If she went to them freaking out about the volatility of her account and said "what can you do so my account value doesn't swing around so much" then they did EXACTLY what she asked. They're not financial planners, they're account managers, she asked them for a product with different characteristics and they executed the request.
Robert Smithers yes however that’s like saying you come to me thirsty and I give you salt water- no excuse for them not explaining but also her fault for not verifying
@@genejohnson2738 If you run a supermarket and I ask for salt and water and you sell me salt and water then you have done your job. If you are a dietitian and I ask you if salt and water is the best fluid for me to rehydrate with then you have more responsibility. A fund manager is like the supermarket owner, they sell products requested by customers, they don't have a fiduciary responsibility and in many places have committed an offence if they provide financial advice about the suitability of those products. A financial adviser is more like the dietitian, they have a responsibility to provide competent advice in the customer's interests.
They should have beta weighted the portfolio, so it had daily p/l swings of no more than 0.2%, not put it in annuities which make nothing in real terms.
The "account managers" took advantage of the situation, plain and simple. They're weasels just like the ones who sell Whole Life insurance. They didn't have her best interest in mind. Annuities are terrible investments. The fees/commissions they (you) charge are ridiculous. It's a mutual fund inside of an annuity. I can buy mutual funds without paying the fees/commissions that these pos insurance companies charge.
My mother has a fixed annuity that is paid up. She was allowed to withdraw some money at any time. The annuity was one of the best things she did because it was a passive income that kept her afloat for a few bad years.
@@rernardallison807 not really. To this day she gets hundreds in free passive income from her annuity alone monthly. Collectively I have her earning north of $1k a month passively and never have to worry about her money being lost. Thanks for your wisdom though.
@@rernardallison807 Thanks for your wisdom. She's doing well, growing her savings well into retirement and never worried about emergency expenses. The annuity was the best thing she ever did. Coupled with high yield rates in banks she's making more than some people going to work.
This is a very specific and fragmented view of annuities. For the caller in this video, she was worried about the value of her assets moving up and down, and her advisors suggested a partial investment into a product that provides stable income and then she wouldn't have to worry about all the volatility. The advisors could have chosen other products but to calm someone who cant sleep at night...they offered her a solution. For someone her age(im assuming she's 30-50 years old) it's probably best to invest in mutual funds for the long term, but that isn't what she asked the advisors to do. It's easy for Ramsey to sit there and critique
I agree with you. There is multiple Annuities in the market and people should select based on their need. I'm working client on annuity that will return them minimum 6% and max 14%.
Bingo. I can’t believe he said a fixed annuity is NEVER a solution. I’d rather get a fixed annuity than a volatile variable annuity if I was in or near retirement. The advice wasn’t bad and potentially would be ideal if she was retiring. Why would he suggest mutual funds with their ridiculously high fees? If you can’t navigate securities maybe some ETF.
@@jerryspivey1949 - There are penalties however. No thanks. I can manage my own money and not penalize myself if I need to get to that money. Furthermore, I can easily outperform fixed annuities.
An annuity is the bottom of the barrel when nothing else is available. An IRA, 401k, whole life, HSA or even a brokerage high yield savings acct are vastly better options.
I work for an annuity company. Annuities are best purchased when you talk to an actual firm and an actual licensed fiduciary advisor, and you have a looooot of money to invest. Some of the richest people in the world have annuities.... not middle class. Fixed annuities are never the answer. Index and Variables are the way to go if anything. Fixed annuities are only necessary if you have a 401k or something you wanna roll over to get guaranteed income for the rest of your life.
@@disco4535 you can start an annuity with as little as 2,000. Some companies 5,000. Depends on if it is a rollover or if it is cash, and the carrier you use.
Like when our new engineer came into our lab and told a bunch of car guys that she got a new car ... they were so interested, she knew it was red ... got it from used car lot ... remembered name OMNI ... lab went silent and got empty.
Happened to me too. My FA of a major retirement investing firm pushed it saying I could use a conservative bucket and stay aggressive in my current 403b. Now I am a year in of seven. I might just ride it out. I did not realize it was a seven year commitment at the time. Could have made so much more in the market. Never again
I'm so glad I didn't fall for an annuity when my bank tried to sell it to me years ago, my gut instinct told me it can't be a good thing if my money was frozen for ten years.
is every subsequent payment into the annuity frozen or you just have to wait 10 years from when you start the annuity to be able to dip into it without penalty ?
