Dave, Can You Clarify What A Fixed Index Annuity Is?
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- Опубликовано: 9 сен 2024
- Dave, Can You Clarify What A Fixed Index Annuity Is?
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I don't know where Dave got his insurance license from, but he needs a refresher course on Fixed Indexed Annuities. There are no fees unless you purchase a rider for an additional benefit. Commissions are paid up front and do not come out of your investment; they come our of the insurance carrier's pocket. A mutual fund pays the broker commissions out of your investment. Also, a Fixed Indexed Annuity can pay you a guaranteed lifetime income. You can't get that with a group of mutual funds.
The fees may come from the insurance companies pocket, but they are earned internally by limiting the upside potential of the growth through participation rates, margins, or caps. Most people never annuitize their annuities either but that is a different matter.
No, he doesn't.
@@rbscott21what does “annuitize their annuities” actually mean? How does one annuitize their annuity?
@@sheilabright2091 annuitizing means changing from growth to income by turning on systematic monthly income for a period you decide from 5 years to life, lifetime income usually provides the highest level of cash flow per dollar but comes with the risk of dying too soon. This risk is reduced by asking for a refund guarantee from the insurance company at death if you have not been paid all your principle. You will ask for a quote first, compare that to what other companies pay out for the same amount of money, take the highest offer generally, and enjoy guaranteed monthly income.
What would you recommend if I wanted to invest 15 K and could leave it for 10 years? Thanks.
A fixed indexed annuity with a 5-6% floor!!?? SIGN ME UP! Where can I get one of these Dave? 😂😂😭😭
It's literally scary watching Dave Ramsey know nothing about these products and have so much to say about them
It definitely is, has no ideas what he’s talking about
Dave promotes his cult and pushes his preferred investors. If your not listening to what he says everyone else is wrong . Yet he sells books, course's, and pumps those mutual funds getting 12% all day long . Oh , make sure you use his preferred realtors because they know more 😂
Protect the income you need to live on to live the lifestyle you are accustomed to. Freedom to give and freedom to live. Freedom from the fear of outliving your income, sequence of return risk and becoming a burden. Commissions vs Fees shouldn't be the focus. Right tool right job.
Who cares what commission the seller receives as long as YOU get what you what, especially if you want to protect your principle and obtain some growth and/or income?
Haaaaaa that's funny
ha
LOL. Goofball. The seller's commission is 50%? Who cares! Derp.
@@kgm2182try between 5 and 10% paid from the insurance company’s general account.
Not all FIA have a fee. Do your research. You can also have the advisor disclose how they get paid. In the money game you need to be ok with others making some money as well. Much love god bless.
very true! love to hear this as a someone who works in the finance industry!
fees come from the up the cap market. and dividends you don't get in the annuity
Cmon Dave yes FIA Annuities with higher participation rates have fee's but some options have virtually none if the participation rate is lower! Mutual Funds are .70-1.50% fee which is similar to high participation rate FIA annuities! Last time I checked mutual funds don't have a floor as you mentioned while FIA annuities do! How about you talk about the bonuses they provide consumers? Sorry but you have an agenda and you need to study up on FIA Annuities instead of telling people to run!
You bring up some important points about Fixed Indexed Annuities (FIAs) versus mutual funds! The balance between fees and benefits can vary widely. Have you explored how bonuses and participation rates in FIAs could align with your long-term financial goals?
Ramsey is wrong on this. An INDEX Annuity is a FIXED Annuity with a variable interest rate. The Princial is guaranteed and there are no fees unless the clients adds an additional rider. But the principal IS FIXED, like a regular fixed annuity. What insurance companies do with this type of annuity is that the money they would have paid on a fixed annuity, instead of paying it to the client, they buy derivatives on the index. So, if the index is up, the client makes money, but if the index is down, the client makes no money but always the principal is guaranteed by the insurance company. There are variable annuities that invest in index funds. That's NOT an index annuity. Ramsey is talking about a variable annuity that invest in an index fund, not an index annuity. I've been working with index annuities since 2006.
Wrong. He is talking about FIXED annuities. Fixed annuities charge a great deal in fees, but call it "interest-crediting strategy" and pretend like there is no fee. The point-to-point crediting strategy is designed to benefit the insurance company at the expense of the contract holder, and the longer the time-frame, the more damage it does to the returns of the shareholder. I have been in the investment business for a long time, and never have I ever seen an indexed annuity fulfill the implications given by the annuity salesmen. They cost a lot of money to the end-user, all because of the "floor" and scare-tactics. It's absurd.
