Does It Ever Make Sense to Purchase an Annuity?
10/31/23 • 26 min
2 Listeners
Have you ever wondered if purchasing an annuity makes sense for you?
There are two conflicting opinions from financial advisors: some advocate for annuities while others advise against them. James explores the concept of being a fiduciary and the challenges of understanding the financial advisory industry. He covers when annuities may be a suitable option, such as providing guarantees, protecting against longevity, guaranteeing core expenses, and the benefits of Qualified Longevity Annuity Contracts (QLACs) in reducing required minimum distributions.
There is no one-size-fits-all approach to financial planning. Your individual circumstances and goals will determine whether annuities are the right choice. It's always a good idea to seek professional advice and review all your options when making decisions about annuities.
Questions answered:
Is an annuity a suitable financial product for retirement planning?
What factors should you consider when deciding whether to purchase an annuity?
Timestamps:
0:00 Intro
2:51 What is a fiduciary?
8:43 Explaining annuities
10:53 The wrong way to look at it
13:23 Another way to look at it
17:53 When is there a case for an annuity?
19:49 Another case
22:06 Qualified Longevity Annuity Contract
24:40 Outro
Create Your Custom Strategy ⬇️
Have you ever wondered if purchasing an annuity makes sense for you?
There are two conflicting opinions from financial advisors: some advocate for annuities while others advise against them. James explores the concept of being a fiduciary and the challenges of understanding the financial advisory industry. He covers when annuities may be a suitable option, such as providing guarantees, protecting against longevity, guaranteeing core expenses, and the benefits of Qualified Longevity Annuity Contracts (QLACs) in reducing required minimum distributions.
There is no one-size-fits-all approach to financial planning. Your individual circumstances and goals will determine whether annuities are the right choice. It's always a good idea to seek professional advice and review all your options when making decisions about annuities.
Questions answered:
Is an annuity a suitable financial product for retirement planning?
What factors should you consider when deciding whether to purchase an annuity?
Timestamps:
0:00 Intro
2:51 What is a fiduciary?
8:43 Explaining annuities
10:53 The wrong way to look at it
13:23 Another way to look at it
17:53 When is there a case for an annuity?
19:49 Another case
22:06 Qualified Longevity Annuity Contract
24:40 Outro
Create Your Custom Strategy ⬇️
Previous Episode
Pretax vs Roth- Which is Better for You If You're in the 24% Tax Bracket?
If you're in a high tax bracket now and expect to remain in a high tax bracket after retirement, should you prioritize pre-tax retirement accounts or Roth retirement accounts for individuals?
James answers this and discusses various factors to consider in making this decision, including current and future tax brackets, required minimum distributions (RMDs), charitable giving, life expectancy, and the impact on heirs. Using a real-life scenario, James offers a thoughtful approach to help you make an informed decision based on your unique circumstances.
Questions Answered:
Should individuals in high current tax brackets prioritize pre-tax retirement accounts or Roth retirement accounts?
What impact will required minimum distributions (RMDs) have on your future tax situation?
Timestamps:
0:00 Intro
3:48 Considering Roth contributions
7:05 Example
13:25 Charitable giving
15:42 Life expectancy
18:18 What about your heirs?
20:52 Outro
Create Your Custom Strategy ⬇️
Next Episode
Is Your Portfolio Big Enough to Benefit From Roth Conversions?
What are the benefits of Roth conversions in retirement planning? James addresses questions about when Roth conversions become worthwhile.
This episode explores key factors:
Changes in tax bracket
Spousal scenarios
Impact of portfolio size on tax savings
Potential tax savings tend to increase with a higher portfolio balance but be careful not to take unnecessary Roth conversions. James explains different strategies to optimize tax planning.
Questions answered:
Is there a specific portfolio value at which Roth conversions should be considered?
Why might one choose not to do a Roth conversion, and what are the alternatives?
Timestamps:
0:00 Intro
3:14 Scenario
6:47 Tax bracket
11:15 Provisional income
14:27 Spousal scenario
16:45 Bottom line
20:29 Outro
Create Your Custom Strategy ⬇️
Ready For Retirement - Does It Ever Make Sense to Purchase an Annuity?
Transcript
Does it ever make sense to purchase an annuity ? Well , if you speak to a financial advisor that works for an insurance company , they'll almost certainly tell you yes , but if you speak with a fee-only financial advisor , they'll almost certainly tell you no . So who should you believe ? Well , in today's episode of Ready for Retirement , we'll walk through when it does and when it
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