Everything about this call is messed up. Her job is offering her retirement plans all of which will have a penalty if she moves money too early. They advised her to move some money to an annuity because she can avoid the market volatility. Dave lies by using the word “probably”. Fixed Index Annuinties averaged 9% in 2023. And while mutual funds lost 17% to 25% in 2022 fixed index annuities lost 0%.
My investment advisor is pushing annuities also. I asked her "when do I get my principle back?" and the answer was just too squishy for me. She's pretty much fired at this point.
The principal goes down as you withdraw your yearly. It goes against it. So you end up using the money as income. But if you outlive the annuity then is to your advantage. Then you start earning additional that you didn't put in. It was explained to me in a way that this is how I understood it.
There are also Index Annuities. Some offer 1% garuante and Uncapped Growth meaning you gain with the market. There might be a spread of about 1 to 2%. There is no management fees that eat your investment as mutual funds. There are no fees on Annuties unless you put an Income Rider or you pull your money before the surrender charge.
@@alinatamashevich3354 - Literally ever my financial advisor takes 1-2% of people’s ACTUAL hard earned money, every single year, in perpetuity, regardless of performance. Tell me why you’re totally cool with that, but not someone being paid (and NOT your money, the company pays the commission, not you) and ONLY ONCE on for?
i wish more calls were like this, when i listen to him live, its always some stupid people wanting to take a loan out on a car or some other stupid questions that they already know they answer to. I made that same mistake and costed me over 8 grand due my stupidity. I wish i knew about Dave before i signed up for universal life insurance, my surrender charge was about 8 K . only getting back around 4
Bannoura, I'm not sure why you made a decision to get into a universal life insurance product, but what was your goal? For example, fixed index universal life can be one of the best retirement vehicles on the planet. I would compare it favorably to a 401k or other plan almost every day of the week.
@@Steven-yx1ic Do you mind my asking why you feel you were stupid? I know that IUL's are long term solutions for retirement as opposed to short term "investments." I am curious what your initial intentions were. Thanks for your help, I am always trying to understand motivations.
Yeah why would those people ask stupid questions about wanting a loan from their 401k interest free that’s reliable to drive them selves to work and their kids to school. How evil and time wasting of them. 🤨 can’t stand people like that.
Since annuities are up for a visit, let us remember all the "pros" about a traditional deferred annuities. Dave, you are wrong about a retirement strategy that includes an annuity for diversity. A fixed annuity does not have a down side, in that one is 55 and pays New York Life $100,000 and receives a guaranteed monthly income for life starting at age 68. The money is safe with this company and one has "pre-paid" for a pension. One can possibly make more with that money but there is risk. If one already has an IRA, a pension, a spouse with a Roth IRA, and they will both be receiving Social Security then what is wrong with take part of their money and diversifying the retirement portfolio to include the fixed deferred annuity. Your influence is great Dave and I am a fan of yours. In this case, you may be doing a disservice to some when this product has a place in some retirement plans. A couple has, using my example, taken $100,000 and they know what the monthly will be at 68. Too many do not allocate properly in the market as the mature and no longer have the time to make up for a 25%-30% market down turn. Annuities of this nature have their place for some people. Thank you sir.
Lol she's nor Eben close to retirement...if she went mutual funds she could easily stomach a 25% drop by retirement and still outperform her annuity...
For comparison, if money had been invested from Jan 2019 to Dec 2019 in a portfolio of 50% Bond Fund (VBMFX) and 50% S&P 500 (VFINX), then your return would have been 19.97% over that period of time. She missed out on high returns in Mutual Funds, and the tax deferral was NOT needed because it was already in a tax deferred 403B. I would complain to the insurance department in her state, and have lawyer send them a letter to undo everything, to not pay the surrender charge (penalty). Also in my opinion, most Variable Annuities have very high fees, and are not necessary for the majority of people either.
I believe there are certain annuity products that can be good but it is mostly based on your age. A person in retirement or near retirement who is looking for a GUARANTEED income stream may want to put a portion of their nestegg into an annuity. There are products with zero fees that have a low return and low risk and there are products with high fees that have more guarantees. A 70 year-old is hurt a lot worse by a market downturn than is a 40 year-old so removing risk is attractive. Taking risks as you approach retirement is for people with a LOT of money, not for people with $250k. Taking risks at 30 is how you get wealthy. Dave's advice for getting out of debt is the best available but his investment strategies are not always the best. I was following his steps before I ever heard of him.