@@thepianist7084 please post a link to the Fixed Index annuity documents with all those fees that aren't riders. Variable Annuities that invest in index funds do have mortality and expenses charges, but I haven't seen an EIA with those charges. I might be wrong but would like to see the documents with all those fees that arent riders. Thanks. 20 years in the life insurance and securities business and don't recall any. Again, I might be wrong. 😈
@@emsantiago As I already explained, the interest-crediting strategies and the caps are the most basic of fees. Also, being indexed to the SP 500 and not getting a single bit of the dividends is a further fee. You see, when the insurance company gets to keep your earnings, that is called a fee to normal people. But I am very well aware that since labels can arbitrarily change, we'll just call it something else and pretend it isn't a fee. What a load of obfuscating rubbish. It's shameful. But insurance salesmen won't see this because, as Upton Sinclair once said, "it is difficult to get a man to understand something when his revenue depends upon him not understanding it."
There are FEES in every product...period. They may be hidden inside the product as a spread, cap, or participation rate, but they are very much there. Please reach out to the compliance department of the company you are selling and have them explain it to you. No one works for free
@@thepianist7084insurance companies DO NOT get to keep the gains above the cap!!!
What Dave doesn’t mention, which is the arguably the main component on a fixed indexed annuity is the guaranteed lifetime income. I haven’t found a mutual fund that will do that. Both good tools, different applications.
Buy a SPIA or a DIA
The income stream is fixed. It wooo lose value to inflation too.
@@michaelmahoney1829 no it won’t the income stream can increase over time but if you have a lifetime income rider you will never run out of money.
yeah with no inflation protection to boot
@@michaelmahoney1829 not true the participation rates have gone up on the products. So you earn more in interest as you get interest.
But what about MYGA's? They are paying a steady 5.3% for a fixed period with free withdrawls for 5, 7, or 10 years! In retirement, they seem to be a good way to create a revenue stream, upon which I can dollar cost average any yearly residual back into the market.
There are Fixed Index Annuities that protect savers from the downside where the Insurance Company pays the sales commission to the Advisor and no additional fees.
If You Lose 50% of Your Principal You Will Need A Gain of 100% To Get Back To Your Original Principal - Good Luck With That.
These Fixed Index Annuities protect Savors from going backwards at time in there lives they don't have the time to catch up again. Buffett's #1 Rule of Investing is Principal Protection.
I inherited $ 10 million last year--I spend $ 9 on alcohol, loose women and gambling--The remaining $ 1 million, I just wasted.
Liar
@@JohnSmith-pg9ns Hello John--This is an attempt at humor. The humor lies in the analogy that gambling and loose women were not wasteful expenditures of money.
Shame on you Dave, the caller asked about Fixed Index Annuity but your answers are dumb.. Next time just admit that you don’t know what is Fixed Index Annuity and how it works 😂 Index Fund is different from Fixed Index Annuity 😂
Dave is a good guy, but here he made several incorrect statements.
The floor is usually 0% (no growth instead of losing $ when in a down market).
The commission is paid by insurance company (no cost to you).
The fees are $0 for a decent annuity. Only pay a fee if you add optional riders.
The TIAA lifetime annuity, if you are in TIAA-CREF, does not have high fees. You don't want to out a majority of your retirement in it but it is something to look into as part of your retirement plan.
Last year, I made a property sale and had over $1 million in proceeds. I allocated $400k to index annuities and put the rest in the trending High Frequency Trading style. So far I've more than doubled the annuity premium from the stock market and sure enough will not need an annuity for the rest of my life. However I won't discredit annuities in any way, they buy you peace of mind but then a lot of people buy them out of fear of what's yet unknown even when it's not the best decision for them. If you need growth, try other stuffs. Annuities should be a backup plan, just like an insurance. Concepts like HFT/ algo trading and diversification of assets can be of great help for growth oriented individuals while still retaining control of your money.
I agree with the idea of considering annuities as an insurance rather than an investment. Nice portfolio you have going on though. kudos!
How does algo trading work? Might just be what I need now. I still need growth as much as the downside protection that annuities provide
@@George-hl7jf It's when your account mirrors someone else's trades. Trick is knowing who to copy. I managed to work my way into Josephine Guevara Laporte's popular algo trading program. She's a renowned CFA, you should check her out. There are other similar options out there but consistency and smart diversification skills were the clincher for me with Josephine.
@@profderek8111 hi I'm already in retirement and have like $700,000 in a CD account with a very low interest. I only need $30,000 for liquidity purposes(emergency fund) and plan on growing the bulk to over a million. I found Josephine Laporte's official website after looking up her name. Quite impressed at her portfolio and will schedule a call with her right away. What's the fee structure?
