Life After Work - Will I Be "OK"?

  Twenty years ago, I put together a training session on fixed indexed annuities (FIAs).   The annuity world was much different back then.   Variable annuities made up almost 70% of total annuity sales.   FIA sales were only $25 billion in 2006 – only about 20% of what is being sold annually today.   To say that most financial advisors didn’t know how these products worked back then would be an understatement.   In order to take away the mystery of how a product could provide upside with downside protection, I needed a simple way to explain the mechanics of the product.   I invented a fictional FIA I called the “Sports Team Annuity.”   Rather than base the returns on a stock index, I proposed that an insurance company credit interest based on how a particular sports team performed during a season.   I explained that the insurance company would take a portion of each policyholder’s deposit and place bets on that team in Las Vegas.   I rea...

  In order to help generate ideas for this blog, I read a lot of articles on retirement planning and annuities in general.   It seems that every article I read on annuities mentions “high commissions” as a reason people should be wary of annuities.     As an example, a July 21, 2026 article in Rethinking65 entitled “The Behavioral Errors Ruining Retirement” ( The Behavorial Errors Ruining Retirement, Financial Planning Articles for Financial Advisors & Wealth Managers ), says annuities “…are a prime example of conflicted advice, in which customers are sold a product attached to an often-large commission.”   Before I delve further into this issue, I want to first say that I really liked this article.   It was a great summary of the emotional challenges many retirees face when trying to spend in retirement.   Without knowing how long they will live and what their actual expenses might be – especially health care expenses – many retirees end ...

  A year ago, I purchased a Brighthouse Shield Registered Indexed Linked Annuity.   Yes, that’s a mouthful.   The industry refers to these as RILAs – an acronym that means absolutely nothing to almost everyone.   But the industry has never let practicality get in the way of a good acronym.   Since I just past my policy anniversary, I sat down today to see how this annuity has performed thus far. First let me do a refresher on RILAs.   Similar to fixed indexed annuities (FIAs), RILAs base your return on specific stock indexes.   Also, like FIAs, the return you receive is limited in some way.   In exchange for this upside limit, the insurance company absorbs some of the potential downside should the selected stock indexes fall in value.   Think of it as getting a portion of the upside of stocks, but only some of the potential downside.   The first RILA was introduced by AXA/Equitable back in 2010.   LIMRA estimated total RILA sale...

  Multiple recent studies have found that approximately three out of every four Americans think the economy is only doing “fair” or “poorly.”   Gallup recently reported that 44% of Americans think the economy is “poor”.   Only 22% think it’s either excellent or good.   Two in three Americans also think the economy is getting worse.   ( U.S. Economic Confidence Improves in July ).   This negative view has generally persisted since Covid. This is probably not surprising news to anyone.   It’s hard to pick up a newspaper without finding at least one if not multiple articles about higher costs, new layoffs, problems with Social Security, etc. (well, it is hard to actually “pick up” a newspaper, but you know what I mean).   And since bad news sells better than good news, news stations love to talk about how bad things are. But is it really true?   The Federal Reserve recently reported that baby boomers and the silent generation are now sitti...

  My wife and I are prioritizing the more active travel destinations while we are still in our go-go years.   Hence, a trip to the Galapagos islands landed near the top of the list.   While on our ship we were talking with a woman in her mid-50’s.   The conversation came around to working out and she explained to us that she was training to be age 80.   I knew exactly what she meant, because I’m now doing the same.   In my younger years I worked out to gain more muscle, or prepare for a half-marathon, sprint triathlon or long bike race.   Now my goals are much more modest.   I just want to put off the slow-go years for as long as possible – hopefully age 80 or later.   Oh, and I definitely do not want to become the guy in softball that gets thrown out at first base by an outfielder because they know I can barely hit the ball out of the infield and/or I’m struggling to get to first base.   Sadly, I’ve seen it happen.   The day that h...

  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...