This. My parents retirement advisor took some of my parents into two annuities after they retired and they switched over their 401k and pension. But yeah I would never do this before I retired. I think my parents get like 3k from them every month.
@@ddddddno24 My parents invested close to a million dollars from My dads work retirement accounts. He had a pension he took in a lump sum and a 401k. After he retired they both got invested.
@@ddddddno24 With that 3k a month the principle doesn’t get touched. They can also take out up to 30k a year if they want to buy something big. They did that recently for a car down payment.
@@TheFishdoctor1952 I'll tell you. The woman had $500k in retirement. The only way Dave's dislike for annuities work is because annuity money is as accessible as other cash. He tries to make things simple. He had to exaggerate a reaction. The right response to this woman was, you did a great thing. You invested in something that will keep giving.
@@trevormaxwell3703 He’s just become a multimillionaire for making many mistakes! Don’t speak when you don’t know what you’re talking about! You judge somebody by the record that he holds and he is very successful doing what he’s doing! So he’s doing something right correct?
@@robertlulek1634 he’s become a multimillionaire because he has an incredible branding and marketing team, if you want to be able to live like him, stop taking his advice and learn how to CREATE wealth.
dave you need to read up on annuities. Please stay with what you know. An Indexed annuity is a suitable product with no market risk and good possible returns
News Now Uber when he said they only make 2% interest I knew he didn’t know what he was talking about. He has no clue. Indexed annuities have no fees and they can make 10% interest gains, or sometimes better.
Financial guys hate annuities because it takes away from their business. I will agree that in this instance a fixed annuity might not of been the best call, an indexed annuity would give better returns and addressed her worries about volatility in the market
They shouldn’t just put her in an annuity, the right thing to do would have been to beta weight the portfolio so the sharpe is then higher, not to put it in an asset that makes nothing!🙄
My spouse and I are adding a variety of stocks/ETF to my present holdings for the long term, We've set aside $250k to start following inflation-indexed bonds and stocks of companies with solid cash flows, I believe it is a good time to capitalize on the market for long-term gains, but it wouldn't hurt to know means of actualizing short term profit
The current market might give opportunities to maximize profit within a short term, but in order to execute such strategy , you must be a skilled practitioner.
@@devereauxjnr A lot of folks downplay the role of advisors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for license advisors and came across someone of due diligence, helped a lot to grow my reserve notwithstanding inflation, from $275k to approx. $850k so far.
@@MrGravity304 Over the following 3 months, I want to increase my reserve from $280,000 to at least $550,000. I would be grateful for any advice you can give on how to accurately predict the market and how to diversify and balance my portfolio in order to accomplish my goal.
@@MrGravity304 Thank you for this tip. it was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé
The 4% rule is still the go to for most retirement advise. Which means if you needed $2k a month you had to earmark $600,000. You can find annuities that guarantee around 6%. So for $2k a month you need closer $400k in an annuity.
No annuities guarantee 6%. Income riders have roll ups between 5-7% that go to an income base which calculates a guaranteed lifetime withdrawal benefit amount. Be careful how you say certain words please. Makes us agents/advisors look bad
@@danieldiehl1649 At the time that this was written there were annuities guaranteeing 6% withdrawals from their income base. Meaning if the account went to $0 it would still pay. The 4% rule has no such protections and REQUIRES a larger initial deposit to get you your desired income. Today the point is moot because rates have dropped to the floor.
Mutual funds aren’t the only options To make money, the fact that they took advantage of her was really wrong, because they didn’t plan the whole annuity right. Remember everything has to be structured correctly, and the Annuity that was done for that person was done horribly wrong, but it doesn’t mean an annuity is bad. There are companies and agents who work on fixing this that can actually help. And when he mentions that there isn’t an annuity that can’t help anyone, he is also wrong as well. Just as much the stock market isn’t for everyone, nor real-estate, and just as much Life Insurance. Do your own research talk with life insurance companies talk with investors, read books and not get one side of the story. Learn and grow!
