What Is An Annuity And How Does It Work?
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LEARN MORE ABOUT: Retirement Annuities
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If a parent has already started to collect their monthly pension are they able to change it to a lump sum payment?
I own my house …no mortgage…my intent is to leave inheritance for my child's children.. recommendations welcome. I was contemplating annuity for myself. for later on if I ever decide to retire. ..
Lol when he put his head in his hands I started laughing.. can you imagine the flow of language coming out of his head?? Hahaha
It's amazing he spends the time on his show giving financial advice, then at the end of the show disclaims he is giving financial advice. He holds no license to be giving financial advise. He doesn't understand insurance, or annuities and gets them wrong when discussing these financial instruments.
Either people are lying or they do not know the literature. Annuities are clearly shown to be inferior investments and prey on a client’s worries. The fees people were being charged are criminal now that brokers must also be a fiduciary.
Dave’s body language when she mentions annuities, is priceless.
Not all annuities are built the same. Most allow for a percentage withdraw each year without penalty. You made it sound like all annuity contracts have a 7 year surrender period. FALSE!!
Dispensing advice to the masses is dangerous at best. Go talk to a reputable advisor that knows your situation and can make sound recommendations based on that.
403b administrators are not fiduciaries, unlike 401k administrators. That is the core reason 403b programs are full of junk.
If you lose 10% one year and gain 10% the next you do not break even Dave
Volatility is the price of outperformance
THX
Thanks Youtube for showing this to me, the first time I considered annuities 🙂 Thanks Dave.
It's hilarious when Dave gets so mad.
Since she is the one that called them panicking. Maybe this brought this into action
She can't control her emotions, she is her worst enemy. Financially speaking.
This is the worst advice I’ve ever heard!
It's sad how Dave continues to speak on products he does not really understand but plays the part for his listener's. Stay in your lane Dave, and stick with the baby steps program as that and your marketing team is what got you to where you are.
Annuities are great options if they are suitable for the investor.
Surrender charges only occur if you take the money out early. If she doesn’t need this money before she retires, the surrender charges don’t come into play.
Annuities are great for people who want to contribute above the IRA contribution amounts, and are not worried about liquidity.
If this woman was worried about volatility, she should have been put in funds with more bonds in them.
My investment advisor is pushing annuities also. I asked her "when do I get my principle back?" and the answer was just too squishy for me. She's pretty much fired at this point.
you are deceptive. you know for sure there are indexed annuities that protect principal and you ignore it. very deceptive.
This guy is a clown
I love Dave.
A good adviser finds out the age, risk tolerance, debts, details on annuity and how much longer client is planning to work b4 they tell a client pay 10% penalty because mutual funds are paying 12%. Well mutual funds could pay 12% but they could also lose 30% that is why you need more information from caller.
But wait, she lost 20k in her mutual funds… eh, no biggie right Dave?
Please advise. I am a 73 year old bachelor who recently inherited 300K. I live in a care facility and am in good health. I have no other assets other then social security. What is the best annuity for me assuming I want the maximum monthly payout with no legacy inheritance. Thanks
I dislike annuities as much as Dave does, but he is giving such a poor description of what they are in the second half of the video. An annuity is simply a series of payments made at equal intervals. The payout period can be for a fixed term or based on the life of a natural person. Later, a second class of annuities was created, called a deferred annuity, which allowed for an accumulation/growth phase to occur prior to annuitization. Then deferred annuities were segregated into fixed products and variable products, with some products allowing additional deposits during the accumulation phase.
Also, he did a poor job addressing the caller. It was pretty clear to me that she has a 403b with TIAA CREF, and that she was advised to allocate a portion of her account balance into the TIAA Traditional subaccount, which pays a fixed rate and cannot lose value. TIAA Traditional has a liquidity provision that exiting must be done over a period of no less than 10 years (which is why she correctly mentioned this).
The TIAA Traditional product is a uniquely wonderful product as a component of the bond portion of an investor's portfolio.
If people think we're going to make it to retirement you haven't really been paying attention have you? Cash out buy can food and shotgun shells. It will be the new currency
Meanwhile I had clients get the following interest rates this year:
36%, 31%, 25%, 18%
Dave, how do these rates compare to the bond rates that brokers put ppl in? You know.. like a 70/30 split in their investment portfolio.
Annuities are sold by insurance companies. You’re correct. Tell me a more regulated industry out there. The client will never have a negative return.
Dave’s advice: cancel the annuity and put it in a mutual fund and get 10% lol
OR lose 10, 20, or 30% for example.
He said her annuity was paying a low rate of return. How in the world does he know that?
Tanya, you didn't make a big mistake. You have $500k of retirement. You don't need to touch the money. I have something similar that a Ramsey sponsored advisor got me. Five years ago I put $82k in an annuity. It's now valued at $189k, that's a return of 19%. Dave is famous startling people. At the core he's good, but there are moments he's just blind. This is one of them.
Imo, there is a lot of misinformation or lack of information in this short clip. I don't agree this was a wise investment decision, however, there are typically no fees on fixed annuities and fixed annuities are completely different than an income annuity. I'm going to make a video explaining the difference. Hopefully it will help clarify some of this confusion
If you surrender 10%, then a 10% increase in growth to the post-surrender money does not make up for that 10% loss. I still agree to move it
As I understand it, they charge you a fee to start the annuity…charge to hand over my retirement account?!
They are junk my mom was scammed by a big bank she trusted put her in a annuity the fees came to 12K .Took a lot to get her out then on to a proper advisor that invest proper .
So, Dave would you recommend LPL Financial or Fidelity Investments?
Dave: (grabbing his head because she said ‘annuity’)
Actual Financial Advisors: (grabbing their head when they hear what Dave tells her)
A lot of bad info in here.
Is asset protection perhaps a reason for an annuity. I thought money in an annuity can't be reached by creditors. Anyone know?
After you retire taking part of your 401k and or pension into a annuity is a good thing. That gives you a guaranteed income in retirement. It does depend on what kind.
Mr. Ramsey needs to eat tacos!!!!
The fact that Dave instantly grabs his head just as soon as she says “annuity” tells you all you need to know in the first minute of the vid!