I Give a Damn About Annuities – You Should Too

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Why People Need Annuities

I recall well my entrance into the life insurance market. Nearly 20 years ago, I was a single mother with three babies in diapers; wondering what career I could hold in Des Moines, Iowa that was stable. Aha! Insurance. Before becoming a homemaker, I had managed a grocery store, so working in a life insurance home office was completely foreign to me.

There was a lot of new information thrown at me very quickly in those first few days as an insurance professional. None of this information could have been more important than the enrollment information for my 401(k). Had I only known it at the time…

A 401(k)? What was it? I didn’t know. My only experience with retirement savings had been an Employee Stock Ownership Program (ESOP). My new employer assured me that a 401(k) was good, and something I really needed to participate in, as the 4 percent employer match was “free money.” After much prodding, and feeling a lot like I didn’t know what I didn’t know, I enrolled in the savings plan, and logged-in to the website to manage my 401(k).

How did I choose which funds to put my money into? I had no advice; no direction. I could have read the prospectus that I received at enrollment – yeah, right. As if I had a bunch of free time in between working full time and all those diaper changes. I was inexperienced in investing. I didn’t know what I had purchased. In short, I had no business owning a 401(k).

And I finally realized it when the
dot.com bubble burst. Being a woman who relied on her church to help feed my children, I was devastated when I found out that (GASP!) you could lose money in a 401(k)? What? Why hadn’t anyone told me this when I enrolled into this savings vehicle? I didn’t feel comfortable losing money and now I had lost A LOT of money. What could I do now? I didn’t want to lose more money. I couldn’t afford to lose. I turned to the person I respected most in the financial services industry, my boss.

After explaining my dilemma, he inquired, “Why didn’t you buy an indexed annuity?”

“What’s an annuity?!?” I asked. I had no idea what the word meant. None.

After my boss responded, and let me know that an annuity was a type of retirement accumulation vehicle that would guarantee me an income I could never outlive, I was intrigued. I’d heard a lot about American’s longevity extending, so I understood the importance of an annuity. Plus, I was uncertain about the future of our nation’s Social Security program, so I wanted to make sure I was saving for retirement on my own. My boss further explained that an indexed annuity was a type of annuity that earned limited interest based on the stock market’s performance, but would never lose money as a result of market declines. Sign me up! This sounded exactly what I wished I would’ve purchased before, instead of the crummy 401(k) I ended up with.

“Where can I buy an indexed annuity?” I asked.

My boss just stared at me in disbelief. “The company that employs us is the No. 1 seller of indexed annuities in the country.”

WHAT?!? The company I was employed by had pushed me into a 401(k), but didn’t even tell me about a product, which they were experts at selling, and was better-aligned with my risk-averse profile?

I felt horrible. Uncomfortable. This should not have happened to me. But wait…what if this happened to my grandparents? At least I was young, and learning what I’d done wrong early. Yet, if it had happened to my grandparents…my grandma had more than 40 years with her employer. She would lose far more severely than me – not just thousands, but thousands and thousands.

I was resolved. I needed to make certain that my grandparents learned about annuities. I wanted to make sure that everyone learned about annuities. No one should have to go through the painful exercise that I just had, just to learn that a 401(k) is not the only option for a retirement income vehicle.

Ten years after starting my own business, this is still what I am doing. Americans are looking for information today, more than ever before. We are taking control of our health care, our families, and our finances. You would be surprised how many people want to know about annuities. We receive thousands of inquiries about annuities from consumers each year through my second business, Wink, Inc.

Last year, I became the President of a non-profit organization called The Society for Annuity Facts and Education (SAFE). Our mission is solely to provide factual, reliable information about annuities to consumers, so that they have the information that they need, in order to make decisions about whether or not an annuity is right for them. It is a mission that I am passionate about. I hope my experience will infect you, and cause you to support SAFE’s initiatives. Embrace Annuity Awareness Month, and help us to educate our nation on this valuable insurance product.


Sheryl Moore is President and CEO of Moore Market Intelligence, an indexed product resources in Des Moines, Iowa. She has over a decade of experience working with indexed products and provides competitive intelligence, market research, product development, consulting services and insight to select financial services companies. She may be reached at sjm@indexedrockstar.com.

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