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Is Ken Fisher Right?

Monday, June 1st, 2020 | Uncategorized | No Comments

By Yvonne Marsh, CFP®, CPA

We use insurance companies all of the time – to insure our homes if they catch fire, to insure our health if we are hospitalized, to insure our life if we die too young, to insure our income if we’re disabled and unable to work.  So why are we so apprehensive to insure our income in case we live too long?  I think it’s because of the bad press surrounding the word “annuity.”  

We’ve all seen Ken Fisher’s ads – “Why I hate annuities and you should, too.”  His premise is that you shouldn’t give up the potentially higher returns of the stock market for the safety of annuities – whether you use them as a safe investment alternative, or to provide guaranteed income, or both. 

I’ve always chafed at those ads, because retirement isn’t a one-size-fits-all world.  For some retirees – he’s right – they have a pension and Social Security and they can afford the market risk.  But for some retirees without an employer pension, he might be wrong.  My clients tell me that their peace of mind isn’t in the dollar amount of assets they’ve accumulated or how smartly it’s invested.  Their peace of mind comes from knowing they’ll never outlive their money, no matter what the markets do.

And it’s not just my clients who think so – a study by Wade Pfau, a noted retirement researcher at American College, asked a group of retirees what they liked the most about the income annuities they owned. They said it gave them:

» Increased confidence, reporting higher levels of life satisfaction and less stress.

» The freedom to spend… and invest. Whereas they weren’t comfortable spending their savings, they felt free to spend their monthly annuity income.  And it provided confidence to invest other assets and accept market risk.

» The opportunity to leave a legacy, reporting they felt more comfortable sharing assets with family and charities knowing they had enough monthly income.

I’m the first to say that not all annuities are created equal – some are great and some aren’t. My job is to understand the differences and educate my clients how to choose wisely or to decide it’s not for them. But I don’t hate annuities. And if this recent market volatility shook the foundation of your retirement plan, maybe you shouldn’t either.  Our firm offers both wealth management and insurance services, so we have no agenda to sway you in one direction or the other.  It only matters what is right for you.  Call, email, or contact us on our website if you’d like a second opinion on your retirement strategy. 

Marsh Wealth Management, LLC
Fiduciary Registered Investment Advisors
504 Ebenezer Road
Knoxville, TN 37923

Financial Planning & Investment Advisory Services are offered through Marsh Wealth Management, LLC (“MWM”), an independent investment advisor registered with the state of Tennessee. Yvonne Marsh is an Investment Advisor Representative of MWM in the state of Tennessee. Marsh Professional Group, LLC is a TN registered public accounting firm and a separate legal entity from MWM. For a detailed discussion of MWM and their investment advisory fees, see the firm’s Form ADV on file with the SEC at www.adviserinfo.sec.gov.

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