Index-Linked Deferred Annuities
Hi, Terry. I asked a question yesterday about annuities and then watched your archived podcast about annuities with Stan the Annuity Man. Near the end of the podcast, Stan and you stated that no one should have more than 50% of her/his investible assets in annuities. A person, even in his/her 60’s or 70’s, should have investments in the market to create some type of investment diversity. My wife and I are considering investing about 20% more into annuities which would bring our % of investible assets that we have to about 60%. My wife is adverse to much risk-taking, but are you suggesting that a little risk in the market is OK? I should mention that I am a retired Illinois teacher with a pension that creates a pretty good income stream for my retirement and we are not looking at investments to create more of an income stream, but to build wealth over the long run and, hopefully, to pass on some of that wealth to our children. My wife, however, does not receive a pension and if I die before she does, she will receive only 1/2 of our pension until she dies. In that case an income stream may be more important. Are we putting too many of our investment eggs into annuity baskets?
Terry Says
Yes. And unless the annuity is carefully designed, it will not leave assets for your heirs. Why don’t you just pick up the phone and call Stan the Annuity Man at (800) 509-6473. In that podcast we discussed that there are hidden limitations in how you get your money OUT of these equity-indexed annuities, and that many people will be surprised down the road. Stan will be glad to explain. And he is not trying to make money off you.
Also, you really need a session with a FEE-ONLY, FIDUCIARY financial planner – someone who isn’t trying to sell you something. I suggest you go to www.Wealthramp.com and get matched with a planner I know you can trust.
I’ll just bet that you don’t have a revocable living trust, that you don’t have healthcare powers of attorney, that you don’t have a living will. And that you don’t understand the importance of asset allocation — and the importance of “chicken money”– especially these days!