Where does Dave get his 10-12% average return rate from? Most growth mutual funds that I know of, don't bring those high returns (on average) over a 10-20 year period.
I've been teaching financial professionals for the past 11 years on annuities. What happened to this caller is unfortunate and irresponsible of the company. With that said, Dave's explanation of annuities is skewed, generic, and high-level. There are no 40% surrender charges. I know Dave's being facetious. There are roughly 12 different types of annuities, not 2, and Fixed Annuities are paying over 3%, not 1% - 2%. When this video was uploaded, fixed rates were close to 4%. You don't pay extra fees for all annuities. Typically you pay fees for an additional benefit like an income rider. There are annuities without surrender charges (Return of Premium) and short term contracts. I like Dave. I respect Dave. I don't think Dave is very educated in annuities, and I don't expect him to be an expert in every financial product. A jack of all trades is a master of none.
@Phoenix The problem is that what you pay gor the annuity can be invested conservatively in fixed income products for better cashflows. As a financial professional, I'll just leave you with the tidbit that annuities carry the highest sales commission of any personal financial product... that tells you all you need to know.
Saying “never” is irresponsible because he has not sat with any clients and has no clue of the situation, clients risk tolerance, goals, debt etc. getting financial advise from a guy on TV is dangerous.
Fixed annuities are HORRIBLE investments. After fees/commissions are paid, the ROR is around 1 - 2%. You're being vague about the pitfall of annuities. They're just savings accounts with an insurance company. The variable annuity gets invested in mutual funds while charging the client extra fees,
I don't mind the idea of an annuity once you are right up against retirement age and ready to play a more defensive game with your savings but as Dave said there are better ways to play that game. Personally, I would start moving things into bonds over annuities.
It's sad how Dave continues to speak on products he does not really understand but plays the part for his listener's. Stay in your lane Dave, and stick with the baby steps program as that and your marketing team is what got you to where you are.
Derrick I totally agree!!!! Fixed Indexed annuities are great products and I am pretty sure Dave doesn't know everything there is to know about them. Unfortunately there are a lot of people that take everything he says as gospel and don't do any further research which can steer people away from something that might be in their best interest.
Annuities are great options if they are suitable for the investor. Surrender charges only occur if you take the money out early. If she doesn’t need this money before she retires, the surrender charges don’t come into play. Annuities are great for people who want to contribute above the IRA contribution amounts, and are not worried about liquidity. If this woman was worried about volatility, she should have been put in funds with more bonds in them.
Always be careful with this sales people. Especially for anything that concerns "Accounts or investment". Never make a decision on the spot. Ask for minimum 1 day to make a decision. USE THAT TIME FOR DEEP RESEARCH Before making any commitments..
That been said. Don't get me wrong there are Genuine sales people out there. Not all are greedy. Personally I have met plenty of sales people who have landed me great deals so its all about asking for the time off for research if its a topic, or field that's new to you.
dave is a salesman too. he cross sold his elp before taking what may or may not have still been a solution for this lady to the woodshed without all the facts.
It sounds like she might be in TIAA-Traditional ie she says "403b", "10 year payout", and "traditional". If so it can be a good base for retirement and part of a sensible asset allocation. TIAA-Traditional also pays more than CD rates and there'll be no surrender charge for the 10 year payout. Ramsey can be a real hot head sometimes and doesn't seem shy about giving advice on what might be incorrect assumptions.
I don't know...depends on your age..and how much you got to put in the annuity..if you're near retirement age drop a huge chunk in there..that annuity will pay you for life!
I have never been a fan of annuitys. Especially when you run the present value of the future stream of annuity payments.. it is usually not a favorable investment.. there is always something better!
That's because it's not an investment. It's INSURANCE. You are betting that you will OUTLIVE your investments if drawn down on perpetually, and/or that the market will take a downturn some time before you die. The idea isn't to get rich. If you are buying an annuity you should already be rich. But trying to turn an annuity into an investment with a deferred annuity? Yeah, that's a poor investment because like Whole Life you are tying INSURANCE in with an INVESTMENT. BAD. IDEA.
This sounds like a TIAA CREF 403b. This would be the traditional TIAA part of the annuity. Her option would be to start a TPA (Transfer payout annuity) She can dollar cost average back into the CREF side of the annuity.
