Annuity Basics: EDU #2622

The Retirement and IRA Show

Jim Saulnier, CFP® & Chris Stein, CFP®

Business, Investing

4.3 • 729 Ratings

🗓️ 3 June 2026

⏱️ 99 minutes

🔗️ Recording | iTunes | RSS

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Summary

Chris’s Summary
Jim and I tackle annuity basics to start off another National Annuity Awareness Month. We cover what annuities are as insurance contracts, the four parties to a contract, the accumulation and distribution phases, and the key differences among the major annuity types. We also touch on tax deferral rules, LIFO treatment, and the historical and industry context behind why annuities remain so widely misunderstood.

Jim’s “Pithy” Summary
Chris and I use National Annuity Awareness Month to get back to annuity basics. I have a book in my office, Lee Welling Squier’s Old Age Dependency in the United States, written in 1912, before Social Security existed, that begins by asking why people don’t use annuities to help provide against want in old age. That question stuck with me because I was taught early in this industry that annuities were horrible, while pensions were wonderful. But, if a pension was one leg of the old three-legged stool, and the 401(k) helped pull that leg out, then maybe we ought to at least understand the product that can mimic some of that pension-like income for retirees who need it. Not love it. Not hate it. Just understand it.

So, we start with the basics: what you are buying, who is making the promise, who controls the contract, whose life the payment is based on, how the accumulation phase works, and when/if the thing you own turns into a stream of income all matter. The word “annuity” covers a lot of very different vehicles. Some are plain and straightforward. Some are complex, with riders, caps, participation rates, and spreads. Some may be useful in the right circumstances. Others may be costly, confusing, or misapplied. And if you do not understand which type of annuity you are looking at, it is easy to use the wrong one in the wrong place.

The post Annuity Basics: EDU #2622 appeared first on The Retirement and IRA Show.

Transcript

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0:00.0	The retirement and IRA show represents the words and views of the show hosts exclusively and should not be construed as investment, legal, or tax advice.
0:06.8	All information is believed to be from reliable sources, however, we make no representation as to its completeness or accuracy.
0:11.9	All economic and performance information is historical in nature and is not indicative of any future results.
0:16.3	Any indices mentioned on the show are unmanaged and cannot be invested indirectly.
0:19.8	Diversification and asset allocation strategies do not assure profit or protect against loss.
0:23.7	Never make any investment or financial decisions based on information offered on this show
0:26.7	without first consulting your financial legal or tax advisor.
0:29.5	Financial planning services offered through Jim Solnier and Associates LLC, a registered investment advisor.
0:47.0	This is the retirement and IRA show coming to you from beautiful Northern Colorado.
0:52.1	Join us as certified financial planner Jim Sondier, as well as Colorado State University Finance Instructor and Certified Financial
0:55.0	Planner Chris Stein teach you about IRAs, borrow-en-case, annuities, Social Security,
1:01.0	pension plans, and estate planning in a fun and enjoyable show.
1:05.3	Whether you are listening live in Colorado or streaming from their website or iTunes podcast,
1:10.6	Jim and Chris want you to know that
1:12.3	they're available to help you plan for your retirement. Just visit their website at Jimhelps.com.
1:18.4	That's Jim H-E-L-P-S dot com and click the Meet the Team button on the homepage. Now here's Jim and Chris
1:26.1	with today's show.
1:37.5	Hello everybody out there. Welcome to the Retirement and IRA show EDU edition. As we get a little bit deeper now into National Annuity Awareness Month, which is the month,
1:43.6	we're going to talk today
1:45.8	about, we're going to get back to the basics, if you will, because that's really the
1:50.2	intention of our discussion about annuities during the month of June. It isn't certainly to
1:56.6	try to convince you in some way to buy an annuity or why a person should buy an annuity. It's
	...

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