Give the Right Money the Right Job
As you get closer to retirement, not every dollar needs to do the same thing. Some money needs to stay available, some may need long-term growth, and some may need protection or dependable income.
Fixed annuities can be useful for that last part—but only when they fit what you're trying to accomplish.
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You Don't Need to Know Which Product You Need
Most people don't call me because they've decided they need an annuity. They have money somewhere and they're trying to figure out what to do with it.
I Want More Predictability
You may have money in savings, CDs, money markets, or somewhere else that's meant to stay relatively safe. You'd like it working harder, but you don't necessarily want to take more market risk with this portion of your money.
I Already Own an Annuity
Maybe you're not sure how it's performing, don't completely understand what you bought, or someone is recommending that you replace it. Before changing anything, let's figure out what you actually have.
I Have Retirement Money I Need to Make a Decision About
Maybe it's an old 401(k), an IRA, an inherited IRA, or money you've accumulated over the years. You know you need to make a decision—you just aren't sure what the right decision is yet.
That's where I think the conversation should start. Not with a product. Start with what you have, what you need the money to do, and then decide which options are worth considering.
Not Every Dollar Needs to Do the Same Thing
Retirement doesn't have to be a choice between keeping everything in the market or moving everything somewhere “safe.”
Some money needs to be easy to reach. Some may need long-term growth. And as you get closer to retirement, you may want a portion protected from market losses or creating income you can count on.
Decide what job the money needs to do before choosing the product.
Keep Some Available
Money you may need soon should be easy to get to.
Let Some Grow
Money you won't need for years may have more time to grow.
Protect Some
You may want some money where a market drop won't reduce its value.
Turn Some Into Income
Some money may eventually need to become income you can count on.
An Annuity Is a Tool.
The Job Comes First.
Fixed annuities can be useful when part of your money needs more predictability, protection, or dependable income. The right type depends on the job you're asking it to do.
Lock In a Known Return
Some annuities give you a guaranteed interest rate for a set number of years. The rate matters, but so do the length of the commitment and how much access you'll have if your plans change.
Protect the Principal While Leaving Room for Interest
Other fixed annuities can earn interest based partly on a market index without putting your money directly into the market. I care less about an impressive illustration and more about what the contract can actually earn, how long your money is committed, and what you're giving up for the protection.
Create Income You Can't Outlive
An annuity can also turn a portion of your savings into income designed to last for the rest of your life—or both spouses' lives. The important questions are how much income you get, what's guaranteed, how much access you keep, and what happens when you die.
You don't need to memorize the different types of annuities. Tell me what you're trying to accomplish. I'll explain the options and help you compare what actually matters.
A Good Rate Doesn't Automatically Make It a Good Annuity
Rates matter. So do guarantees and income numbers. But none of those numbers tells you whether the contract actually fits what you need.
I want to understand the whole deal—not just the number that looks best on the brochure.
What Are You Actually Getting?
Look at the actual rate, guarantees, or income—not just the biggest number in the presentation.
How Long Is Your Money Committed?
A good rate can look a lot different when you consider how long you're agreeing to keep the money there.
How Much Can You Access?
Know how much you can take out, when you can take it, and what it could cost if you need more.
Who Is Making the Promise?
The guarantees come from the insurance company issuing the contract, so the company's financial strength and reputation matter too.
I'm not looking for the annuity with the best-looking number. I'm looking at what you're getting, what you're giving up, and whether the trade makes sense for what you need the money to do.
Understand What You Have
Start with the contract you already own—what it does, what it guarantees, and how it works today.
Understand What You Could Lose by Changing It
Older contracts may have guarantees or benefits that disappear once you move the money.
Decide Whether Something Else Is Actually Better
A replacement should solve a real problem—not just look better in a presentation.
Don't Replace Something Until You Understand What You're Giving Up
Sometimes people come to me because they don't really understand an annuity they bought years ago. Other times, someone is recommending they replace it with something new.
Newer doesn't automatically mean better. An older contract may have guarantees or benefits you can't get anymore, and moving the money may come with a cost. There are also times when the old contract simply isn't doing what you need it to do.
Before I recommend changing anything, I want to understand what you already have and compare it with what you're being asked to move into.
Sometimes the Goal Isn't More Growth. It's More Income.
