251: Annuities: An Intoduction to the Types and Uses of Annuities

Radical Personal Finance

Joshua J. Sheats, MSFS, CFP, CLU, ChFC, CASL, RHU, REBC, CAP

Finance, Retirement, Insurance, Business, Money, Education, Self-improvement, Financial, Independence, Growth, Advice, Investing, Family, Personal, Radical, Christian, Faith

4.4 • 1.9K Ratings

🗓️ 20 October 2015

⏱️ 81 minutes

🔗️ Recording | iTunes | RSS

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Summary

Let's put our work boots on today and dig into some of the science of financial planning. We've been doing a lot of fluffy, motivational-type stuff on Radical Personal Finance recently. That stuff is really valuable but it needs to be tempered with some serious knowledge.

Today, let's talk about annuities.

Annuities get a bad rap in the financial marketplace. And rightly so. They've been shamefully misrepresented, oversold, and abused by many insurance agents.

But do they have a place? Can they be an incredibly useful tool in the toolbelt of a good financial planner?

I believe so.

In today's show I work to share with you some background and structure about annuities. This will help you to understand the words involved and the different product structures available.

We talk about:

The number of lives covered (single life vs joint life vs joint-and-survivor annuities)
When the payments start (immediate vs. deferred)
Methods of premium payment (lump sums vs. periodic payments)
Pure/straight life vs. refund annuities
Fixed vs. variable vs. indexed annuities
And tons more!

Enjoy the show!

Joshua

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Transcript

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0:00.0	If I say the word annuity to you, what are your general impressions?
0:05.0	What image comes to your mind when I say the word annuity?
0:10.0	Well, I know that for the majority of you, an image of excitement and just joy comes to mind where
0:17.4	you immediately think to yourself, man, I can't believe all the wonderful things that I can do
0:21.6	with annuity. What a useful tool. That's not it.
0:24.6	What comes to mind for me, I guess because I deal in this space, is the terrible reputation
0:32.4	that annuities have. I think of popular
0:34.6	commentator and consumer activist Clark Howard he always on his radio show which is a
0:40.8	good radio show by the way if you enjoy it if you can stand how slow he talks
0:43.4	but if you listen to his radio show any time the word annuity comes up on his show he
0:49.0	talks about it as being a dirty word that's his general opinion of annuities. Well today I'm going to try to
0:55.2	approach that topic and I'll not argue with Clark. He does a good job and he's probably
1:00.8	right for many annuities but today I want to give you an overview and a framework that you can apply to the concept of an annuity and my goal is that you would feel empowered and strengthened that you would feel like you have a clue as to what is
1:18.8	an annuity and how does it work? Welcome to the Radical Personal Finance Podcast. My name is Joshua Sheets and I'm your
1:39.6	host. Thank you so much for being with me today. I am excited to bring you this topic.
1:43.5	We're going to continue our technical financial planning discussions.
1:47.2	It's been a while since I've done a technical finance show
1:49.5	and working to get back into the swing of the show
1:51.7	the way that I want it to be, hope you enjoy it.
1:54.1	Don't be scared off by the word annuity.
1:56.2	Relax, sit back, and enjoy some learning and understanding.
2:07.0	My intent with today's show is to empower you so that you're not intimidated by the word of an annuity so that you understand
	...

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