@@theexpendables3152 Since it's an algo trading based model, it's very much transparent because you can actually see what assets you have and how much growth your portfolio has achieved. She takes 10% of the profits, no hidden fees.
I cannot find this answer anywhere. Do insurance companies want you to annuitize your annuity as in start drawing money or do they rather you keep it in there
"annuitizing" is "keeping it in there" and giving up all ownership to the principal in exchange for the guaranteed lifetime income. Works for some people in some situations but I think income riders are more beneficial. And you don't give up the principal.
Depending on whether you first invest a lump sum or pay into the policy over a set amount of time, that determines when you can take out any money. They don't really care how much you take as long as you're following the stated amount in your contract. Annuities typically have a set time you chose to start getting paid out, while an IUL does the same thing but you can take it out whenever your account reaches a certain value. If you put 10K in an FIA and chose to get paid out whatever it makes in 20 years, you cant take any money out now (but this can also be changed in some contracts). You put 10K in an IUL, you can take out some of the account immediately because you already have cash value in the account and you're allowed to remove a % of it based on the contract rules. Most IULs let you remove 50%-80% of the account once you have cash value. Since these are all life insurance products too, your health will also determine this. I think whole life products like IULs are better than annuities, but that depends on your situation. IULs are awesome but you also have to be pretty dang healthy to even qualify for one.
They dont care one way or the other. It depends on your personal needs.
I never recommending to annuitize your annuity. You can draw against it every year, with the option of NO fees and if there is any money left when you pass…. You can leave the rest to your beneficiaries. Dave Ramsey gives a lot of good advice but he also also gives some bad advice.
They don’t care. Life insurance companies are the only companies to offer annuities because they can leverage their life insurance book. They’re on both sides of the risk. If you live a long time, they’re not paying a death benefit from life insurance. If you die, they’re not paying lifetime income from an annuity. Make sense?
The director needs to my this guy take his continuing education twice a year if he sees this video 😂😂😂
FYI some indexed annuities don’t charge fees other than surrender charges.
The guy who called in is at retirement and is nervous as all get out about losing his life savings. Risk tolerance is the key to this situation. Indexed annuities eliminate the risk of losing money when the market goes down, while still allowing for some of the growth when the market goes up. A lot of people are comfortable with some of their money invested in something that won't lose . Long term growth mutual funds will average about 10% per year. Indexed annuities will average 4-7%. The discussions about commissions is a half discussion. Yes, people who sell annuities get paid either up front (6%) from the insurance company or a smaller amount each year (1%) you own the annuity. Advisorers who invest your money get paid a percentage (1-2%) of how much money you have invested with them every year even when your investments do poorly.
Also, not mentioned is some of the plus up options some annuities provide. Some companies will pay you a percentage up front. Ex. You buy an annuity with a single premium of $120K with a plus up option of 10% and gain $12K in the beginning to accumulate interest over a period of time. You then are guaranteed a percentage maybe 5% on your money over the period of 10 years. Mutual funds and stocks can't guarantee nor give that kind of sign on bonus or guarantee a certain percentage. It's all speculative!
The problem with us, Randy, is that you didn't say that mutual funds also charge a lot of fees and are invested in the market so you can lose money when you retired . I would prefer to have the money in a small index fund and diversify my portfolio so I can avoid the financial advisor fees the mutual fund fees. 50% fixed interest so I can secure my retirement, 30 % small index funds or better Roth IRAs, non-taxable retirement income, and 20 for emergency liquidity assets like stocks. Randy also wants a commission from the agency of financial advisors who sell mutual funds.
Question..let's say I have a fixed annuity for life by transamerica..is the Annuitor the owner of the policy? Or would transamerica corporation own the annuity..I assume annuit is same as owner.
With indexed annuity doesn't invest in stocks so we don't get dividends , which is huge down side
If the bank offers a fixed index annuity, Is my money safe? I’m planning on investing 100,000. Please advise
Why does DR say fees and commissions are good (I assume with Smartvestor buddies but fees and commissions with fixed index annuities are evil?
Dave is arguably the best marketing genius in the country. He does not get paid to recommend insurance products except term life insurance. He didn't say anything about why billions are put into index annuities by a lot of smart people. He went straight to the commission. That would suggest he has rudimentary knowledge at best of FIA's and how much agents are paid.
FACT- FIA's generally pay agents up front, but not from your initial investment, fees are built into the investment return.
FACT - Most Mutual fund salesmen do not generally recommend index funds because you don't need an advisor to buy one. SPY has almost no fee. VFIAX - Vanguard Index has almost no fees or caps.
