How annuity guarantees can improve your love life

Typical stock market investors hear the word “annuity” and immediately equate these transfer of risk strategies with poison-like side effects.

That’s a short sided view. Annuity contractual guarantees can actually enhance your current investing acumen and cohabitation status.

Do you have the ‘annuity flu’?

A good friend of mine is a world-class money manager, and tells me that every time he breaks down annuity numbers in comparison to his market guru strategies, he gets the “annuity flu.” I keep telling him that is never going to change if you compare annuities to investments.

Annuities aren’t investments. They are contractually guaranteed transfer of risk strategies that solve for things like lifetime income, legacy, or principal protection. If you are trying to validate annuities using your market brain, then stop the insanity now. The question you need to ask yourself is if you died tomorrow, are contractual guarantees in place so that your significant other can continue their current lifestyle uninterrupted without having to manage the assets or oversee and trust someone who does?

GID — Guaranteed income dysfunction

We’ve all seen the purple pill “performance” type ads, and no, we’re not talking about stock market performance — but wouldn’t it be great if all it took was a little pill to spice up your portfolio.

Guaranteed income dysfunction, GID, is a term that I coined to describe you market mavens out there that think you can provide the income needed for your spouse or beneficiaries without contractual guarantees in place. After the markets have closed on your life, most spouses will only care about seeing their kids and grand kids, and maintaining their desired lifestyle. You know that’s the truth.

Don’t confuse a bull market with genius

Everyone is a guru dart thrower in markets like the ones we’re currently experiencing. If you are starting to get cocky or thinking that you actually understand how markets work and that you can compete with the big boys now, I have one thing to say to you. Slow down Sparky! Don’t confuse a raging straight-up bull market with genius. Remember that the pros are betting both ways, not just north, and are better than you.

After the 2008 debacle, marital bliss in many homes was disrupted by the cacophony of verbal knives stabbing away with libido-numbing “I told you so’s.” Guaranteeing a lifetime income stream that your spouse or beneficiaries cannot outlive can prevent this horrible crow-eating event.

If “they” know the guarantees are in place, your investing habits and obsessions will be looked upon like fishing or golf. Annoying at times, perhaps expensive, but harmless.

Your spouse is right about wanting contractual guarantees in place even if that means missing some of your precious market runs. Down deep you know that they’re right, as always. As for my claim that annuity guarantees can improve your love life, I’m still looking for the insurance carrier to fund the study to validate what I already know to be true.

Your better half will love you for making sure that everything is contractually taken care of when you pass away. The sooner you can check that box for them, the sooner you can enjoy the potential spoils and ongoing good will.

Originally published 12.30.14 by MarketWatch.com