Brian Decker, Owner and Founder of Decker Retirement Planning joined Janeen on ABC4 Utah today to discuss what someone should know before buying or investing in a Variable Annuity.
The first is cost and Brian tells us that there are three layers of fees in most Variable annuities. There is a commission right off the top of YOUR money of typically 7% or so, the broker gets paid every year you own it, the insurance company gets paid every year you own it and the mutual fund companies get paid EVERY year you own it! One huge up-front commission and then three layers of fees every year you own it, that usually adds up to about 5% per year.
All of this means that each year you’re starting your portfolio down -5% and there is normally not a disclosure on the fees.
People are still buying into variable annuities because they are told that they have “guaranteed” investment in the stock market. They invest in the Variable Annuity and when they die, they get the portfolio value or the “high water mark” whichever is higher. Since markets go up 70% of the time and the insurance companies are charging such huge fees, it is not a big risk for the insurance company.
At Decker Retirement Planning, they use two-sided computer stock models where they are designed to make money as markets go up and protect you as markets go down. People can go to their website to get performance results emailed to them. They have made money, collectively, in 2000 to 2002 50% S&P 500 drop, in 2008 when the markets took a huge hit, and February and March of last year when the markets dropped 32% in 5 weeks.
Be sure to contact Brian and the team at Decker Retirement Planning to help you with your portfolio risk questions and go to his website to request portfolio performance for these computer models. Brian and Decker Retirement Planning will help you plan for your retirement future.
Decker Retirement Planning contact info – Phone# (855) 425-4566 or visit their website.
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