MF salesmen charge a 1% fee plus the internal mutual fund fee. Sometimes they recommend A shares with commissions up to 5.75% of your initial investment. How is that 4X or even 2X what the agent got paid if they chose not to take a trail?
In 10 years, the MF advisory fee totals 10% on your money. If you average 10% annual return with a MF salesman, the fee represents 10% annual commission on your growth. When your fund loses money, they still get the 1% fee. That's interesting... don't you think?
Also, that is more than the insurance salesman got paid by as much as 30-50% depending on the term of the contract.
Dave sells endorsements and advertising. He gets paid thousands per month from every person /company he endorses inculding Mutual fund salesmen and insurance agents.
Consider carefully who you take financial advice from. Look for a CFP, ChFC, CLU or other licensed and experienced advisor not an advertising executive. Just saying
It’s sad that someone that has influence over millions gives incorrect advice. Get advice from a registered rep that can offer mutual funds, stocks, bonds, alternatives, annuities, fixed, indexed and variable. And most importantly, a series 65 or fee based license. This makes him a fiduciary. Sorry Dave, indexed annuity without riders have no fees, period/paragraph. Finally, only use GUARANTEES for the income that pays all necessary expenses, all other can be invested however you want
Being a fiduciary does not mean the client is getting the best deal. Consider this: Do you want to wrap a Vanguard index fund and pay 1.1% in fees or place your retirement rollover in an “R” share with American Funds and pay 77 bps. If you have less that $500,000 to invest you will probably pay a RIA about 1.6%. NQ accounts are probably best with a 65 advisor. If we are talking purely about fees, a brokerage account might have less fees.
Chris, for people who can stand major corrections, are savvy with money, understand debt, compound interest, taxable, tax deferred, tax free, when to take social security, life insurance needs if any, LTC needs if any, and the list goes on. If someone is all of these, by all means, DCA into a range of Vanguard ETF’s and live life. My 29 years and 8 months working with and helping people, especially now, older ones that are not all of these savvy things, they need guidance. Now, there’s also so much mis information like the stuff that started this whole conversation. Sorry, Dave is a good guy, probably has helped millions of people, just wish everyone would stick to the facts about things like annuities. Nobody can guarantee an income you can’t outlive, which can be done with a plain fixed annuity, indexed annuity, even variable annuity (not as attractive as they once were and often expensive but still have a niche) My managed money clients on 12-31-2021 were up 42% NET OF FEES, in that 3 year span, during the worst pandemic. Do I charge a gross of 1% yes, but if the net result of this highly diversified portfolio meet or exceed the benchmarks, then everyone wins. It allows me to take their calls, I’ve helped 6 disabled clients file and get their social benefits, etc. I took over stock accounts before the pandemic that were full of oil and gas companies and sold it all before the crash. One client had $750,000 in a very risky/ volatile portfolio that would have fallen about 60% at the worst. I’m here to tell you, not many people can stomach 33%-50% corrections, I’ve seen 3 in my career. Our portfolios use Vanguard ETF’s, alternatives, and if they like American Funds, but the difference is they limit downside to around 10%. If you lose 10%, you need 11 % to recover. You lose 50%, you need a 100%. That’s all for my reply, just living and dealing with reality.
“Fiduciary” was implemented to give customers a false sense of security.
Is this annuity doesn't have expense ratio ?
Is in detail statement also no charges are debited ?
Its initial investment also doesn't charge some Lumpsum amount ?
If al this is correct then is it a charitable organisation ?
🤔
Completely agree, Dave gives bad advice. If that guy has 1.8 million he should have at the very least taken some portion of that and put it in a fixed index annuity. Now he probably took all of it and put it in mutual funds and is losing money.
Some of these people that are nervous with 1.8 million. I wish I had that problem. Why would this guy do anything? Why not just take the monthly withdrawal. That's gotta be 8k a month at least
This is actually insane that he can just say this. FIA’s have NO FEE’s! He has no clue what he’s taking about and he is just going to steer so many people away from what could be a good fit for them. FIA’s offer downside market protection with high upside market gains and they work for many people with old 401k’s or money that is not growing..This guys terrible
They do have fees. The fees are built in to the cap, participation rate, or margin. If there were no fees, how would the company pay the agent 6% and still make a profit for themselves?
@@rbscott21there are no fees. The insurance company buys an option. The caps and par rates are determined by the insurance company’s option budget. The company offering the option gets to keep any money that is gained above the cap!
Tony Robbins praises FIA so I’ll go with Tony ribbons
I think its so bizarre when people have 1.8 million to retire and are nervous. I think its an act and they want to brag. How would you run out of 1.8 million in a regular retirement.? Are you planning on travelling nonstop or golf daily. Seriously take a chill pill.
