Buyer Beware -What You Need To Know About Annuities Before You Purchase | The Retirement Income Show

Mark Elliot: Glad you’re with us today for The Retirement Income Show with Troy Sharpe, the CEO and founder of Oak Harvest Financial Group. I’m Mark Elliot. You can always go to the website to find out more about Troy and the team. Great website, tons of information. OakHarvesFG.com. You have questions, concerns, and Troy’s covered an awful lot of ground already on the program, 800-822-6434 is the number. No cost to chat with the team, they’re here to help. They just don’t know if they can help you until you reach out. 800-822-6434.

Of course, we’ve talked about Troy’s YouTube channel. All you have to do is search for Troy Sharpe and Oak Harvest. You can find up to almost 300 videos now. Troy does one every single week. Chris Paris, the Chief Investment Officer, does two every week. Jessica is going to start doing some videos. She’s already got some in the bank that are getting ready to be released. They have a lot of information out there, whether it’s financial questions, retirement questions. There’s all kinds of moving parts certainly going on in our world right now, and Troy and the team are here to help if they can.

The YouTube channel, go a lot of different directions, Troy. There’s no question about it. I’m waiting for the series where I break down your golf swing and we go from the tee to the fairways, to around the greens and bunker play and short game and all of that, but that’s not on the horizon, I guess, at this point. You’ve got a new series though coming up on YouTube, and you wanted to touch on that before we wrapped up today’s program.

Troy Sharpe: Man, so real quick. I probably played the best round of my life about a month ago. As you know, I’ve been working on my game and practicing, and it was really cool. I was in a tournament. I was the member guest out at Carlton Woods. You know when you play golf, Mark? Typically for us amateurs who aren’t +4 handicaps or so like you–
Mark: No, I’m getting old. I’m now 62, so it’s only like +1 or something like that.

Troy: Okay, okay, okay. There’s usually some piece of the game that’s missing, whether it’s the putter or the short or the chipping and the pitching or the driver, whatever. It was a two-day tournament out there and I brought my guest out, his name’s Greg, and Greg’s a good golfer. He’s probably a 2 handicap and I think he shot 79, 76, or something like that.

The first day I definitely played above what I normally play, but the second day, I think for the first time in my life wherever I wanted the ball to go, whatever I wanted it to do it, it just did it.
Mark: Wow.

Troy: Not every putt fell but I hit every putt almost exactly where I wanted to, I had great distance control with the wedges. It was just one of those days where everything clicked and I was just making tremendous contact from a ball striking perspective and really, really cool. Then, of course, I had some things planned and I was gone for a couple of weeks out of town, so I played about one round in a month. Didn’t get any practice in, and of course, I go back out there and didn’t have that same feeling.

Mark: Wasn’t the same. It was not the same.
[laughter]

Troy: But it does go to show–

Mark: That’s good though. You’re seeing progress though. You’re working at it, you’re getting better.
Troy: You put the work in and you can get some positive results, so that’s good.

Mark: That’s really what the financial planning because it’s not something you just throw a dart. Back in the day you could just throw a dart at the stock market and win. Today, you’ve got to have a strategy. Certainly, Troy and the team at Oak Harvest can help you in the investment world. That’s a big part of the investment plan. That’s why they start with the investment plan. Then they go to the income plan, then the tax plan, the health plan, the estate plan. It’s all part of the retirement process.

Besides the investment world, you can also help people in the insurance world as well, and you’ve got a new series coming up on YouTube.

Troy: Yes. The step came about because I saw something in 2021. If I remember correctly it was 254, I want to say billion with a B, dollars of annuities were sold in 2021. Now, full disclosure here. I own an insurance agency, have for many years, and we do help people get into guaranteed rate annuities, fixed indexed annuities. We do lifetime income planning with the insurance agency, but I’ve always felt we do it the right way.

