This week, I sat down with Stan Haithcock, aka “Stan The Annuity Man,” to deep dive on annuities. We chat about how annuities work, why annuities are not investments (in the portfolio sense), and why there is no such thing as “best annuities.”
Are annuities a good investment for retirement?
With $250 billion in sales each year, and $2.5 trillion in retirement annuity assets under contract, annuities comprise a huge slice of US retirement assets.
Understanding annuities – whether annuities are right for you, and how annuities fit into your retirement strategy – can get complicated given all the annuity options out there and the extreme uncertainty in today’s markets.
– What annuities are and what purpose they serve
– The different types of annuity options (immediate annuity, deferred annuity, fixed annuity, variable annuity, indexed annuity, multi-year guaranteed annuity, life annuity)
– How annuities account for inflation
– The mechanics of how to buy an annuity
– How insurance companies that sell annuities make money
– The different type of annuity fees you can expect, and typical all-in costs for different annuity types
– How to vet the insurance companies that sell annuities
– How to vet an agent and questions to ask before buying an annuity from them
– How agents who sell annuities are compensated
– Annuity taxes and the tax profile of annuities
– Basic protections your annuity gets if the insurance company you bought it from goes bankrupt
– Who annuities are best suited for, and whether annuities are a good idea for early retirees (FIRE)
Check it out here:
Have you purchased any annuities before, either for yourself or a family member? What kind of annuity did you buy, and why? Let me know by leaving a comment.
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