Floor at 5% or 6%?
Seems like a lot of dough for a government employee.
Take your 1.8 million and go ALL IN on Bitcoin 😊
I don’t know why he gives investment advice when he’s not an expert in insurance or investing he’s an expert in getting people out of debt that’s it. He’s probably so belligerent that when someone tries to explain how things actually work to him, he shoots them down and walks away. He just likes to give his unlicensed opinion.
Dave, come on man....be better. This entire video is full of inaccurate statements. A Fixed Index Annuity is a zero-fee product. The only time there is a fee is if an income rider or performance enhancement rider is added. These optional riders provide contractual guarantees and the fee for the riders range between 1-1.5% on average. These fees are in line with the average 401(k) and/or mutual funds which provide zero guarantees of income or protection. A Fixed Index Annuity is a product that provides a contractual guaranty of principal protection. They are suitable for the moderately conservative investor who does not want to take risk in the market but is looking for higher return potential that traditional safe money instruments can't provide. It's as simple as that. I respect alot of your work, Dave. But this video is misleading to the people who could benefit from a Fixed Index Annuity when used appropriately in their retirement portfolio.
- Jeremiah
I love your explanation. I'm 48 and have a couple of retirement vehicles from former employers that are sitting collecting very modest amounts of dust, and won't be worth much of anything when I go to retire. Been looking to roll those investments into FIA's so that they will be viable sources of income at retirement. I'm not looking to do anything aggressive with the money. Just want to parlay these modest sums into something meaningful (if not substantial) for down the road while I can. Anyway, your explanation was excellent and gives me something to go on as I continue my research. Thanks!
The return on a FIA is 2-4%.....the fees are baked into the design. Buyer beware
@@michaelmahoney1829 Another comment made by someone uneducated on the subject matter. This is a crock. Fixed Rate Annuities are guarantying 5.5% right now. An FIA will out perform a MYGA typically by 2-3% over a 10 year period.
@@michaelmahoney1829 You are right, and the Annuity Association is wrong. The fees are indeed baked into the "interest-crediting-strategy." These point-to-point strategies are carefully designed to greatly benefit the returns to the insurance companies over time, and manifest themselves to the contract-holder in greatly reduced earnings. They may not technically call that a fee, but anyone with a lick of sense knows that that's exactly what it is. Clever wording does not make it okay to call something a "no-fee" product. It's absurd.
ha yeah they work for free
Most FIA.s have no fees
Sorry Dave but I’m a longtime follower of yours and you are wrong on the fix index annuity
Example you said that a fixing ex annuity has a floor of perhaps 5% no that’s not even close
It makes it hard to trust you on other things when on something that is so definite like this you are so wrong on so I just wanted to point that out to your readers
I would love a 5% floor instead of my zero is my hero! On the other hand, 5% of nothing is zero. It's all cash preservation in this economy.
You heard that too. If that is his understanding, he is mixing terms. He probably meant the 5% income rider or death benefit that can be an optional rider. He was clearly out of his wheelhouse on that explanation.
That’s wrong info.
Dave’s source
: Trust me bro 😂😂😂😂😂
I'm surprised Dave Ramsey is keeping most of the comments up.. Maybe he will do research on Fix Index Annuities next time he talks about them.
He doesn't need to. There is a reason these products are hocked via "free dinners" and SSA Seminars.
Sorry Dave you're 100% wrong on the FIA! They are no fee's. He's confused. His talking points are about a variable annuity. It's a shame so many people follow his advice. Like someone said in the comments. Talk to someone who's a fiduciary or a independent insurance agent who specializes only in these insurance based products. There is a balance between safe money products and market based products- just need to determine what your purpose of the money is..
There are absolutely fees in FIA's. Who is teaching you?
Is fixed index annuities something while life agents sell as their “ investment product”?? Last time I checked you just need to be life licensed right to sell that.?? Or am i wrong?
You do need a life license to sell an annuity but that doesn’t make them bad products.
You do not need any investment licenses to sell annuities, which is why they are bad products. An insurance license can be studied for an obtained in a day. A 65 takes weeks and weeks of study.
@@thepianist7084 you don’t know what you are talking about. Fixed index annuities aren’t bad. They are great products especially for people who are comfortable with the amount of money they already have saved and do not want to lose that amount while still having the opportunity to earn more. Better then putting their money at risk in the market especially if they have a good amount.
