Your Investments and the Coronavirus
Watch the video or read the transcript of the webinar below:
Ryan Dunn:
All right. Hello and welcome. My name is Ryan Dunn and I’m joined by my partner and father-in-law, Dan Searles. We just wanted to make a quick video and talk to you a little bit about your investments and the Coronavirus. Dan, do you want to introduce yourself, you want to say hi?
Dan Searles:
Hi, I’m Dan Searles. I’m the founder of Medallion Financial Group, been here 39 years working with clients just like you, so hello. We’ll all survive the zombie apocalypse.
Ryan Dunn:
It does feel a little bit like that, doesn’t it?
Dan Searles:
Yeah. We’ll help you do it financially anyway.
Ryan Dunn:
Yeah. First couple of things that I just want to address is it does feel absolutely crazy out there. I don’t know about you, you can probably tell by my voice or by looking at me, this is one of the craziest things I’ve ever been through in my lifetime. I’ve heard stories about gas lines and things like that, but this is one of the craziest things I’ve ever been through in my lifetime. The first thing I want to say is that if you’re feeling panicked, that is absolutely normal, it’s okay. If you’re freaking out about the market right now, that is an absolutely okay reaction, you are not alone. Trust me, we work with thousands and thousands of people and pretty much everybody is responding and feeling exactly the same way that you are right now. There’s a lot of unknowns out there, we don’t know how this thing is going to play out, we don’t know what the exact impact of this is going to be and when things are unknown, that generates and creates fear. Dan, is there anything that you want to add to that?
Dan Searles:
I’m very afraid. No, look, I mean, in 39 years we’ve seen, so I started in this industry with Jimmy Carter’s 21% interest rates. You can think whether that was his fault or not, but it was certainly bad. We’ve had the tech bubble burst, we’ve had 911 we’ve had Katrina and many, many crises within this. Having said that, this one is different, but that’s why it’s called a black swan event. Nobody saw it coming, it’s something that you couldn’t have possibly imagined and so was Katrina, so was 2008 with the housing crisis and whoever may have caused that. But the point is, this one is just an act of God and what we’re going to do is show you how to walk through this and make sure that your financial life is at least kept somewhat normal and that you can keep paying your bills through this and really the strategies have to be strategies that will endure any crisis including the next one that we have no idea what is.
Ryan Dunn:
Yeah. I think it’s also important to remember that sometimes when we’re in the middle of these things, it feels like this is going to be the way things are forever. The analogy that I can think of is like when you’re stuck in traffic and your stress level starts to go up because your brain is tricked into thinking, “I’m going to be stuck in this traffic for the rest of my life. I’m going to be sitting in my car stuck,” Where we live, “on I-95 forever.” But eventually the traffic clears up and eventually things get back to normal. So it’s important to realize that while things are crazy right now, they are not going to remain crazy forever.
Ryan Dunn:
The thing to understand about the markets, and you probably already know this, but the markets are really mostly driven by emotions and there’s really two primary emotions that that drives the market. You have greed and you have fear and these are the two emotions that really drive the market. Obviously right now, because there’s a lot of unknown because there’s a lot of fear that’s having an impact on the market, right? The way a lot of people approach their investment strategy is, because of greed, they’re buying on the upside, “Things are going really well, why would I sell my investments right now? The market’s just absolutely crushing it.”
Ryan Dunn:
Then on the opposite, they sell out of fear when the market crashes and they repeat this over, and over, and over, and over again until they don’t have any money. Because this is obviously, logically the exact opposite to a good investment strategy, right? So it’s really important to have a plan so that you can implement a systematic process. That’s part of what we want to talk about, is how to think through a solid investment plan and implement a good process so you don’t find yourself on this path where you’re buying when things are really expensive and selling when things are on sale.
Ryan Dunn:
Let’s talk a little bit about what we think about what’s going on right now. I want to be really straight with you, I don’t want to sugar coat it. It is very volatile right now, we’re seeing market moves that are reminiscent of the financial prices, what we saw back in 2008 when things got really bad. I will also remind you that we have fully recovered from that and then some and it hasn’t been that long. But one thing to keep in mind is that right now, one thing that’s different than 2008 is that our economy and our financial systems are on significantly stronger footing than they were back then. Dan, do you want to add anything to that?
Dan Searles:
No, that’s about right. I mean, you’re on it.
