Embracing Annuities

Here at Table Bay Financial, we love annuities. I continue to be amazed at the reticence of some consumers and their advisors to use annuities to help solve the intractable challenges of financial security in retirement. Whether seeking a secure way to accumulate additional savings for retirement or a way to guarantee a
stream of lifetime income, it seems that non-annuity alternatives continue to be explored and promoted as the only viable alternatives. However, what often is missing in the equation is the simplicity with which annuities can help consumers reach their financial goals. As one ages, it seems that simplicity is an increasingly important virtue.

As clients age and experience cognitive decline, financial solutions that are self-completing and require little if any oversight would seem to be of value. While complex withdrawal strategies have their place in providing more liquid non-annuity alternatives that some retirees and their financial professionals prefer, the fact remains that there can be no guarantee that the professional oversight required to execute a complex strategy will remain consistent and present throughout the retiree’s life.

Given these considerations, it would seem that a core holding of many retirees needing sustainable retirement solutions should include annuities, either classic income annuities or deferred annuities with lifetime withdrawal features. Rather than minimize the value of the financial professional in the process, these self-completing solutions can be a core holding and ensure that the financial professional’s legacy of prudent planning is executed throughout the client’s lifetime, regardless of the presence of the financial professional.