Locked Up With Annuities

Case Study locked up in annuities.jpg

THE CLIENT’S SITUATION

Frank and Linda had been working with a financial advisor for a long time but wanted a second opinion.  

PARAGON’S SOLUTION

After a quick look at their portfolio, it quickly became apparent that their advisor, during a brief period of market uncertainty, had encouraged them to place half of their entire retirement nest egg in low-returning, high-fee annuities, loaded with expensive “guarantees” to provide lifetime income should the annuities perform poorly.

However, a thorough analysis of their situation, along with consideration of their Social Security and pension income, determined that their need was not MORE guaranteed income sources, but an opportunity to grow their nest egg in retirement, enjoying spending flexibility, and an chance to leave their children a meaningful inheritance.

What Bill and Linda had really needed was coaching and confidence in a sound, academically backed, low-cost investment policy, not a sales pitch recommending expensive products that pretend to be a cure for investor worries - all the while taking advantage of the situation with high profits for insurance companies and fat commissions for the broker who sells them.

PARAGON analyzed the fees and remaining surrender charges of the annuities and discovered that - even AFTER PARAGON’s fees - Bill and Linda could save over $10,000 annually by surrendering their annuities and rolling those dollars into a portfolio managed by PARAGON, where the average expenses were less than one quarter of one percent annually.

Now, invested at a similar risk tolerance but with lower fees, retirement planning  projections show that Bill and Linda’s nest egg will likely grow to several hundred thousand dollars more over their retirement than before,  primarily as a result of reducing the return-draining fees in the annuities they had purchased in a moment of panic induced by temporary market volatility.

VALUE TO THE CLIENT

Bill and Linda will save over $10,000 dollars annually on their portfolio, even after considering PARAGON fees.

Bill and Linda’s children will likely inherit hundreds of thousands more than they would have previously – unencumbered by frustrating insurance company rules and complex tax treatment.

PARAGON’s continual coaching and communication helped Bill and Linda be better investors, sticking to an investment policy proven to maximize wealth and flexibility in retirement.

Jonathan Darabos