Over the years, every piece of research I’ve read shows how important it is to guarantee your income. This is more important today because of market volatility, low interest rates, and longevity.
Annuities are the absolute best product for this. Yet, because of the lack of training of most people who are licensed to sell annuities and the complexity of products—that really don’t need to be complex—and the fact that they become dead money to the advisers who sell them, many people who could use them for guaranteed lifetime income are hesitant to get them.
Yet, all the research shows that it’s a small portion of their portfolios; 10%, 20%, 30% can guarantee enough lifetime income to leave the remainder of their money in investments like stock, mutual funds, and real estate.
A blanket statement like, “Annuities are no good,” is ridiculous for retirees and those planning on retiring, yet I see that all the time with money managers who are more concerned with giving up their own annuity—which is for use every year—than they are their clients’ well being.
So you know what’s the best annuity for you, it’s pretty easy. Use somebody like me, the official annuity expert of the MoneyShow. I use the modern miracle of the computer to search for the highest rated company that gives you the most income and we have a match.
So, let me give you a true story here to show you how effective that it is.
In 2007 I met a client with most of his money in the market, he even mortgaged one of his homes to put in the market. I convinced him to use 15% of his money for income annuity. He told me he would never turn on that income unless “hell froze over.” Of course, in 2008 he called me to turn on the income and what that allowed him to do was to hold onto all of his stock positions. By ensuring his income, he was able to wait out the downturn because he was retired and he needed to live off his investments.
Plenty of people I’ve met in the last six months have not listened to me, and if they had, they would’ve been in the same shape over the last three to four weeks, which is, they would’ve had plenty of income and still been able to hold onto their positions and wait for the turnaround. This is simply mathematically correct.
The failure to ensure your income can lead to long-term catastrophic events.
I’m not here to convert you to the idea of ensuring your income—that’s just common sense—I’m here to help you do so. If you think bad things can never happen, I’m probably not your guy, but remember, the purpose of history is to learn and not repeat mistakes.
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