Ryan Dunn:
Yeah. So we’re still seeing expansion as intact, we think that things are going to continue to expand. It is really important that the policy makers do act decisively right now, they need to act decisively to prevent this thing from ending the cycle. But as long as they do that and it appears that they are, then we think that we can end this thing prematurely. Through this time the best advice that we can give just really high level is that we believe investors should just stay level headed. Just like we’ve been talking about, remember that when you’re sitting in traffic that traffic does eventually clear up. The worst thing that you can do if you’re sitting in a traffic jam is, get out of your car and start walking the rest of the way.
Dan Searles:
Actually today, Ryan, you can drive without any traffic at all.
Ryan Dunn:
I know it’s a miracle. I usually have quite a lot of traffic on my commute, it was crazy to see the roads are just empty right now. Like I said, this is one of the most bizarre things I’ve ever seen. But yeah-
Dan Searles:
Let me just mention real quick. What I think is happening in particular is the 24 hour news cycle is scaring everybody to death. We ought to be scared of death guys, I mean really we should. But, our democracy is designed to grind slowly and so the Democrats and the Republicans are having to overcome what our founding fathers set up, which is to make sure the government doesn’t overrun us. But in times of crisis like this, they have to come together, get rid of their partisan differences and pass really big bills of stimulus and all that. Here’s the thing, if you’re in overly concerned about what I just said, you’re probably not set up for the long term, making a big mistake with your finances and maybe we need to help you. But I mean the point is the minutiae is scary, the minutiae for people like us is fun to watch, but probably, maybe not for you, maybe it is. But the point is, is if you’re focused on that, let me just submit to you that you focus is probably wrong.
Ryan Dunn:
Yeah. That’s sounds right. Yeah. Any money that’s invested in the market, that that should have a long-term focus. Finally, remember that when it comes to the market, volatility is normal both ways. It’s normal to have the market rip roaring and see these massive returns, and it’s also normal for it to go down and to see times like right now.
Dan Searles:
Well, yeah. And look, I mean, I can hear people listening to this going, “What the heck, they’re saying this is normal?” It’s normal. I think mentioned black swans in a market are normal, way, way back it was the Civil War. It was World War I, it was World War II. I mean, Kennedy got assassinated, that was certainly a black swan event, 911 was a black swan event. These things are going to come up-
Ryan Dunn:
And they’re going to continue to come up.
Dan Searles:
Yeah. Something new is going to come up.
Ryan Dunn:
Yeah. So not expecting it would be like the equivalent of not expecting a winter after a summer. Of course there’s going to be winter, there’s always a winter. These things go in cycles and that’s the way that you should approach this and it’s important to keep that perspective in times like this. In fact, this isn’t even the first virus pandemic that we’ve seen, we’ve seen these in the past before. So here’s a chart taking us back to 1970, and we can look at these various different viruses and plagues and things that we’ve seen before. You can see, this isn’t the first time that we’ve been through this, this isn’t the first time that the market’s been through this.
Ryan Dunn:
You can see various different viruses have impacted the market in various different ways and some are recovering in a month, sometimes a six month recovery time. But generally speaking you’re looking at a six month recovery time from the market. Now, I am not pretending to be a fortune teller in any way, shape, or form. The truth of the matter is nobody knows how long this recovery is going to take. It could take six months, it could take a year, it could take even longer than that. But the point is, is that this isn’t the first time that we’ve seen something like this.
Dan Searles:
Warren Buffett said it took me 89 years to see something like this. So Warren Buffett also had a really hard time in 911, so when he’s not seen it financially and when he’s not seen it, nobody’s seen it.
Ryan Dunn:
Yeah. The good time to have a financial plan or any plan for that matter is, is not during the crisis, but it’s prior to the crisis. Then you, you might find yourself thinking, “Should I buy, should I sell, should I adjust my plan now?” I think the simple question to that is, how is your plan structured in the first place? The real question is, do you have the right plan? Because if you have the right plan, well then you shouldn’t be worried right now. Warren Buffett has a famous quote and he says, “Only when the tide goes out, do you discover who’s been swimming naked.” Right?
Ryan Dunn:
So now that the tide has come out, if you’re feeling panic, if you’re feeling worried about your portfolio and your retirement, well maybe that’s highlighted the fact that your plan wasn’t right in the first place. So now there’s a temptation to maybe, “Maybe I just stick and wait for the market to come back.” There’s that temptation, but I think you need to ask yourself, do you… I think it’s more simple than that. Dan, feel free to chime in at any point.
