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I Just Earned 3.3% on my Annuity. So why am I so Happy About it? by Scott Stolz, CFP, RICP (week 54)

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  For the second year in a row, I earned 3.3% on my Indexed Annuity, and I’m still happy about it. By Scott Stolz, CFP, RICP Two years ago, I bought a fixed indexed annuity (FIA) from Eagle Life.   On my first policy anniversary, the price of the S&P 500 increased 11.97%.   During the second year, it increased another 20.44%.   In each of the first two policy years, I selected a one-year crediting period with a 4.5% cap on the S&P 500.   Since the price increase was greater than the 4.5% cap in both years, I was credited with 4.5% interest in each of my first 2 policy years.   However, my FIA also comes with a lifetime income benefit.   Therefore, in each year a fee for this additional benefit was deducted.   This resulted in a net return after the fee of just 3.3% each year.   I can just hear the annuity critics now.   Why would anyone want a product that so severely limits the upside potential?   And why in the world w...
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Does It Make Sense to Die with a Bunch of Money? by Scott Stolz, CFP, RICP (week 53)

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    Like many retirees, one of my goals is to leave some money for my kids and grandkids.   This too requires planning.   How much and in what form are two obvious questions that must be answered.   However, I’m come around to thinking that the most important question is when should I give it to them?   Historically, money has been passed on to the next generation at death.   But if you think about it, that really doesn’t make much sense.   Morgan Housel frames this question perfectly in his most recent podcast ( The Purpose of Independence, L… - The Psychology of Money with Morgan Housel - Apple Podcasts ).   He points out that if you die at age 90 and then leave it to your kids when they are close to age 70 and they in turn do the same for their kids, each generation is essentially passing on their money when the next generation least needs it.   Giving my kids money when they are in retirement will surely be appreciated, but it wo...
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Reflecting on My First Year of Retirement by Scott Stolz, CFP, RICP (week 53)

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  Tomorrow will mark the one-year anniversary of my retirement.   It therefore seems natural for me to reflect on how I’m handling this next stage of life.   I’m going to apologize in advance that this blog is likely to get a bit philosophical.   Overall, I think I’ve handled the transition into retirement really well.   As I’ve mentioned in previous blogs, there is a lot to like about retirement.   Mostly it’s the new freedom and flexibility to do things I didn’t previously have time to do.   And a very close second is no longer having to do things I really didn’t want to do but had to do.   Things like back-to-back-to-back zoom calls and annual performance reviews.   But there has been a downside – at least for me.   In a way, I’ve gone through a period of mourning, because there is no doubt that I’ve lost a part of my identity.   Prior to joining Raymond James to lead its insurance and annuity division, I worked for 3 dif...
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Treasuries vs. CDS - How about a MYGA instead? by Scott Stolz, CFP, RICP (week 52)

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  Charles Schwab recently published an article entitled “CD or Treasury?   5 Factors to Consider” ( CD or Treasury? 5 Factors to Consider | Charles Schwab ).   I’ve never owned either in my life, and I probably never will, but I was still curious to read about how they positioned these two safe money alternatives against each other.   The article contained the chart below comparing yields on both options at various maturities.   Given the similar yields, I was not surprised that the article focused mostly on the differences in liquidity and taxes.   Since treasuries can be more easily bought and sold and are also exempt from state income taxes, Schwab gave a slight advantage to them over CDs.   In the end, their advice was to build a ladder of various maturities no matter which option you chose.   The article also correctly advised investors to hold “…a CD or Treasury to maturity.”   While I have no issues with the analysis outlined in ...
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