Fidelity Annuity Recommendations

Episode 122 January 26, 2024 00:10:57
Fidelity Annuity Recommendations
Annuity Straight Talk
Fidelity Annuity Recommendations

Jan 26 2024 | 00:10:57


Show Notes

00:00 Fidelity Annuity Recommendation

01:11 Fidelity and other major investment firms are now recommending annuities as part of their investment strategies.

03:04 It's important to shop around for annuities even if Fidelity is recommended, as there can be significant cost savings by comparing quotes from different companies.

06:56 Independent annuity advisors like the speaker can often provide better deals and savings compared to Fidelity's recommendations, with a potential cost difference of up to 16% or more.

09:14 Different annuity contracts have varying terms and benefits, and it's essential to consider the specific features and needs of your situation when making a decision.


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Episode Transcript

[00:00:00] Hello and welcome everyone, to the annuity Straight Talk podcast, episode number 122. [00:00:07] Brian Anderson here in western Montana, founder and creator of You want to chat with me, help me, or ask me to help you solve your retirement concerns? Clear up some information you're getting about annuities. That's what I'm here for. Top right corner of any page on annuity straight Schedule a call, get a hold of me. I'm here. Would appreciate it if you guys share it with your friends. I got a lot of people that are doing that. You know somebody else who's having trouble with the same thing or might appreciate the information, send it off. Give it a thumbs up on YouTube or on your favorite podcast platform. We're here to help people out. So this time, going back to throwback from two weeks ago, episode 120. [00:00:49] Major investment firms now recommending annuities. [00:00:53] Why don't I share my screen? The newsletter on this one is really short and brief because it's just some quick numbers, and I don't think it's going to take me a whole lot of time to explain all this. I said in the podcast a couple of weeks ago how companies like Fidelity are leading with an annuity recommendation in some cases. I heard from a lot of people. I heard from one lady, oh, they told me to do this and I went for it. Maybe I should have looked around. No, don't beat yourself up. I guess I'll get to that in a little bit. And there's another guy that said, I've been there for years. They never once mentioned it. [00:01:27] Well, they already got your money. They're probably not going to go around changing things. And the situations where I've heard it is when they're competing for certain managed portfolios in certain areas of business. I don't know what their mode of operation is. I don't know exactly how they do all of this. I'm just saying it's something that I've heard in certain cases, so you're more likely to hear it from other areas, which is the point of it. So I don't want anyone to misunderstand me and hope no one didn't. [00:02:00] I think it's a good thing that they're doing it. They've always had access to it. [00:02:05] Again, like I said, it's only been used kind of as a last resort. Higher rates make the benefits more obvious. The fundamentals there, regardless of interest rates, it makes things a lot easier. But essentially, I applaud Fidelity's willingness to include insurance products where applicable, rather than just doing as a way to keep money from leaving their management. So another guy, so I guess I talked to you about the first guy that I heard of. It was a couple of weeks ago. This is a different one. I actually do have another case study, which is not, and I'm not trying to pick on Fidelity, which is a big company. [00:02:39] And so it's just really interesting to see a second guy. I talked to a couple, they were at Fidelity and kind of deciding to try to, hey, we want to set some money aside for an annuity, get some guaranteed income in a few years. [00:02:55] And they did some research. They came to me, they got their quotes from Fidelity, all that stuff. And so what I was going to do is I'm going to share those quotes redacted of personal information, not going to go into the details of this couple and their financial situation, but typically, we can beat the quotes from Fidelity. Not always. [00:03:13] And the idea is just shop around to see if there's a material difference. Now, if you've got a great relationship with a guy you work with at Fidelity, sometimes it's worth a little bit extra money to keep that relationship intact. I do not. I always say that when people come and say, well, what do you think of this annuity? The biggest thing is, well, what do you think of the guy that showed it to you, the person that is telling you to buy it? Oh, we're best friends. We worked together for 30 years. He's never steered me wrong. I'm not going to try to get into a competitive situation just so you can save a few bucks. Maybe it's not worth that great relationship you have. [00:03:47] So again, just trying to clear it up so everybody can move forward with confidence. You put your own emphasis on what's most important to you. If it's a relationship, that's perfectly fine, and I would support you in that 100%. So a couple of things I'm going to explain. First, immediate income annuities pay within one year. Income payments within a year. Deferred income lets you delay the income for several years. So every year you get more. The longer you wait, the more you get. Kind of like Social Security. Just like it. Actually, fidelity is typically going to be more competitive in immediate income situations. Their limited selection, again, it's a boardroom decision. So it's not like they're broker. Go out and get anything. [00:04:25] It's got to be approved. It's like big companies red tape, all that stuff. When it comes to deferred income, they're typically not as competitive. [00:04:34] And this was a case of deferred income. [00:04:37] One thing you