I have a client approaching retirement age and it prompted me to complete some due diligence on a financial product he expressed some interest in learning more about on a practical level. As I shared with him, ever since I first learned of Fixed (or Equity) Indexed Annuities (FIAs) about seven years ago, I have been perplexed by what I have read. Technically, I understand this complex financial instrument. But the esoteric and intangibles from the press is elusive, at best. There have been some good things pointed out, but mostly it has been bad, negative press.

I understand their position: There were those unscrupulous agents in the financial services industry who took advantage of the elderly and it further served to fuel the flame of negativity. It became headline news when Chris Hansen, the Dateline Correspondent famous for his, “To Catch a Predator” series, “began hearing complaints from senior citizens and government regulators across the country about the tactics some insurance salesmen are using to sell certain investments to retired folks.” Ultimately I agree with Hansen when he said, “it may be appropriate for some, but not for everyone.” I couldn’t agree more. For the right person, it is a strong and viable financial product; for others’ it is inappropriate. But to blame the actual product and label FIAs so negatively, when it is not, is equally misleading. Again, I believe it all boils down to appropriateness. However, what the mainstream press has conveyed to the general public is one-sided. All that seems to have been written about FIAs is skewed to demonize it as a ripoff and financial hoax, when it clearly is not.

I was pleased to come across the following interview by such a highly regarded Wharton School of Business Professor, Dr. David Babbel. As far as I am aware, this is the only study that exists that is wholly objective and totally based on solid academic research by a person with absolutely no monetary, or regulatory influence to gain. He’s credible: He’s from Wharton, not some unknown, online-only university. Needless to say, I was ecstatic and felt vindicated in my beliefs. The way I see it, it’s your retirement dollars at stake, educate yourself. Start by listening to the following interview below, or at bare minimum, read the transcript of the interview as the information could make a huge difference in how you allocate your retirement funds and it’s distribution successfully. Here’s to your financial success!

Annuity Digest Radio Interview

Annuity Digest Radio Transcript (PDF)