Dan Searles:
Yeah, yeah, yeah. No, I’m just going to say the Oracle from Omaha is revered and everything, but… Geez, man, that’s a weird quote.
Ryan Dunn:
But it’s a true quote. It is true. It’s when something like this happens, you can see very clearly who had a good plan. At the risk of sounding arrogant people keep asking, my friends and family keep asking me, “Man, your phones must be blowing up with people panicking.” My phones are silent, I’m calling my clients proactively and they’re going, “Why are you calling me, man? I’m fine, things are fine.” Because we have the right plan put in place and so if you’re feeling panic, then I would assert that this is now just exposed the fact that maybe, maybe you don’t have the right plan in place. If you have the right plan, then the best thing to do, is stick with your plan, as long as it’s a good plan.
Ryan Dunn:
If you don’t have the correct plan, then maybe you need to look at correcting it, and if you don’t know how to correct it, you should talk to someone that does. That person should be somebody, in my opinion, that’s qualified, not the guy in the cubicle next door that read some forums, but talk to a qualified financial advisor, talk to somebody that’s been doing this for a while, that has some experience, that has training in this, that can look at your plan and make sure that you have a solid plan. Dan, anything to add to that?
Dan Searles:
No, that’s right. That’s exactly right. I’ll add, I’ll add one thing to it. I was talking to a guy the other day and his job is rebuilding Wendy’s restaurants. He said, “Well, how do you know what to do in the market?” I said, “Do you know how to rebuild a Wendy’s restaurant today?” “Well, yeah.” “Did you know how to do it yesterday?” “Yeah.” “Will you know how to rebuild it tomorrow?” “Yeah.” This is what we’ve spent our entire career doing, guys. We’re good at it. I’m not good at, well, I mean, I’m not good at rebuilding-
Ryan Dunn:
No, you’re not.
Dan Searles:
I’m not good at rebuilding Wendy’s restaurants but this is what we do. That’s all I got is, we’re kind of like, probably Ryan more than me but we’re kind of like idiot savants.
Ryan Dunn:
Yeah. I don’t know if I’d go that far [laughter]. Here’s some things that you want to look at when you’re looking at, “Do I have the right plan is my plan set for me?” A good plan is agnostic of what’s going on in the market and it looks at some things that are going on with you and your life and a good plan should be customized to you. So there are several things that you want to look for when you look to determine whether your plan is properly suited and customized to you. The first thing that we look for is, what is your risk number? Everybody has a risk number and think of this as something on a scale of one to 99.
Ryan Dunn:
One being really, really conservative, “I’m not even comfortable having my money at the bank, I want to have it locked up in my yard and a safe with a guard guarding full-time.” Really conservative. 99 would be really aggressive, “I’m comfortable taking my life savings and just putting it on black and seeing what happens.” Right? Most of us probably aren’t there, but we’re somewhere in the middle. But just because you’re a certain age, you’re a certain time horizon for retirement, doesn’t mean that everybody has the same risk number. This is something that is very unique to us as individuals. We each have our own ability to tolerate risks. For example, the traditional wisdom is I’m young, I’m supposed to be really risky, but I’m not. I’m very risk adverse, I don’t like taking risk, risk scares me. I’ve never liked taking risks, so I have a low risk number even though that I’m young.
Ryan Dunn:
There’s no one size fits all solution to this. When we’re working with our clients, we use a tool that was designed based on Pulitzer prize winning research to try to determine, or to determine what your risk number is. Then from there we can evaluate what is the risk number of your portfolio. And if those two aren’t matching up, well there goes a red flag, something’s wrong. You’re either not invested with enough risk or more often than not, you have more risk in your portfolio than you should have in the first place. When you dial in this risk number properly, when your comfort level matches your portfolio’s risk, when that’s done properly, then you don’t panic when it comes to times like this, because you’re comfortable with the risk that’s in your portfolio.
Dan Searles:
Yeah. I mean a properly designed portfolio doesn’t to violate your sleep quotient.
Ryan Dunn:
Yeah, that’s exactly right.
Dan Searles:
If you can’t sleep, if it’s worrying, and we get those calls occasionally from people that aren’t clients, but if you can’t sleep, it’s wrong.
