What Is An Annuity And How Does It Work?

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[jorgealmeyda]

Dave’s body language when she mentions annuities, is priceless.

[smithersrob]

If she went to them freaking out about the volatility of her account and said "what can you do so my account value doesn't swing around so much" then they did EXACTLY what she asked. They're not financial planners, they're account managers, she asked them for a product with different characteristics and they executed the request.

[dwrussell]

I work for an annuity company. Annuities are best purchased when you talk to an actual firm and an actual licensed fiduciary advisor, and you have a of money to invest. Some of the richest people in the world have annuities.... not middle class. Fixed annuities are never the answer. Index and Variables are the way to go if anything. Fixed annuities are only necessary if you have a 401k or something you wanna roll over to get guaranteed income for the rest of your life.

[Harperrr.]

My spouse and I are adding a variety of stocks/ETF to my present holdings for the long term, We've set aside $250k to start following inflation-indexed bonds and stocks of companies with solid cash flows, I believe it is a good time to capitalize on the market for long-term gains, but it wouldn't hurt to know means of actualizing short term profit

[TV-xvle]

My mother has a fixed annuity that is paid up. She was allowed to withdraw some money at any time. The annuity was one of the best things she did because it was a passive income that kept her afloat for a few bad years.

[instrumentalfrand]

That is the most fascinatingly incomplete explanation of an annuity I’ve ever heard someone give so confidently.

[johnwedgeworth]

The fact that Dave instantly grabs his head just as soon as she says “annuity” tells you all you need to know in the first minute of the vid!

[ellislamb]

This is a very specific and fragmented view of annuities. For the caller in this video, she was worried about the value of her assets moving up and down, and her advisors suggested a partial investment into a product that provides stable income and then she wouldn't have to worry about all the volatility. The advisors could have chosen other products but to calm someone who cant sleep at night...they offered her a solution. For someone her age(im assuming she's 30-50 years old) it's probably best to invest in mutual funds for the long term, but that isn't what she asked the advisors to do. It's easy for Ramsey to sit there and critique

[lorraineforte]

I'm so glad I didn't fall for an annuity when my bank tried to sell it to me years ago, my gut instinct told me it can't be a good thing if my money was frozen for ten years.

[TRUCKERTV]

we gotta stop this and take responsibility for our finances!

[AlvaSudden]

My investment advisor is pushing annuities also. I asked her "when do I get my principle back?" and the answer was just too squishy for me. She's pretty much fired at this point.

[JohnDawson]

Is that YETI tumbler glued to the desk? It never moves! 🤣

[DannerBanks]

Company sponsored financial advisors just aren't very good ... had the same experience as this caller.

[RonaldKragnes]

For comparison, if money had been invested from Jan 2019 to Dec 2019 in a portfolio of 50% Bond Fund (VBMFX) and 50% S&P 500 (VFINX), then your return would have been 19.97% over that period of time. She missed out on high returns in Mutual Funds, and the tax deferral was NOT needed because it was already in a tax deferred 403B. I would complain to the insurance department in her state, and have lawyer send them a letter to undo everything, to not pay the surrender charge (penalty).



Also in my opinion, most Variable Annuities have very high fees, and are not necessary for the majority of people either.

[TheJackpotQueen]

I was given the choice to take a lump sum at my husband’s death pay a penalty of 30% bringing me to like 40k or an Annuity for the rest of my life up to 100k but I do pay taxes on my monthly amount I only took it because over time it was more money for me.

[ChrisInvests]

Why would she purchase an annuity without understanding what it even is?? 🙄🤷‍♂️

[htimsrecneps]

She was freaking out about volatility and they helped her reduce volatility. It's her fault not the consultant's fault that she regrets it.

[puduhari]

Thanks Youtube for showing this to me, the first time I considered annuities :) Thanks Dave.

[keithduchnicki]

Tanya, you didn't make a big mistake. You have $500k of retirement. You don't need to touch the money. I have something similar that a Ramsey sponsored advisor got me. Five years ago I put $82k in an annuity. It's now valued at $189k, that's a return of 19%. Dave is famous startling people. At the core he's good, but there are moments he's just blind. This is one of them.

[ShutUpAndRoll]

403(b) are tax shelters annuities and an annuity provides a life time stream of income. Life insurance protects you from dying to soon whereas an annuity protects you from living too long. Once again Ramsey just shoots advice and slanders without giving/knowing what he is talking about...