A couple I worked with had sold a property and wanted to use part of the proceeds to create income they could count on for the rest of their lives.
A Couple in Their Mid-70s With $140,000 to Put to Work
Goal
Create dependable income for both spouses.
Money available
$140,000 from the sale of a property.
Priority
Income they couldn't outlive.
We Gave This Portion of Their Money a Different Job
They weren't trying to get the most growth possible from this $140,000. They wanted this part of their money to provide dependable retirement income.
We used an annuity designed to provide income for both of their lives. The contract they selected provided about $1,090 per month in lifetime income.
Designed to continue for as long as either spouse was living.
This isn't an example of why everyone should buy an annuity. It's an example of matching the tool to the job. They wanted dependable lifetime income, and that's what this portion of their money was used to provide.
This is an actual client example with identifying details omitted. Annuity benefits and income amounts vary by age, product, company, contract terms, and the options selected. This example is not a promise of what another person would receive.
Start With the Money. Then Look at the Options.
You don't need to know which annuity you want—or whether you need one at all. We'll start with what you're trying to accomplish and work from there.
Tell Me What You're Trying to Do
We'll talk about the money you're considering, when you may need it, what else you have, and what you want this money to do.
We'll Look at the Choices
If a fixed annuity makes sense to consider, I'll compare the options that fit the job. If you already own an annuity, we'll start with what you have.
You Decide What Makes Sense
I'll explain what you're getting, what you're giving up, and anything I think you should know. Then you can decide whether it makes sense for you.
No pressure to move money just because we talked. The first job is making sure you understand your choices.
Questions People Ask Me About Annuities
Annuities aren't complicated because people aren't smart enough to understand them. They're complicated because the industry often does a poor job explaining them. Here are some of the questions I hear most often.
Are annuities safe?
Fixed annuities are designed to protect your money from stock-market losses, but the guarantees are only as strong as the insurance company making them.
That's different from saying an annuity has no risk. Your access to the money may be limited for a period of time, and annuities are not FDIC-insured bank accounts. I look at the company behind the contract along with the rate, guarantees, and access to your money.
Can I take money out of an annuity if I need it?
Usually, yes—but you need to know the rules before you put the money in.
Most fixed annuities let you withdraw some money without a charge, but taking more than the contract allows during the early years can cost you. That's one reason I don't like putting money into an annuity that you may need to live on or access unexpectedly.
Is an annuity better than a CD?
Sometimes, but not always.
Both can provide a predictable return without putting your money directly into the stock market, but they work differently.
CDs are bank products and generally have FDIC protection within applicable limits. Annuities are insurance contracts and may offer different rates, time periods, tax treatment, access to money, or income options.
The better choice depends on what you're trying to accomplish.
Do I have to put all of my retirement money into an annuity?
No—and in most situations, I wouldn't want an annuity trying to do every job.
You may need money that's easy to reach, money positioned for longer-term growth, and money you want protected or eventually turned into dependable income. An annuity may make sense for a portion of your money when its job matches what the annuity does well.
What can I do with an old 401(k) or IRA?
You may have several choices, and an annuity is only one of them.
Depending on the account and your situation, you may be able to leave the money where it is, move it to another retirement account, or use some or all of it another way. I can help you evaluate fixed-annuity options when they fit, but I'm not securities licensed and don't manage investments.
I inherited an IRA. Can I put it into an annuity?
Possibly, but don't move an inherited IRA until you understand the rules that apply to it.
Inherited retirement accounts have special rules, and those rules can differ depending on who you inherited the account from and your relationship to that person. We first need to understand what you inherited and how it's currently set up before deciding whether an annuity belongs in the conversation.
Should I replace an annuity I already own?
Not until you understand exactly what you have and exactly what you would be giving up.
A newer annuity isn't automatically better. Your existing contract may have guarantees, income benefits, or other features that can't be replaced. It may also have charges for moving the money now.
I'll compare what you own with what's being proposed before recommending that you change anything.
You Don't Need to Know the Answer Before You Call
If you're deciding what to do with retirement money, reviewing an annuity you already own, or wondering whether a fixed annuity makes sense for part of your money, tell me what you have and what you're trying to accomplish. I'll help you understand the options and tradeoffs in plain English.
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