Ryan Dunn:
Yeah. Your risk number’s off, you should evaluate that. We have a tool to do that, if you haven’t done that we’d love to help you with that. When do you need the money? That’s the other thing that we look at. This is often confused with what is my retirement date? And that’s usually when you need the money, which is why those two are conflated. But the real question is, when do need to be able to pull the money out of your portfolio? So, money that you’re not going to need for 20 years, that’s what we were talking about before, that’s long-term money. That can be in riskier investments, that has time to ride the ups and downs with the market, assuming that you’re comfortable with those risks and that’s why we have to do the risk number first before looking at this.
Ryan Dunn:
As you scale out from five years, to 10 years, to 15 years, to 20 years, your investments can be calm more and more and more aggressive. But if you need money in the near term, well that money that you’re going to need to live on for the next five years should not be, in my opinion, invested in the market at all. That money should be set aside, you shouldn’t have market risk on that money. The other thing you need to look at is what is your income sources? Do you have a pension, do you have social security, are those two enough to cover your essential expenses? Because that’s another reason that you might be worried is I’m going to run out of money and not be able to cover my essential expenses. If that’s the case, you may want to look to using a tool like an annuity to create what we call a personal pension and that’s one way that we could look at solving that income gap. Dan, anything to add?
Dan Searles:
Yeah. I mean, I think when you mention the word annuity, you get a lot of the negative thought. I would challenge anyone out there to say, and only annuities aren’t appropriate for everybody, they’re an arrow in a quiver, a tool in a box. But the annuities we use are either zero fee or no fee. They’re typically going to give you a guaranteed income or at the very least a guaranteed interest rate. As of today, for example, you could lock in 3.29% for five years, no fees, no catches, no nothing.
Dan Searles:
When you hear the word annuity or some guy on television says annuities are bad, the thing I’m going to caution you on is what’s his motivation, number one, he has one. Then what are you saying when you say annuity? When you say mutual fund, so a lot of people know there’s stocks and bonds, et cetera, but when you say annuity, people think they know what you’re talking about and really they’re probably 15 different types of annuity. Some are good, some are bad, some are in the middle, so within that it’s just a matter of what annuity do you use and is that annuity even appropriate?
Ryan Dunn:
Yeah. That is a point a I was going to make as well is that it may not be the right tool for you and that’s why it’s really important that you look at your plan and customize it on an individual basis. But my point is that you want to look at several things. The first thing is, “Do I have an emergency fund, do I have enough to cover emergencies, is that set aside?” That should absolutely, in my opinion, not be invested in the market at all. The next thing is, “Do I have enough money to cover me for the next five years?” Finally, you can begin to scale your risk out as your time horizon scales out with your portfolio. But all of that only works as you have enough income to cover your basic expenses.
Ryan Dunn:
If all of that’s confusing you, we can help you look at your situation, determine your risk number, look at your investment portfolio and help you put it together in a way that’s customized to your goals and your situation and your risk tolerance. One of the questions might be, why is it so important? You hear this conventional wisdom all the time, right? As you get closer and closer to needing the money, you scale the risk back. But why is that important? The answer to that question is something called sequence of returns risk. Maybe you’ve heard of sequence of returns risk or maybe you haven’t, but I’d like to explain to you how sequence of returns risk works.
Ryan Dunn:
What we’re looking at here is two investors, investor A and investor B. Both investor A and investor B, start with the same exact amount of money, so they both start with a $100,000 in their portfolio. They invest for 25 years, they have two different paths of getting there, but they end up at the same exact place. In fact, if you look, they’re actually earning the same exact returns just in reverse. So you can see here 29%, 18%, 25% in the beginning, and this guy ended with 29%, 18%, 25%. They’re just the same exact returns but inverted, so the average is exactly the same, it’s an 8% average. So even though they took these different paths, they ended up with the same exact amount of money, okay?
Ryan Dunn:
That’s how it works during the accumulation phase. The important thing to understand is, there’s no withdrawals, nobody’s withdrawing any money from their portfolio, they’re just investing it. They’re not panicking when the market tanks, they’re keeping their investment completely consistent for this period of time and then this is what their results look like. Now let’s talk about retirement. So now they go into retirement and the variable changes, now they start taking withdrawals. They both start with $685,000 but investor B runs out of money by year 13, the same scenario as before, same returns as before except now investor B runs out of money in 13 years while investor A, he still has a bunch of money left at the end of his 25 year period of time.
