Page 174 - Ready Set Retire

Stephen J. Kelley

The 10 Most Common Objections to Annuities
10. “I DON’T WANT TO TIE UP MY MONEY.”

I get it. Where is the most liquid place you can think of to put
your money? Money market accounts? Checking? Savings?
Your mattress? Why don’t you put of all your money in these
locations? Because you need a return that will grow your
money and fight inflation. You may also need an income these
low or no-yield accounts can’t give.

“By the way, where is your money now?” I often ask. If your
answer is “in the market,” then you’re violating your own
liquidity principle. Bear with me. I realize you can sell anytime
you want…

But if you called your broker during a down market, how much
of what you gave him could he send you? 50%? 60%? Less?
On $100,000 let’s say he sent you $50,000 (which is all that’s
left due to the market’s volatility). You call him up to tell him
you received the $50,000 and ask how long it will be before
you get the other $50,000. He informs you that if you want the
second $50,000 you must return the first $50,000 and then wait
a long time… and you might get it back. You may have little
or no liquidity.

With an FIA the worst your liquidity could be damaged would
be to return all but about 10%-12% (again – worst case –

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