I was given the choice to take a lump sum at my husband’s death pay a penalty of 30% bringing me to like 40k or an Annuity for the rest of my life up to 100k but I do pay taxes on my monthly amount I only took it because over time it was more money for me.
Tanya, you didn't make a big mistake. You have $500k of retirement. You don't need to touch the money. I have something similar that a Ramsey sponsored advisor got me. Five years ago I put $82k in an annuity. It's now valued at $189k, that's a return of 19%. Dave is famous startling people. At the core he's good, but there are moments he's just blind. This is one of them.
As someone who has been in finance going on 24 years; 15 of which have been FIA's, or "annuities," Dave doesn't ask the right questions, although this one sounds way too young for this to be suitable. As far as Qualified or "retirement" money? That depends on the goals and objectives of each individual. Dave: did you know that there were a few FIA's that beat the S&P a few years ago over a 10 year period? So the investor was not only guaranteed not to lose a dime, but beat the S&P? That's not what these products are made for; as Gene Rogers once said "I'd rather have a return of my money than a return from my money." Also, other than safety in lieu of grand growth, these also are great lifetime income additions to add to SS needs that aren't met. I've watched far too many seniors go through 20% of their assets per year thinking it'll always be there. Love ya Dave, and think you are great at debt relief. As to investments? May want to stay in your wheelhouse. Cheers.
Well said! Fact finding is everything with annuities. Asking the right questions to deem if it’s a suitable sale. There are a lot of different types of annuity products that are designed to accomplish different goals. Annuities aren’t bad, the product just has to make sense for that specific client.
Jim, you seriously think a man worth more than 250M has clueless investment advisors? Sounds like you collect a huge payout selling this garbage. Adios Jim, move along nothing to see here
I've been w Fidelity since the '80s and have no complaints, but I don't use any of their advisor services. If you're looking to invest in mutual funds, you are not limited to Fidelity products as they have offerings from many other houses and often without transfer fees. Fidelity funds are no-load, and they now even have some w/o expense ratios, including FNILX, which invests in large-cap companies.
403(b) are tax shelters annuities and an annuity provides a life time stream of income. Life insurance protects you from dying to soon whereas an annuity protects you from living too long. Once again Ramsey just shoots advice and slanders without giving/knowing what he is talking about...
@@joycewright5386 Yeah but a annuity after you retire can be good. Taking part of your nest egg and putting it into one so you have a guaranteed income after retirement. You don’t want to lose everything in retirement and this gives you a guaranteed income.
@@slipstreamf1racing944 DUDE what kind of stupidity is this? You need to be dirt poor to qualify for Medicaid in any state (at least as far as the state knows). Any Medicaid application will ask about assets, including annuities.
I have a friend that has a million in an annuity that makes about 10%. I am not sure how his is structured or even who it is through, but I have heard a lot of people that have gotten taken advantage of and just screwed over.
I own my house ...no mortgage...my intent is to leave inheritance for my child's children.. recommendations welcome. I was contemplating annuity for myself. for later on if I ever decide to retire. ..
@@cherylbalogh6098 The federal inheritance tax stars at $11.7 million. Most states don't have an inheritance tax. The ones that do (Kentucky, Massachusetts, Maryland...etc.) start between $2 million to $5 million. Even if you do fall in that category, seek advice of an estate attorney before going out band buying a trash value policy.
@@cherylbalogh6098 Estate tax vs. inheritance tax. The only difference between inheritance and estate taxes is the person who pays the tax to avoid probate. Unlike an inheritance tax, estate taxes are charged against the estate regardless of who inherits the deceased's assets. Again, same rules apply.
Question: If you are 69 yrs old and you don't have the time to recoup from massive losses from stocks and mutual fund swings, shouldn't you have your life's savings in a non-risk investment like a fixed annuity. What are the alternatives?
Imo, there is a lot of misinformation or lack of information in this short clip. I don't agree this was a wise investment decision, however, there are typically no fees on fixed annuities and fixed annuities are completely different than an income annuity. I'm going to make a video explaining the difference. Hopefully it will help clarify some of this confusion
@@ericksonsails Hi Diane. Ah thank you so much for the reminder! I just started YT so am still trying to get my flow of consistent uploads. I will do that for my next video for sure! My channel is a makeup channel for those over 30 where we discuss a finance topic of the day so I will include that topic for my next video this week 😉 Thanks again for reminding me!
