Are Annuities a Better Investment Since Interest Rates Have Normalized?
Schedule a free assessment with an experienced financial professional: https://bit.ly/YMYWassessYT
Office locations: https://bit.ly/PureLocations
Ask Joe & Big Al On Air: https://bit.ly/AskJoeAndBigAl
Subscribe: http://bit.ly/YMYW-YT
Follow the YMYW podcast: https://lnk.to/ymyw
Question: "Hi Joe, Al, & Andi. My wife (54) & I (56) enjoy milk & home-made cookies at night while watching the 10 o'clock News on KUSI, since we're now "empty-nesters" (both kids in college). I commute 12 miles to work each day with my compact economical 2012 Lexus Hybrid (still gets 50mph !), while my wife commutes 1 mile to her office on her beach-cruiser bicycle. I really enjoy your podcast, and want to give a BIG THANK YOU to you 3 for providing such entertaining, valuable financial education ! My Question : Has Joe modified his position on annuities lately? I recall a few years ago (when rates were low) Joe would go on some really fun, entertaining rants about what a big rip-off annuities were vs. other financial opportunities for your "safe money". Seemed like Big Al used to get in a couple of words like, "IF you live a long life, then an annuity might be an OK deal", but by-and-large, annuities were panned for years on your show. LATELY, it seems Joe might have quietly softened his anti-annuity position a bit, but it's hard to tell - other than the lack of another fun anti-annuity rant by Joe... With rates "normalizing" the past couple of years, I've put @ 50% of my savings into CD's (5% rates) and Annuities (6% rates), leaving the other 50% of my savings in the stock market (40% S&P500 Index Fund + 10% International Fund). If rates go down, my CD's will be that much more valuable, and I could always choose to sell them for a nice profit on the secondary market (e.g. I got 20% profit after holding 3% CD's for 2 years this way back in 2020.) Regarding the Annuities I've purchased, if I choose to defer for 9 years (when I will be at my planned retirement age of 65) the GLWB will have a Lifetime Payment Percentage of 13%, so the Internal Rate of Return will be 4.4% when I'm 81, 5.7% when I'm 88, and 6.4% when I'm 96 (yes, longevity runs in my family...). These days, it seems to me like these zero-risk, decent-rate CD's & Annuities are a better place for my "safe money" than the high-risk bonds you used to recommend several years ago (Bond funds have performed poorly and returned a TOTAL of only +6% over the past 7 years, with 3 of those years being down anywhere from -2% to -16%.). Curious - What do Joe and Big Al think about CD's & Annuities these days ? Thanks - Love Your Show, Stewart"
IMPORTANT DISCLOSURES:
• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC, a Registered Investment Advisor.
• Pure Financial Advisors LLC does not offer tax or legal advice. Consult with your tax advisor or attorney regarding specific situations.
• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. As rules and regulations change, content may become outdated.
• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
CFP® - The CERTIFIED FINANCIAL PLANNER® certification is by the CFP Board of Standards, Inc. To attain the right to use the CFP® mark, an individual must satisfactorily fulfill education, experience and ethics requirements as well as pass a comprehensive exam. 30 hours of continuing education is required every 2 years to maintain the certification.
CPA – Certified Public Accountant is a license set by the American Institute of Certified Public Accountants and administered by the National Association of State Boards of Accountancy. Eligibility to sit for the Uniform CPA Exam is determined by individual State Boards of Accountancy. Typically, the requirement is a U.S. bachelor’s degree which includes a minimum number of qualifying credit hours in accounting and business administration with an additional one-year study. All CPA candidates must pass the Uniform CPA Examination to qualify for a CPA certificate and license (i.e., permit to practice) to practice public accounting. CPAs are required to take continuing education courses to renew their license, and most states require CPAs to complete an ethics course during every renewal period.
#annuities #investing #insurance