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Retirement Planning: $385 Billion in Annuities in a Bull Market–Is It Time to Consider Annuities?

Retirement Planning: $385 Billion in Annuities in a Bull Market–Is It Time to Consider Annuities?

Last year in 2023, another record was set in the purchase of annuities, reaching an astonishing $385 billion of new dollars. Now, how’s it possible with record returns in the equities market in the last 30 years, all achieved in 2023?

Hello, Dave Douly here, talking all things money and building wealth for over 40 years. As a registered investment firm, our goal is to provide you, the consumer, with viable options to make informed decisions concerning your wealth and income as you head into retirement. I could continue to argue that a major reason you see such an influx of dollars moved into fixed or indexed annuities has to do with the massive amount of tax-deferred accounts that make up the majority of the average family’s portfolio. Secondly, the transformation of the products themselves over the last 5 to 7 years is absolutely remarkable for guaranteeing income for both spouses, and with the rising rates, they have become more and more attractive in assuring returns.

I’ve always argued with using qualified dollars for these type investment tools. When you realize your IRA-type accounts will be used strictly as income-producing vehicles over your remaining lifetime, then you understand entering into a long-term contract of 7 to 10 years with your principal always guaranteed for market losses. It gives most people comfort knowing they cannot outlive their retirement savings. In addition, the new annuities will double your income if you or your spouse were in need of any type of assisted living in the future years. So why the pushback from the average investor on these type investments? Yet, on the other hand, $385 billion in new dollars were poured into annuities last year alone. I believe like crypto or blockchain technology or AI, the misinformation gets us so confused it renders most investors frozen in place and shut off to review what options are available when using certain dollars for certain outcomes.

When considering making up for lost income at retirement, a major shortfall between Social Security or pensions and what is needed to maintain your current standard living, then annuities should be a major part of consideration for your IRA or qualified dollars. Putting undue pressure on trying to secure certain returns each year on your portfolio can be a major mistake and too much of a burden to bear when trying to make up for lost income. Taking a laded approach to create guaranteed income has proven to be a better and more successful approach. The early years of retirement are what will set the stage for success or failure. Take the time to watch my video on sequence of returns risk and its impact on the outcomes in retirement. It will prove to be a major topic for how this can impact a successful retirement. Open your mind to options that are available to you when using qualified dollars, securing a less stressful outcome.

If you’ve got a question diving deep into the inner workings of how annuities work, what mistakes to stay clear of, then reach out to us and we’ll walk you through the dos and don’ts of examining annuities. As always, subscribe below and you’ll get a new video each week on planning for the road ahead on all things money and income. Visit our website, click on the videos to watch countless videos that will help you become a more informed investor. Till next time

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Investment Advisory services through Georgia Advisory Group LLC. A registered investment advisory firm. Custodian services provided by First Clearing. First Clearing is a trade name used by Wells Fargo Clearing Services, LLC and Non- Bank Affiliate of Wells Fargo and Company. Investing involves risks, including possible loss of principal. Please consider the investment objectives, risks, charges and expenses. brokercheck.finra.org / www.sipc.org