Financial Advice for Seniors About Annuities Without the Fear and Greed Pitch

Over 10,000 Baby Boomers are retiring every single day and millions more already enjoying their retirement years. Because of this, older adults are too often the targets of annuity salespeople.

Annuities are not for everyone. Annuities are contracts that primarily solve for lifetime income and principal protection. Those are simple goals, but unfortunately “fear and greed” selling still works with many annuity pitches to seniors.

When it comes to financial topics for seniors, annuities should be factually addressed. Whether you are a senior citizen, a child worried about their parent being vulnerable, or an involved caregiver, it’s important to be aware and present with all financial decisions….especially annuities.

Because That’s Where The Money Is

As the bank robber was once asked, “Why do you just rob banks?” His answer was simply, “Because that’s where the money is!”

Millennials and Gen Z does not control most assets in this country, Baby Boomers do. Because of that, “financial strategies for seniors” and “financial tips for senior citizens” proliferate advertisements and the bad chicken dinner annuity seminar circuit.

Life insurance companies that issue annuities are not the only ones targeting seniors to get a piece of their money, the rest of the financial industry is focused on them as well.

Suitable – Appropriate – Vulnerable

The annuity industry is committed to making sure that all annuity purchases are suitable and appropriate. That is an inarguable fact. They depend on the agent and advisor army selling their products to obtain information and truthfully fill out the application. That annuity application is the only thing annuity carriers have to make sure the product fits the clients’ stated goals.

A lot of seniors have taken on the financial stress of handling their own retirement planning or estate planning. Many more are getting inundated with “financial advice for seniors” from all fronts with “fear and greed” annuity sales pitches that always sound too good to be true.

With annuities, there is never any urgency to buy. The only urgency is to make sure that you fully understand the product. Your buying decision should be made on your terms and time frame, and under no sales pressure from the agent or advisor. Ask to see the company provided product information including product disclosures and specimen policies before moving forward.

Parent/Child Role Reversal Needed

In one of life’s cruel twists of fate, many times children end up being the caregivers as parents get older. I know that is true with my 81-year-old mom that lives in Florida. I am constantly looking into her financial situation to make sure that she is not getting taken advantage of by a financial adviser or annuity agent. I am the one that is overseeing her financial plan and making sure that she is making good decisions.

For those of you children or caregivers not in the financial business, I would recommend that you find a financial planner or find a financial advisor that is “fee-only.” I would also encourage you to look up Certified Financial Planners (CFP) in the area and interview them as well.

Yes, I am an independent annuity agent giving that advice.

If a fee-only advisor or CFP determines that an annuity should be a part of the financial plan, then they will find an objective source like me to find the best contractual guarantees available. Financial questions for seniors need to be asked by qualified professionals that are figuratively sitting on the same side of the table as the customer.

Transfer of Risk for Specific Needs

Annuities and seniors can be broken down into two words. Simple and Short.

Annuities are contracts that are issued by life insurance companies. They are transfer-of-risk strategies that solve specific financial goals. Retirement income and principal protection are the primary uses for annuities.

A senior’s financial goals will be different from someone in their 40’s or 50’s. Those “youngsters” need true market growth and can shoulder that risk. Most older adults are moving from growth to principal preservation as they increase in age. They can no longer afford to shoulder as much risk and need to transfer that risk. This is where annuities can properly fit into the financial plan.

Simple and Short Wins

Annuities and seniors can be broken down into two words. Simple and Short. If an annuity is appropriate, it needs to be very simple and easy to understand and as short-term as possible. It is really that basic.

Most seniors are living on a fixed income with Social Security being a primary source. A recent study showed that 6 out of 10 seniors do not have sufficient retirement savings or guaranteed income streams to carry them through the end of life. Annuities are the only product type that can provide a lifetime income stream and can be structured so that 100% of any unused money goes to the listed beneficiaries on the policy. Most seniors are turning to these annuity income guarantees to fill in any “income floor” gaps.

Cognitive Concerns

As the population gets older, senior care and “money management tips for seniors” will become more prevalent. As I continue to oversee my Mom’s estate and work with thousands of senior citizen clients, I am always aware of cognitive issues as people age. Financial advisors and agents must get family members or other invested persons involved or decline the sale if they feel the person is not making sound decisions. It is a very important part of the job.

A great source is the National Council On Aging (ncoa.org), which provides fantastic resources for all parties involved.

So my financial advice for seniors about annuities is to be careful, take your time, do your homework, and make your decision on your terms and your timeframe.


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