can guarantee when you're going through fidelity, they're going to use a really good company. So it's going to be a New York life, big mutual company. An insurance heavyweight, really. So the case I'm talking to you about today, it's a deferred income deal. A couple in their early 60s set aside some money to generate income in four to five years. I shopped the market and came up with the best product in very short order. [00:05:01] They were simply trying to do good, easy baseline income on top of Social Security. It was not a crazy technical planning situation with these guys. We'll get into some of those things with their other wants, needs in retirement as time progresses. This was the easiest thing to do with rates being really good. Hey, set aside some money. We want 1500 to 2000 a month. [00:05:22] That's where it's like, you guys know, I like the company. Midland, Nashville, they were actually top of the heat for this couple, and they could do it for $196,000. So because it's good due diligence, he said, well, let me hear the fidelity guys out and see what they come up with. Absolutely. [00:05:40] If I miss something, it keeps me sharp and makes sure they get the best deal. [00:05:45] Go for it. Get as many quotes as you want. So they had two recommendations. One from Guardian Life, one from Integrity life. Both are excellent companies. I started my career as a guardian. I'll always love the company if they're ever at the top. [00:05:59] Absolutely no hesitation on my part. Doesn't happen very often, but they are competitive in some very specific situations. I've used integrity life, western and southern financial group income cases in the past, some other deferred contracts as well. But I guess I'm explaining to say my search for the best deal included both of those companies. I already knew that they weren't in the ballpark. [00:06:25] So when I say I could get the $1,500 a month for 196,000, either of the two companies, I think Guardian was 233,000 and change. [00:06:35] Integrity was 232,000 and change. [00:06:39] We were able to go to Midland and save the couple over around $37,000. It's not a small difference. It's about a 16% cost savings, $37,000. You get up to a million, then you're talking close to 150 grand. So it's a big deal. Big difference, right. And for anybody that's maybe retiring with just enough assets to make it work, that will make a big difference. Save 16% on the cost of the guaranteed income. Still get an a plus company. It's an easy decision. So that's kind of the newsletter. So this is often, but will not always be the case. I can usually beat the income quotes from Fidelity and I can sell any of the products they use anyway. But again, it goes down to that relationship simplicity. If they're managing your money, they got a good deal. It's very competitive and you want to keep it one spot. I'm not going to fault you for that. I'm not saying everybody's got to do business here, but saving money on retirement income should be important to everyone. [00:07:43] At the very least, shop around a little bit. Even if all you do is confirm that you have already have the best option. [00:07:50] So say you do that and well, I'll be damned. Fidelity gave me the best quote. Maybe they do. [00:07:57] At the very least you'll be able to make that commitment with a lot more confidence. Right. So detail and podcast. I'm just going to show you real quick. For anybody watching the video, here's the Midland national annuity. Now this is an interesting product in that the annual increases step up on the birthday. So where they had a four year deferral on the quote from the other company. This shows it on the table. It's five. That's because the younger person in this couple has a birthday that's just another month or two after the anniversary. So it looks like after the fifth year, but it's actually after four years and two months or something like that. They decided after doing this. So I had to do the math. 225,000 creates 21,308 of income. So I just do a quick little bit of math. [00:08:47] That's what I do. Basically divide the annual income payout, 18,000 divided by 21,308. Multiply that by the 233 232, and you get 196,000 for the payout. Okay. [00:09:06] Now these contracts work a little. They're fair bit different. Now this is a residual value contract. It's an index annuity. The bottom line is it's the most income. And then I pulled out integrity life. I redacted personal information. [00:09:20] You can see that the income payment, 1500 a month, that's 18,000 a year. We started this process in December. So the quote was for December 11 purchase January 21 of 2028. So about four years in one month, actually. So 1500 a month cost 232 40. One we were able for 225, able to get instead of this is 18,000 a year. For 225 is going to get 21,300 a year. Pretty simple, pretty easy. Now, again, this is a very different type of contract. We're looking at the bottom line. There's some other benefits in the other contract that they might like. It's IRa money, so it doesn't make a difference for taxation, all those things. Anyhow, that's how we beat the contract. That's a fidelity investments annuity recommendation. Pretty straightforward, pretty simple and easy. This has been episode number 122. Shop around. Want to make sure you get the best deal and the best advice, the best strategies. You want to talk about this for your situation? [00:10:25] Schedule an appointment. Top right corner of any page on says schedule a call. Share this with your friends like subscribe or comment? Reply to the email when this goes out to the newsletter, I'd be happy to assist you want to clear things up. If you have any comments or if you got a bone to pick, let me know. Reach out. So appreciate you guys joining me. Quick and easy. One for you. I'm looking forward to next week. I'll see you back here for episode 123. You guys have a great day. Okay, thanks. Bye.

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