GAO (Gov’t Accountability Office) States Delay SS, Add Annuities





Over the past couple months I’ve seen positive annuity articles published by the New York Times, FOX Business, SmartMoney and the Wall Street Journal!
Now add to the list the United States Government Accountability Office (GAO)!!!

On July 1st, Bloomberg News released a story based on the most recent GAO study. It states:


“The risk that retirees will outlive their assets is a growing challenge.” Increased life expectancies and health-care costs coupled with declines in financial markets and home equity over the last few years have “intensified” workers’ concerns about how to manage their savings in retirement. Annuities are insurance contracts that can offer a steady stream of income for life. Middle- income households, defined in the study as having a net worth of about $350,000 including their homes, that don’t have traditional pensions should consider using a portion of their savings to purchase an inflation-adjusted annuity.”

The study also points out:

  • Almost half of those near retirement are predicted to run out of money and won’t be able to cover their basic expenses and uninsured health-care costs.
  • A husband and wife who are both 65 years old have about a 47 percent chance that at least one of them will live until 90, the GAO report said.
  • An immediate annuity can protect retirees from the risk of outliving their savings. For example, a contract purchased for $95,500 by a 66-year-old couple in Florida may provide $4,262 a year until the death of the surviving spouse and include increases for inflation. And
  • Only six percent of workers with a 401(k)-type plan have thus-far opted for an annuity at retirement.

If you want yet another great credibility piece to use with clients, CLICK HERE FOR THE FULL COPY.
When I can help with anything else in your practice, contact me. Make it a great month in July!

“I Don’t Want an Annuity…”

“I heard annuities are bad investments, and with everything I’ve seen, I DON’T WANT ONE!”

Ever heard something like that before? I’m sure you’ve worked with clients that walk into your office or seminar with this mindset. Can you blame them? Popular media has plastered negative bias about annuities everywhere you look. Check out some recent drivel:

“Here’s a puzzle for you – the answer to which could make or break your financial future. What kind of business takes your money, gives you a guaranteed minimum return and then invests the money in a complex derivative of securities or crummy real estate investments? Wait, there’s more. What kind of business takes your money and gives you a guaranteed level of performance, a stop out, plus some upside in the S&P 500, and then not only fails to hedge but invests in the very same crummy, toxic properties? If you guessed the annuities market, go to the front of the line. Unfortunately, these days, the front of the line in the annuities market heads right off a cliff.”

Guess which popular media figure made that statement?
Jim Cramer, CNBC host of “Mad Money.” For many Americans, Jim Cramer is viewed as a notable financial analyst who “understands” investments. If he is claims annuities are bad investments, then it has to be correct, right?

As far as truth is concerned, you and I both know much of what’s published in the media is biased half-truth. Fact remain that in the consumer arena, perception is 90% of reality. So what should you be doing to convert resulting annuity skeptics into annuity buyers?

For starters, remember that Advisors Excel is taking this bull by the horns for your benefit. In January this year, we hired one of the top financial services public relations firms in the nation and began an aggressive, six-figure public relations campaign! Our positive annuity blitz promotes the virtues of indexed annuities in major media publications. While we’ve strongly supported the efforts of insurance carriers and various trade organizations to combat the rampant misinformation surrounding annuities (FIAs in particular), we haven’t been excited about the results, so we took the task on ourselves.

Our goal is to leverage Advisors Excel producers to get major media outlets educated about and promote the benefits of indexed annuities. We’ve already had tremendous success with this effort, with several of our advisors gaining national media exposure while extolling the virtues of the products we sell. These positive stories lend you added support and help consumers make informed decisions. As we continue to build momentum in the major media outlets, you’ll be the first to know about these positive stories as another perk of partnering with me.

In addition, there are a number of well-rounded resources which shed positive light on traditional and fixed index annuities. Everyone’s heard the saying, “It takes ten positive things to erase one negative.” If you already keep a library of positive articles, I suggest adding the following pieces to your menu.  If you don’t currently have a library, these three resources would be a great start:

When it comes to combating negative press, don’t forget to adequately acknowledge your clients’ intellect. Rather than simply taking a “point-counterpoint” approach to media bias (often resulting in a non-productive, frustrating tennis match), help them understand why such press exists in the first place. Truth be told, there is a war raging over the American retiree’s dollar – a war fought between banks, insurance companies and Wall Street. Of those three financial outlets, which has the biggest influence on popular media?

And much like medicines, financial products are developed with very specific uses in mind. Thus, blanket criticism of an annuity, mutual fund, stock or CD is much like blanket criticism of penicillin or ibuprofen. In the wrong hands, used for the wrong purpose, any medicine can be abused.  However, when used to treat the needs for which they were designed, today’s prescriptions and financial vehicles can be just what the doctor ordered. They can be just what clients like Eleanor (below) rely on throughout their retirement years..

To discuss additional strategies that top producers use to overcome media negativity and position the true value of annuities, call me anytime.