Lemme get this straight. Lady says she doesnt want risk. Tbey give her a product with no risk and Dave says terrible mistake. Put it BACK into an asset class that she didnt want in the first place. And i see this quite often. People always say they dont want risk but dont really understand what risk entails.
Dave with the new retirement account changes are going to see a lot more annuities and other trash financial products in 401ks. Can you look into this?
sounds like TIAA traditional guarenteed. people dont realize once they put money into this its stuck there for sometimes up to 10 years. and there is no way out, even if you are willing to pay a fee.
After listening to this. This remind me of a story if me trying to help people not to sign up for annuities but people dont listen to me because at the time i was only 20 but i had learn all of Dave's techniques and had a great teacher. Now all those people have regrets i just sit there and laugh after years later I guess at the end of the day it was their money and of course i told myself I tried. No regrets.
The market has not averaged yearly returns of 10-12% for years. It’s more like 4% since 2000. Annuity rates are over 5.5% now that interest rates are up. The fees in an annuity is the same as what Smart Investor pro will charge you. Your financial advisor should not only be securities licensed but they should be a licensed insurance agent as well. There is absolutely a place in personal finance for annuities. Such as right now!
@@ChrisP-yes. My large account with a variety of mutual and index funds has averaged 10+% for the last 10 years. I have a technology mutual fund with Fidelity that has averaged 17% for 10 years. Holding quality mutual funds for many years and not playing with them works very well.
Dave’s wrong, it’s a income stream. It’s not the end of the world. It’s peace of mind. A income stream. What do you think Social security is? Just make sure you get Income annuity 20 year joint life with period certain. That way it even passes to your children. Pensions are even annuities! Is financial peace.
@@alinatamashevich3354 Clearly you spend quite a lot of time watching Dave’s videos. Either he or your surrounding has quite the influence on your character to call someone you don’t know a fool. Before being a snowflake, pls check yourself and pray for the person you might disagree with.
Dave said “take it out and put the money in something that makes 10%. Seriously? 10%?? He also said Mutual Funds. I hope this poor lady didn’t take his advice.
The problem with annuities are the low rates I purchased a fixed annuity from my employer at age 58 that will pay 7.6% per year (with no fees). That gives me a break-even point of 13.2 years, which I am comfortable with. An annuity at 2% will take you 50 years just to recoup your initial investment. How many people live for 50 years in retirement ?
@@ronniecarter3123 A fixed life annuity does not earn "interest" in a conventional way. You turn over your principal in exchange for a guaranteed monthly payment for the rest of your life. You are talking about a different kind of annuity where it's essentially like a CD with an end term.
why do you think these guy's offered to give your company's employees free financial health checks? they were trying to sell a product. Any time someone is offering you something for free always think "what is in it for them?"
With how volatile the market it right now an annuity might be the perfect spot for some of your money. Is an annuity going to double your money? No, but that’s not the goal. The goal is to keep your money in a spot where the market down turns doesn’t affect you and you still get some growth. You still have access to your money, you can pull up to 10% of the account out every year without penalty
But then you miss out on the highs when it goes back up. A annuity is good though after you retire. Taking a portion of your nest egg after you retire so you have a guaranteed income.
im 21 and i was recommended to get an annuity to prepare for my future i dont need any access to the funds inside the annuity and i have substantial investments outside, would it be a good idea to use them for secured investments?
Question..what if a person has a fixed annuities for life by transamerica. Does the Annuitor own the policy? Or does transamerica corporation own the annuity policy? O thought annuit is same as owner
i am getting a malpractice settlement but i cant get the full settlement in a lump sum because o will lose my disability and medicaid/ medicare insurance my attorney wants me to put part of it in an annuity and in a special needs trust should i go with the annuity?
Year to date VINIX is up 26.31%. This is Vanguard's S&P 500 index fund. The average return over the past 52 weeks is 19.76%. This lady has missed out on $31,616 over the past 52 weeks in growth as of today. She instead got $3,200 or 2% on her $160,000 for her annuity. Ugh. Feel bad for her.
A lot of them are right now. S&P index funds are doing over 20%, RIGHT NOW. But you never know when the market will crash like in 2008. Nothing wrong with hedging your bets and investing in multiple things.
