By Shawn Moran
Annuities are tools. I have often said that we do not sell annuities anymore than a carpenter sells a hammer. A carpenter sells the vision of a home that he will help to build … a place where his customers can grow old with the one they love, raise their children and one day play with their grandchildren. A hammer is just a tool to accomplishing that goal. Clients are not looking for an annuity. They are looking for a comfortable retirement, with a minimum of financial stress and a maximum of retirement adventure. They want the money to knock off all of the items on their bucket lists. They want the confidence that their money won’t die before they do. Now what does all of that sound like? Yep. An annuity. The point is that the annuity (like the hammer) is just a tool to the accomplishment of our client’s life goals.
Those of you who heard me speak know that I like to tell stories. Having an eight-year-old child, I know how his eyes light up when it is story time, but truth be told I love a good story, too. And so do you. And so do your clients. With annuities, there is so much confusion in the marketplace and so much background noise from critics (do we really need to hear one more time about how much Ken Fisher hates annuities?) that sometimes a story can help cut through the clutter. Consider this:
My wife and I love to travel, and one of our favorite places to travel is San Francisco. This beautiful “city by the bay” is one of the most beautiful places in the United States, with its rolling hills, old fashioned street cars and the fog rolling in off of the water. One of the central attractions of San Francisco is the Golden Gate Bridge. Built in 1937, it is an engineering marvel. Over the years it has survived all that nature has thrown at it, from the pounding waves of the ocean, to the high winds that come in off of the water and the earthquakes that are a fact of life in San Francisco. To ride across the Golden Gate Bridge is a great experience … you are able to enjoy the spectacular views without having to worry if the Bridge will support you in getting to the other side.
Contrast the Golden Gate Bridge with the Tacoma Narrows Bridge. Built in July of 1940, it was hailed at the time as the longest suspension bridge in the world, at 7392 feet. Unlike the Golden Gate Bridge, however, the Tacoma Narrows was not built to last. Poorly engineered, it would sway violently from side to side when you were riding across it, every gust of wind creating a moment of terror. It lasted all of 4 months, for in November of 1940 it collapsed, unable to withstand the elements. If you look up “Tacoma Narrow Bridge” on YouTube, you can see old black and white news footage of that being tossed around like a hammock in a hurricane. If you were to be tempted to drive across it, you would want to have a parachute strapped to the roof of your car.
Planning for retirement is a lot like building a bridge. We start with where we are right now and we put a plan in place that will get us to where we want to go … across the bridge into a comfortable retirement. That bridge may be very long for those who are 30 years from retirement or very short for those who are only a few years away, but the principle is the same … we want our bridge to be able to survive whatever unexpected things are thrown at it. So many retirement plans today are built on bridges like the Tacoma Narrows Bridge. If the winds of volatility kick up, or an earthquake of market loss hits, the Bridge will collapse along with hopes of a comfortable retirement. The value of integrating an annuity into a diversified retirement plan is that it can help you to engineer for your clients a stable bridge to retirement that can survive those kinds of catastrophic events and give your clients the confidence that their retirement can be what they have always dreamed it would be.
At the end of the day, retirement planning is nothing more than aligning our client’s portfolio with their passions, of matching their dollars to their dreams. Annuities are not perfect products, but they can be powerful tools in helping our clients to have deeply meaningful retirements with the confidence their money will live as long as they do.
Call the wonderful people at Tarkenton Financial to start engineering your clients’ bridge to retirement that will weather the storm of retirement. You can also fill out the form below to instantly download a Sequence of Returns whitepaper, I wrote, that illustrates the storm that retirement can bring and why your clients need a bridge to retirement that will not faulter.