Ryan Dunn:
The answer to why this works is sequence of returns risk, which is a new risk that’s introduced when you start taking withdrawals. You see what happened here was this guy retired on a bad year and he started taking money out of his portfolio and he dug a hole so deep that he wasn’t able to ever recover from it while he continued to make withdrawals. It’s like digging a hole with two shovels instead of one and that’s called sequence of returns risk.
Dan Searles:
I’m not sure why, but somehow the Clint Eastwood movie phrase comes up, “Do you feel lucky?” In another words, which one are you? Are you the guy that’s going to be account A, he gets lucky and his kids and grandkids inherit a bunch of money or you account B, that’s unlucky, like the people that have retired in the last year or two or three and they are account B right now. That’s suppose folks, and if they haven’t planned properly, they’re going to be, the guy broke in 13 years and they don’t even know it yet, which is kind of sad. But if they’ve done proper planning, you can take this risk that we’re looking at out of the market, out of your plan.
Ryan Dunn:
Yeah. That’s absolutely right. I actually had somebody say that to me one time, Dan, I had them say, “Ryan, the one thing that you’re missing when you’re looking at this is, sequence of returns risk and work the other way.” Sequence of returns risk could work in my favor, I could retire and in a 29% year and then I’ll make way more money. My response was, “You’re absolutely right. It does work both ways.” But just like you said, do you feel lucky? How lucky do you feel? And I don’t think that hope is a strategy, right? Hope is not a strategy. So rolling the dice like that is a perfect example of not having a proper plan, a proper plan plans for contingencies. You have a strategy that creates predictability, predictability reduces anxiety.
Dan Searles:
Yeah, look, when you’re young, and that was referenced on our first chart, when you’re young, you’re looking at return of income, everybody ROI, right? A lot of people heard that, return of income, but how much return on investment, excuse me, but the sequence of returns does not matter at all. But when you get within five years of retirement, you need to look at real liability of income rather than return on investment, liability of income. Our friend here in account B, didn’t plan properly, he doesn’t have the right setup. He ran out of money because he didn’t get reliable income.
Dan Searles:
You still need to take risks, but how much risk you can take or what percentage of your portfolio you can take risks on, should be in a proper plan for retirees based on reliable income. Certainly a pension if you have it as part of that and social security of course. But what other reliable income do you have and will that reliable income pay your bills, will it pay your bills with inflation? Once we’ve determined that we’re a long way towards making sure we haven’t violated your sleep quotient, that you can sleep at night.
Ryan Dunn:
Yes, it’s absolutely right. The other thing that you want to look at as you’re assessing do I have the right financial planner or what are your financial goals for you? Do you have any major purchases coming up, are you planning on buying a house, getting married? Do you have a child that’s getting married that’s going to cost us a whole bunch of money? Do you have travel plans? What are your financial goals? If you have short term financial goals, going back to needing that liquidity, that money is not money that should be invested in the market. So as you’re assessing your plan, you want to lay out, what are my goals, when am I planning to retire?
Ryan Dunn:
It may not be an exact date, but you start with something and you begin working from there. Do I plan on downsizing my house, buying a vacation house, buying a boat? I don’t know what it is for you, but you have to think through those goals and your plan needs to have those goals in mind. That’s going to be an important part of your planning. Finally, as you’re assessing your situation, are you diversified? Are your eggs all in one basket or have you diversified your eggs across multiple baskets? Are you heavily weighted in bonds, are you heavily weighted and mutual signs or a certain tech sector or your own company’s stock?
Ryan Dunn:
That’s something that you really want to look at as you assess your portfolio and decide whether you have a proper plan is, what does your diversification look like inside your portfolio. Finally, the last thing to remember is that in markets like this, you can really begin to just focus on the negative, and on the negative, and on the negative. But there’s opportunities here. This has presented some opportunities for you and so to assess what those opportunities are, questions I have for you are, do you have a long-term outlook? Do you have a high risk tolerance and a long-term outlook, if so, now might be a great opportunity to take advantage of this low market and add money to your portfolio?
Ryan Dunn:
Buy low, sell high that’s conventional wisdom when it comes to investing. Now’s a good opportunity to ask yourself, do you have a well thought out financial plan? As we’ve gone through these questions and as we looked at these things, have you looked at your risk number, have you matched that up with your portfolio? Have you really sat down and thought about your goals and what they are both short term and long term? Do you have a plan to deal with sequence of returns risk? Is your portfolio structured in a way where your risk is scaling based on your time horizon? Have you thought through all of these things, are you looking at taxes and estate planning? Do you have a well thought out financial plan and now it’s presented an opportunity for you to stop and think about that.
