Downsides to Annuities

Whether you retire in a Bear market or a Bull market, having the right strategies in place will help you get the most out of your retirement income. Joe and Al discuss the different types of annuities you can choose from and why these are not necessarily your best option. When debating annuities pros and cons, you must consider caps, participation rates and lack of dividends.

2:30 “The economic cycle could have a profound impact on your retirement; here’s how to protect yourself”

3:59 “When the market goes down, that’s when stock prices are cheaper. What was Warren Buffet doing in 2008? He was buying, buying, buying. That’s what we should be doing too”

5:17 “Just last month we’ve had significant volatility in the overall markets this year than we’ve had in previous years”

6:44 “When I’m selling shares when markets go down, then that’s called reverse dollar cost averaging and it’s very difficult to recover from that”

11:15 “There are some things you can do to protect yourself no matter what happens with our economy. On today’s show we are going to reveal how the economic cycle can have a profound impact on your entire life savings”

16:35 “Besides the sequence of return, the other big thing that people avoid or miss is taxes. When you look at where your assets are located, most of you have your assets in retirement accounts. When you take the money out of your retirement accounts, you pay ordinary income tax”

19:02 “Don’t take risk in bonds—that should be there as your safety valve. So when stocks go down, you still have a place to pull money from to create your retirement income long term”

22:19 “When interest rates go down, bond prices go up…so most people buying bonds today are buying them at a premium”

26:53 “The term ‘annuity’ means income; I can get an annuity payment through my corporation if I have a pension plan”

32:00 “You have to look at the fine print on the contracts; there’s something called caps…you can’t earn more than, say, 4%. Say the market does 6% but you can’t earn any more than 4%”

33:33 “You’re stumped to caps, you have participation rates and you don’t get the dividends. So when it sounds too good to be true, in most cases it is. I want people to be careful out there”