@@thepianist7084 You are partially correct. A FIA is an insurance product. you need a life insurance license to sell. A Variable annuity is a security that requires you to be registered and pass the Series 6 and Series 63 or 66. How long it takes to get a license has zero bearing on how appropriate the product is. Financial products are tools, thats all. Neither good or bad unless used for the wrong reason or wrong job.
No fees and the client does not pay commission. Ramsey is wrong.....again!
Why would you get a fix index annuity WITHOUT a LIFETIME INCOME!? That would be crazy. So you only get a fix income for 10 years
He doesn’t like what he doesn’t sell! He makes money on his mutual fund advisors
Mutual funds not only have fees but commissions.
He has opinions but no license to help you.
Dave, you are wrong and double wrong! The Fixed Index Annuity floor is not -5% or anything close to that. Fixed Index Annuities have a floor of zero, meaning your money never participates in the down market. Also many Fixed Index Annuities have very low and some even have no fees at all! Also the commission that is paid to the agent does not come out of your account, unlike your program where the fees paid to your advisor come directly from your own account. By the way your advisor gets paid irregardless if you make money or you lose money. This is the problem with taking advice from someone who is not properly licensed, trained and certified to sell Fixed Index Annuities. If you are stressed about losing money, reach out to a Licensed Insurance Professional to get the entire story.
Well said
Exactly! How is he able to get on a show and spit complete inaccuracies? This is insane!
Yes! We agents are here to help! I’m in Texas do if you need help reach out
Are all annuities bad? I just entered my first tax course in college. Thanks
No- It's a deep discussion. Annuities are like tools. Always use the best tool for the job you are doing. Annuities are exceptional and unrivaled for creating stable, guaranteed lifetime income in retirement. For example, a 77 year old male can buy a SPIA with a lifetime guarantee and 5 years that pays 10% cashflow for life. Find a stock or mutual fund that can do that. There are pros and cons to using annuities just like there are pros and cons to putting your money in the market just because the pie-chart allocation looks good.
FIA's can be used to accumulate more interest than CD's or other guaranteed investments if principle protection is important to you. Variable annuities now offer buffers with 20-40% downside protection, high caps, and no explicit fees.
FIA's are an insurance product. They are not priced to outperform VA's or even a good basket of individual stocks. Variable annuities (VA) are a security that requires registration and a license to sell. Get a book. Their is a lot to learn.
Most. The only good ones are SPIA or DIA from an A++ rated insurer.
@@brocklanders6969and MYGAs
@@brocklanders6969 Okay. What's the worst thing you can thing of about an index annuity?
Ramsey is 100% wrong, no fees with Index Annuities with most carriers. I write for the major insurance carriers that offer annuities. They do not charge a fee.
Annuity and fees was so wrong... And then we recommend Mutal funds which is one of the most expensive financial products over time... Interesting
Wrong information from Dave once again
Dave misses the point of the question, A FIXED indexed annuity and not a Variable annuity. While V.A have high fees, a good fixed indexed annuity does not. Cmon Dave. He also doesn't talk about the guaranteed lifetime income available in the FIA. That is not ever gonna happen with a mutual fund.
Dave’s reps will make a killing on investors. Dave’s first sentence about indexed annuities was wrong. Dave is not accurate. Dave lies. The up front commission on an indexed annuity is 6%. If one of his reps keeps your money for 6 years, his fees pay him more than the indexed annuity commission. Dave makes money selling leads! He has no clue about annuities. You should take a risk test. Some of your money will probably go into an indexed annuity with guaranteed lifetime income and some money should be invested in the market. You should only work with a broker that can invest in both strategies.
maybe you should be a little angrier...that always helps get your point across
What is annuity? : a scam. Way too many other things to put your money in.
He's not getting the whole 2m fees are going to be over 1m including fed , st , taxes . He maybe clear 900k .
He sounds like that guy.
The guy that created the 401K believes you should put your money into a fixed indexed annuity. His name is Ted Benna
Oh my gosh. The misinformation Dave puts out there. He has no idea how FIA actually works and fees, commissions etc. ZERO. Why doesn’t he have open conversation with someone that actually handles these types of vehicles? Also… consumers. You have every right to ask the company or professional you work with exactly how much they will make and where that commission comes from.
Because you would be passive aggressive. -DR
Realtors make 6% on every deal in general. Why is that bad for an insurance agent. That ends up being less over the same holding period as a mutual fund. Ken Fisher hates annuities because he is getting 1.25% fee on your entire portfolio every year for as long as you work with him. Is that a good deal anyone? 10x1.25 is 12.5%. Remember that is on a growing account if he is successful. The agent makes a one time fee or takes a trail on the beginning amount. Fees generally always cost more in the long run.
@@rbscott21 I'm only paying 0.12% and averaging 7%.
