Have you read the newspaper ads for annuities that promise 8-10% guaranteed returns each year? Can this really be true?

Join Julia Lembcke, CERTIFIED FINANCIAL PLANNER™ and Managing Director of URS Advisory, as she uncovers how fixed indexed annuities really work- the good, the bad, and the ugly.

0:00- Introduction
1:00- The Two Separate Account Values of FIAs
2:00- Explaining the Phantom Account Value/Income Rider Base
3:40- FIAs with Income Riders for Pension Rollovers
3:58- FIA Terms to Avoid
4:32- Pros and Cons of FIAs for Guaranteed Income
4:53- FIAs for Safe Growth
5:29- Example of the Spread Strategy
5:58- Example of the Cap Strategy
6:25- Example of the Participation Rate Strategy
6:43- My Favorite Strategy- The Performance Trigger
7:56- The Pros to a Good FIA
8:38- Tips for Investing in an FIA
9:55- Conclusion and final thoughts

Check out all of my videos on annuities!
1) My FAVORITE Fixed Annuity-

2) All About Annuities-

Contact us now at (561) 594-0100 or Schedule a Free Conversation with Julia Lembcke today.

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Opinions expressed herein are solely those of URS Advisory. All written content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Material presented is believed to be from reliable sources; however, we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your financial adviser or qualified professional before making any financial decisions.

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LEARN MORE ABOUT: Retirement Annuities

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When it comes to securing your financial future, guaranteed annuity rates can seem like an attractive option. However, Certified Financial Planners (CFP®) caution against blindly investing in products that promise unrealistically high returns. In this article, we explore why CFP® professionals are wary of annuity products offering 8-10% guaranteed rates and why you should proceed with caution.

First and foremost, it is important to understand that annuity rates are determined by a variety of factors, including interest rates, market conditions, and the financial strength of the insurance company issuing the annuity. In today’s low-interest-rate environment, a guaranteed rate of 8-10% is simply unsustainable for most insurers. Companies would struggle to cover the promised returns without taking on excessive risks, potentially putting policyholders’ funds in jeopardy.

Furthermore, annuities offering such high guaranteed rates often come with significant restrictions and fees that can eat into your returns. Surrender charges, administrative fees, and early withdrawal penalties can quickly erode any gains you may have made, leaving you with less money than you initially invested.

In addition, high guaranteed rates may also be a red flag for potential fraudulent schemes. Scam artists often use the promise of unrealistically high returns to lure in unsuspecting investors, only to disappear with their money once the scheme collapses. To protect yourself from falling victim to such scams, it is crucial to thoroughly research the insurance company issuing the annuity and seek advice from a qualified financial professional before making any investment decisions.

Instead of chasing after high guaranteed rates, CFP® professionals recommend focusing on building a diversified investment portfolio that suits your individual financial goals and risk tolerance. By spreading your investments across a variety of asset classes, you can reduce the impact of market volatility and potentially achieve more stable, long-term returns.

In conclusion, while the allure of 8-10% guaranteed annuity rates may be tempting, it is important to exercise caution and approach such products with a healthy dose of skepticism. By consulting with a CFP® professional and conducting thorough due diligence, you can make informed decisions about your financial future and avoid potential pitfalls associated with high-risk investments. Remember, slow and steady wins the race when it comes to building wealth and securing your financial well-being.