Ryan Dunn:
If you’re not sure that brings me to my next question, do you have a trusted advisor? Do you have an advisor that you know is on top of this and can guide you through designing and developing a well thought out financial plan? If you don’t, then obviously I have some bias here being that I am a financial advisor, but I highly recommend that you get one. It doesn’t have to be us, although shameless plug, we’re very good at what we do if you’re not sure. But it is really important to have a trusted advisor, especially in times like these and this really illustrates, when things are going well and smooth sailing everybody’s a genius. But it’s in times like these where it really pays to have somebody on your team that has helped you properly prepare and can guide you through it.
Dan Searles:
Yeah. The thing that I would be asking if I was listening to this or watching this is, how do I know who’s a trusted advisor who is not? Number one, we’re fiduciaries. You’ve probably heard a lot of talk about that, a fiduciary is somebody that legally and ethically has to put you first. The Obama administration tried to make everyone find a fiduciary in our business, that legislation failed narrowly. Having said that, we voluntarily have been fiduciaries since the early ’90s when it first became an issue we said, “Yep, we’re in. That’s what we want. That’s what we want our people to be able to trust us that way.” The second thing is, just go to a site called broker check, you can look us up and you’ll see us or anybody else, maybe your current advisor. You can see who has had dings on their licenses, you’ll see that we have not had any and that’s in 39 years of practice for me and what, 9, 11, I don’t know how long you’ve been in practice.
Ryan Dunn:
I don’t know, something along those lines.
Dan Searles:
A long too. The point is, is you can look us up there. There are other sites where you can look up planners and check them out as well. Ryan, you have a federal designation, I have a certified financial planner designation. Again, you can call the CFP board, say Dan Searles and in Maryland and houses record and they’ll tell you right there, you can also just look it up on the website. So you can check us out. You can also check out our websites, so there’s background work that you can do very quickly that will show you who we are and our reputation.
Ryan Dunn:
Yeah. If you’re a client of ours, thank you so much for being a client of ours and know that we really appreciate you, we appreciate your continued trust in us. If you’re not a client of ours and you’d like to be, or you would at least to like have a conversation with us about what it looks like to work with us and how we help our clients, we would love to have that conversation with you. Our website is medalliongroup.com, our phone number is (301) 990-9704. Feel free to give us a call. Go on the website that you can submit a request to have somebody call you there.
Ryan Dunn:
Our first meeting is always free. We always start with a get to know you session, learn more about you and your goals. You can learn more about us without feeling any kind of obligation or pressure in any way whatsoever. So thank you everybody who stuck with us through the end of this video. We really hope that this was helpful to put things into perspective and just to circle back and wrap up, now’s a good time to assess, do you have a good financial plan? If you’re invested for the long term stay invested for the long term. I know that it’s really easy to feel panicked right now, but remember that this too shall pass. This is only temporary and we’re all going to get through this together. One thing that I think that this has really highlighted, is the community that we have here as everybody comes together and everybody works together so there is positives in these kinds of things because it really illustrates the goodness in humanity and we’re really seeing that all over the place.
Dan Searles:
Yeah and I wanted to add to that because I think that’s really important, Ryan. I wanted to add to that, that stay positive out there guys. It’s a choice number one, staying positive is a choice. Get your exercise, stay away from people that you think you may make sick and realize that as Americans we’ve overcome over and over and over again, Americans overcome. We do it together and again you can see it in the national politics, these guys that have been telling each other everything except holy preachers over the last five years are now coming together and saying, “It’s time to join together, lock arms and move forward.” Again, keep a positive attitude, if you think your allocation and your financial plan is either out or whack, or you don’t have one, now is the time to come see us and we’ll be glad to help.
Ryan Dunn:
Awesome. Awesome. All right. Thank you all so much. Stay positive and we’ll see on the next webinar. Take care.
Dan Searles:
Bye guys.
The guarantees of an annuity contract depend on the issuing company’s claims-paying ability. Annuities have contract limitations, fees, and charges, including account and administrative fees, underlying investment management fees, mortality and expense fees, and charges for optional benefits. Most annuities have surrender fees that are usually highest if you take out the money in the initial years of the annuity contact. Withdrawals and income payments are taxed as ordinary income. If a withdrawal is made prior to age 59½, a 10% federal income tax penalty may apply.
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