So Dave's advice was good in Nov'2019, not so good now. Mutual funds, have lost huge amounts of money since the pandemic. A fix annuity, even if only 2% interest, will not loss your hard earn retirement money. Now Dave's right about an annuity inside of qualified retirement account, doesn't make since. Fix annuities outside of retirement will grow tax-free until you withdraw the money.
Isn't an annuity a loan to a company and they will pay you interest until you get the l7mb sumb back in 10 years. What If the company goes bankrupt? At least I can sell my shares at a loss before that happens. But an annuity I won't be able to get back.
What mutual funds are you in? My mutuals have done better than my equities because I was heavy in oil companies when the pandemic began. YTD I am well up in mutual funds and just below break even in equities.
We were offered by American Equity investment to cancel one of my life insurances and get an Annuity instead. I am 69 and my husband is 76. Is it worth it for us to do that? Help
I find it INSANE that he automatically said, "it was a huge mistake" without having ANY knowledge of how the annuity was set up, what the interest rate is, or what her full financial picture looks like, or even knowing her age. Then he calls licensed financial professionals "screwballs" and "idiots" and then directs people to his network. Then he says her annuity is "substandard with a horrible rate of return" when she doesn't even know what rate she is getting, and neither does he. Ramsey has no insurance or brokers license and has no business advising people.
I like some of the stuff Ramsey says and I have his book. Good stuff...but I find some logic ...like this to be very outdated. Not all annuities are the same. Simple google search shows the interest is well above 1-2%. (5-6% Currently) Also protects against market crashes unlike a 401k and has a lifetime payout for retirement.
and there are products that give the balance to a beneficiary. It always comes down to the why. What is the client looking to do. There is no silver bullet fits all scenario.
Please advise. I am a 73 year old bachelor who recently inherited 300K. I live in a care facility and am in good health. I have no other assets other then social security. What is the best annuity for me assuming I want the maximum monthly payout with no legacy inheritance. Thanks
Dude, a 401k isn’t any better! Atleast annuities give you income for life! Btw, there’s more then two strategies. Dave said there’s only fix and variable! There’s fix index accounts DAVE!! Just like w/ technology gets better w/ time so do financial products! Like I’ve been saying Dave is old school and isn’t aware about the new money.
You are absolutely right David Herrera. I agree , There are fix index annuities that give you income for life. Lots of strategies that he is not even aware of in the annuity world. He recommends mutual funds because the company he represents specializes in annuities and he uses a company called Zander Insurance so I think he is bias. As much advise as he gives I have never taken any one of his suggestions. Fixed Index Annuities are a win win for the client. Income for life living benefits and a 0 floor so you can sleep at night knowing you will never lose money. Mutual Funds are a bad investment bound to lose all your money in a down market!
Never Dave? What about when you are 60 years old and want guaranteed income? I was planning to use some of my retirement savings to purchase an annuity when I'm near retirement age to deal with volatility (a guaranteed income sounds good when I don't have long to live anyway). I'm not planning to do this for almost 30 years tho...
Annuities promise a guaranteed income for the life of the purchaser. What they don't tell you is that if they go broke, your monthly checks stop and the money you paid in up front is gone like the wind.
Why does Dave assume she's only making 2%? It does depend on how much stock risk the annuity allows her to take on, but if the annuity was 100% invested in stocks, she would've still gotten over 20% in 2019 after the fees of the annuity. If she's in a fixed annuity, than yes, probably 2%, but Dave shouldn't speak on something he doesn't have all the info on and she obviously doesn't understand what she's doing...it doesn't mean it's a bad program. Sometimes I wonder if Dave fully understands the various annuities out there...fixed, index, variable, structured. Get educated Dave if you're going to speak to individuals as if they are part of the masses. What might be right for one, may not be right for the other.
The only way she would be able to get to 20% is she was in a variable annuity and at that point you might as well be in mutual funds. Even if its an indexed they max out at 8% or so, so you might as well have the downside risk with mutual funds to reinvest dividends at lower prices when your investment horizon is longer than 10 years. Dave doesn't know that much about annuities but they should really only be used for retirement not in a 403b.
There are other types of annuities that would work inside of a retirement account. Such as a buffered annuity, which have exploded in popularity as an investment. More are low to no fee and offer a contractual level of protection against market loss. This lady was preyed on tho.