Oh wow, sooo wrong! Dave really showed that he doesn’t know as much as he thinks he does.
He only needs a rudimentary knowledge. He is an advertising executive!
Dave,
Fixed, indexed and index linked annuities (structured annuities) have 0 fees. Variable annuities come with fees and are expensive. Please speak to one of your smartvestor pros and confirm these facts. FYI
It is possible to buy a lifetime income rider and pay from .90 to 1.3% in fees. Most fixed and indexed annuities have no fees. I sell guaranteed lifetime income annuities with no fees. Like all investments, get everything in writing.
FIAs have fees Bukit into the product.....
@@michaelmahoney1829 That may be correct. However, they provide protection/insurance in exchange of the expense. They can limit your downside and even guarantee the principal in some situatuons. Before you consider the price, one should consider the value of their purchase. The cheapest option may not fulfill your objective. Thereby, ultimately resulting in an expensive error. Determine your objective first. Then you can select the product. Remember, you get what you pay for.
@@freddytelleria3550 Whoa yeah .....you must sell them. Many ways to do all this without FIAs
@@freddytelleria3550 not true. all FIA's are different. Some have strategy charges when the carrier is using par rates in the contract (a fee).. some of have caps (built in fee)
There are some indexed annuities that have ZERO fees. Dave please do your homework before you give your financial entertainment to people
He knows it he lies , because he’s contracted with some financial advisor they just sell term life and mutual funds,
Dave is simply wrong in so many ways here. There are Fix Index Annuities with $0 Fee's and plenty of them. On the commissions portion if you put $500,000 in a Mutual Fund vs Annuities the advisor with Mutual Funds will earn double in commissions than the insurance agent. I guess the only thing that counts for Dave is people who work for free. I guess in his mind all other advisors that work with Variable products are not doing it to earn a commission. Prejudice!
Sorry Dave, your are so wrong. FIAs have no fee
Who is teaching you this? You are incorrect.
You would get more views without all of the long drawn phone interview to explain what a Fixed Indexed Annuity is.
So inaccurate. So many things to like about Dave Ramsey but the intentional ignorance of annuities and life insurance is unforgivable at this point. He has been around long enough to know better if he wanted to or wasn't so interested in making money by selling leads to advisors and brokers who make fees on your account value yearly, even when you are losing money. So sad that he can't be honest or learn the facts. I hope it is just ignorance but hard to believe it is at this point.
He's an advertising executive. He sells advertising and endorsements and he's exceptionally great at it. Need I say more?
LOL @ all of the annuity shills flocking to the video's title.
We all have to shelf or something. Who and what do you show for?
@@peterponcedeleon3368 To prevent scam artists from ripping people off.
@@kgm2182 people are losing their rear ends in mutual funds right now. Google the last decade. You tell me which ones to scam. Now go learn a thing or two about a thing or two.
@@peterponcedeleon3368 LOL. Of all things you give a soundbite from an insurance commercial.
@@kgm2182 The fact is, people are willing to pay for guarantees and mutual funds don’t have any. It’s that simple. Off to my nap. 😎
This is strawman. Dave makes up a definition of how a Fixed Indexed Annuity works and then tears it down.
Very interesting, I don't specifically like this clip because he doesn't give an exact solution. There was no intended goal in mind in the conversation, this is why I don't like Dave Ramsey. That's my opinion, you can disagree if you'd like.
So-called financial planners are of the devil 😈.
LOL - Dave literally described a product that does not exist. A 5% Floor? 4 times fees? He literally has no clue what he is talking about and is arrogant and dangerous. The top fixed indexed annuities have no fees. And the Mutual Fund guy makes an average 1% per YEAR in fees when the annuity guy makes 6% ONE time. Dave needs to stick with helping people get out of debt.
Such bad advice. Imagine being retired and riding the wave of a mutual fund. People forgot 2008 quickly.
🤦🏻♂️🤦🏻♂️🤦🏻♂️🤦🏻♂️🤦🏻♂️🤦🏻♂️🤦🏻♂️ Ramsey you’re not a licensed insurance agent. Stop it
The fees and the commission are the killer. Reverse mortgages also had or have high fees.The salesman does'nt want to clarify, he just wants to close the deal.
The commission doesn’t come out of the money you put in the annuity. The company pays the agent and the only way you lose money is if you pull the money out before the contracts up which you would have surrender charges for early withdrawal. My dad had an annuity and he made decent money with it.
@@saundrawright5097 did it beat the market?
