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In my opinion, annuities should not be looked at as investments. They are contracts issued by life insurance companies. Don’t believe me, then buy one and you will receive a contract (i.e. policy) in the mail.

Many investors are familiar with bond ladders or CD ladders, and might already have these types of strategies in their retirement plan. Laddering annuity contracts is a new concept to most people, but you should definitely be aware of these unique strategies for both lifetime income and principal protection.

The hottest “sounds too good to be true” and “best thing since sliced bread” product to hit the financial world in the past few years is the Fixed Index Annuity (FIA). Regardless of your specific financial goals, some agent or financial advisor will most likely pitch you this product…

If you grew up in rural America, you remember the outside water spigot we used with the garden hose and to fill buckets. Imagine if you mistakenly ripped or broke the knob off of that faucet. If that happened, water would flow uninterrupted until you got someone to fix it.

Annuity sales continue to rise every quarter in the United States, and a lot of the credit for driving this consumer popularity is the Annuity Income Rider.

There is a reason 3 guys are wearing both “belts and suspenders” in the picture with this article. It’s not because I grew up in the south and that’s how my Uncle Joe looked at the family reunion! It’s due to the fact that some people mistakenly think using IRA money to fund annuities is duplicitous.

We are currently witnessing market movements that in the past took years that now happen in a day. 500 to 1,000 point swings are commonplace and investors are becoming numb to this type of violent volatility. These types of market swings are great if you are a trader or a hedge fund manager.

For people that enjoy reading the IRS tax code in their spare time, I would encourage you to flip to section 1035 and read about life insurance and annuity transfers. For those of you with a life, just let me explain the important details so it’s easy to understand.

If you have an investment strategy or a retirement strategy, there better be an income strategy as well. In a pension-less world, too many people are relying too much on their Social Security payments. Social Security is the best inflation annuity on the planet, but it was never put in place to be the primary source of retirement income.

Many agents and advisors choose one or two annuity products, learn some of the main details, and then try to sell it to everyone. Spoiler alert, there is no best annuity out there so make sure that you see at least 3 to 5 different carriers quotes when shopping for any annuity type.

What is an annuity? It is a transfer of risk contract that life insurance companies issue. Not all annuities are the same. The type of annuity you own will dictate what it contractually solves for.

During the last financial crisis in 2008, annuity companies weathered that storm very well and positioned themselves to take advantage of the demographic tidal wave of baby boomers looking for contractual guarantees.

I’ve learned the word “annuity” is a curse word in the financial industry. Perhaps some bad sales practices have helped with this bad reputation, or maybe it’s the constant “I Hate Annuities” ads that blanket all platforms. Many people that might need an annuity transfer of risk strategy have, unfortunately, opted not to learn more because of this unearned negative stigma.

I find that the majority of people think that when you own an annuity for lifetime income the annuity company keeps any money in the account when you die. Too many people who needed a lifetime income stream from an annuity didn’t make that purchase because of this common assumption, I can guarantee that.

A horrific stat that can never be calculated is the number of people that needed an annuity contractual transfer of risk lifetime income stream but never bought one because they thought the annuity company would keep the rest of their money when they passed away.