment. We all know that with risk comes rewards. It's not good for all cases but may be reasonable for some to bridge the gap or to help cover floor expenses. I would stay away from the fancy products and just stick to the basic DIA or SPIA. If you can use guaranteed income to cover your basic expenses, I'm not sure why you wouldn't do that. Once you win the game, you stop playing.
Instead of a fixed annuity in retirement, why not put (some of) your lump sum into QYLD or XYLD? Every month you get dividends equivalent to one percent of your principal, and you get to keep all your money, and the management fees are 0.60%.
So for $100,000, one gets $1000 cash every month? For how many years?
@@shailendabhi1020 Not exactly. If there’s a big crash in the NASDAQ and your QYLD goes down to 74,000 the following month on dividend declaration day, you get $740 that month. If it comes back up to $83000 the following month, you’ll get $830 the following month.
But this is a very complicated ETF. It’s not for everybody. This is not financial advice. Learn more about it and do what is right for you.
@@imabeliever85 QYLD principal value has also been consistently dropping over time so folks need to research this before considering it a longterm investment = not financial advice, just practical suggestion...
@@johnbeeck2540 Hi John. I don’t know if I would use the word “consistently.” And I’m not sure I would use the word “investment.” This is an income instrument, designed primarily for retirees who want more monthly income that they would probably get from an annuity and they get to keep the principal no matter what.
And if they buy most of their shares during a bear market dip like this, they might do better than we think!
Another advantage is that you can continue to collect dividend income in a down market without having to sell shares to pay the bills like you might have to do if you relied on VTI in retirement.
I personally love VTI for my growth, but I love QYLD for retirement income. VTI is an investment, QYLD is an income instrument. Two totally different purposes.
@@imabeliever85 XYLD might be an additional consideration for income with what appears to be lesser capital risk.
You cherry picked 10 of the best years in history as far as S&P performance. You happened to leave out 2022 which conveniently wasn't quite over when you released this video. Let's rerun your scenario from 2000-2010. ....see, I can make a narrative out of choosing a convenient time frame too. The point of the guarantee is that the retiree doesn't have to guess whether it's 2000-2010 or 2010-2020. The Indexed Annuity is for the "slow and steady" clients.
Dumping it ALL into VTI!! All $500. Lets get rich!
Never! Fixed annuity equals fixed low return. Stay away!!!
Fixed annuities the worst vehicle out there similar to whole life insurance
Annuities are silly for 95 percent of the population.