An indexed annuity is not designed to beat the market. It is designed to provide downside protection. If you want to beat the market, you also need to expose your funds to potential loss. In other words, when the market goes down like 2000-2009; yes the indexed annuity would beat the market. However, when the market is rising; like 2009 to 2021 the market would beat the indexed annuity.
@@superblump87 If you want to cherry pick years, go ahead. I can show you stretches when indexed annuities far outperformed the market. For instance from 2000to 2010.
@@freddytelleria3550 Sorry Freddy. I didn't read your reply before writing mine.
😂😂😂Dave is so wrong. My goodness Dave is ruining people’s retirement.
this is wrong
Horrible advice
Sad
Dave hates whole life like his wife had a long secret affair with It smh
You don't understand annuities. No cost, safety of principle and interest . Annuity is great investment tool together with security, MF and other. You need to do planning for Retirement. You sell MF.
Neither do you. There are always expenses built in to the FIA product called caps, spreads, margins or participation rates. ALWAYS
What Dave so conveniently forgot to mention is the reason the commission is higher because this is much safer than mutual funds. You are guaranteed a certain rate of return unlike mutual funds. Tell the FULL story Dave. SMFH!
There NOT guaranteed YOU tell the truth lol
He also fails to mention that the fee doesn't come out of the client's pocket The company pays the commission. Nor does he mention that brokers get paid over and over again on the same money and it comes directly out of the clients pocket. Notice that
he doesn't argue against the merits of an indexed annuity because he can't.
Not the reason. The commission works out to about .6-.8% annually over the holding period. Safety has nothing to do with it. If an agent does not get paid well by one company, they will find a product to sell that pays better. That's the problem with working with a non fiduciary. They are inclined to sell you what's in their best interest -not yours.
Wow.. I just got dumber listening to dave here. I hope people here arent taking him serious.
By the way fixed index annuity has no fee , zero, Dave is evil
If you get a commission, then there is a fee.
Yup it's all smoke and mirrors. @@brocklanders6969
LIES!!!! This guy is saying anything!!
Wow…. Dave seriously has gone downhill. Dude straight up giving bad information.
There are plenty of structured index annuities with zero fees! Yes the adviser who sells them makes a commission but the commission does not come off of your principal. The company’s make money from a surrender charge if you were to cash it in within the first 6-7 years… obviously if you know you are going to need to money in a couple years, you would want to keep some money in more liquid assets like mutual funds, and stocks. Dave’s misinformation is just terrible. Do better Dave, you are not a financial advisor
That is not the only way they make money. there are internal fees built in to every product. Who is teaching you this?
@@rbscott21 do you have proof of these internal fees??? I have clients in these. There has never been a fee deducted from there principal! Account value is based on index change. The only way a fee is charged is if the client exceeds the 10% free withdrawal amount during the first 6-7 years.
@@kawi4ev Did you get a Commission? That is a fee.
dont do it, its scam like reverse mortgages. dont make it complicated, you did well. just leave it in tsp and take a 5% draw and you'll be fine.
The Wall Street Journal says a 5% distribution is too much. Are you going to compensate this person when he runs out of money? Equity Indexed annuities have no fees, the insurance company guarantees lifetime income, and the payout is more than 5% (Age determines payout). Unlike old annuities, the owner retained ownership of the assets. My firm sets these plans up daily. We still retain a percentage of assets in the market.
@@chrisgann3956 lol Oh... you're a salesman! you barking up the wrong tree buddy. I know how to use a calculator. I don't need to listen to some broke wall street journalist. how can you pay out more than what the average is paying, that's basic accounting. The only thing that's better is real estate which pays a little better for the headache. The hard facts are, reverse mortgages are a scam. It's just another corporate product to steal hard working people's money.
Sequence Risk is real for withdrawals. I am retired with fed pension, but the G Fund is not a true stable value although it does have a very unique hedge by loaning over night to banks that need to meet the reserve requirement. And if Earl really has $1.8M in the G Fund, he can afford a proper FIA to get CD returns as well as other safe investments vetted by his CPA, his Tax Attorney, etc. wealth management when the rest of us worry about money management and expenses. It's strange to me that Earl would be Dave's target audience.
@@edmundfong7288 It is important to understand that growing your money requires an understanding of arithmetic and average returns. Retirement and spend down require an understanding of geometry and sequence of returns. there is a lot of PhD level research on how to build a bulletproof retirement. A true fiduciary will generally use annuities for income solutions and market based investments for growth. It depends on the amount of money available and every plan must be custom made based on risk tolerance and a number of other factors too many to list. Make sure your advisor has access to planning software, not just asset allocation software with an assumed rate of return.
Dave is a complete Liar
This dude is a complete freaking liar
He sounds like that guy.
He sounds like that guy.