What I mean by that is we’ve never ever looked at the commissions that these annuity products pay to determine which products we’re going to sell. I’m the type of person when– I gave an example in one of the videos I did in this YouTube series. By the way, this series is all about educating you about annuities. The good stuff, the bad stuff. We’re lifting the hood in the insurance industry so you can see how people get paid, why they get paid this amount, and understand, or at least gain enough knowledge to–

If you are considering adding an annuity to your portfolio in retirement for either safe growth or lifetime income, you can understand the different types that are out there, which ones have the most fees, which ones don’t have any annual fees, how they grow, the mechanisms within them. Honestly, when I say that it kind of sounds boring, the series, but it’s actually really, really, really good. We’ve launched three of the videos, I believe, so far. I’m not sure how many there are going to be because I work on it throughout the week. Then we get it recorded and then we produce it, and then we release it on Thursday at, I want to say, 9:00 AM.

250-some billion dollars worth of annuities and the thought came to me, “How many of those people actually bought an annuity that was part of a plan, or did they just attend some dinner seminar and bought some annuity from some guy who he sees a hammer?” You know what I mean by that, right? Everything’s a nail if you’re a hammer? They only sell annuities, and they only push annuities. I’ve known people over the years in the industry like this. I don’t ever name any names but I’ve come across a bunch of them before.

An annuity in and of itself is not a bad financial tool. Now, there are some annuities out there that I wouldn’t touch with a 10-foot pole, but there are some really good ones that can add value to your retirement. The purpose of this series is to help educate people so they can understand enough to help identify good annuities from bad annuities because if 250-some billion dollars of these products are being sold, I haven’t found anyone out there that’s actually going through the educational approach on a mass distribution level, like I’m doing on the YouTube channel, to be transparent and lift the hood and help people learn the good from the bad.
I started to tell a story a few minutes ago before I kind of went off on a tangent there. I said we own an insurance agency, full disclosure, but when I first got into the industry annuities were a bad word, and I know for many of you annuities still are a bad word. I was the type of kid in high school– I remember this specifically. It was a 10th-grade trigonometry class. I was always really good at math, but one of the reasons I was really good was I asked a ton of questions. If I didn’t understand something, I wasn’t the kid who just sat in class and let it go by me without asking a question.

I struggle with trigonometry and what did I do? I start raising my hand and I just ask question after question after question. I’ll never forget the teacher, Mr. Dillingham, he’s had enough. He says, “Troy, that’s it. Detention.” He gave me a detention for asking questions. He thought I was trying to be funny or a class clown, and it’s just who I am. I can’t escape it. I’ve been like that my whole life, I always will be. It’s just part of what makes me who I am.

Happened to get in college. I actually had a hand injury so I was locked out of my apartment in college and I was trying to knock on the window. I knocked down a little bit hard and it broke, and I sliced two ligaments or two tendons in my hand. I had to have surgery. I was out for, I don’t know, about a week and I missed a couple of calculus classes. I come back in and calculus is hard enough, but I was behind, and you can’t get behind in calculus. If you miss a class everything compounds on top of one another. I was in an auditorium with 100 people, 200 people, and you know what? He said something I didn’t understand. I missed a little bit.

I raised my hand, I asked the question. Raised my hand again, asked the question. Even in a big room like that, that’s still who I am. Now he ended up saying, “Troy, just come see me after class. I’ll get you caught up,” and we ended up spending a week in his office getting caught up. Long story short, it’s who I am.

I get into the industry and annuities are a bad word. I’ve always heard they’re high fees, the insurance company keeps your money, they pay high commissions, they’re just not good tools. Me, being who I am, what do I do? I start calling the insurance companies. I start talking to everyone I can that sells these different products from the insurance companies. They have marketing and sales teams. I get on the phone with as high up in management as I could. I read the contracts, I read the brochures, I talk to agents that have sold them for a long time.

Finally, after about six months or so, I said, “Okay most of these products out here I still wouldn’t personally invest my money in, but I’ve come across some that you know what? If used properly inside a plan they could provide some value. As long as it’s clearly explained it’s part of a plan, that’s the big thing. It has to be part of a plan. It’s a tool. You wouldn’t use your fork to eat soup. You wouldn’t use your spoon to eat salad. If you just go out and buy an annuity and don’t understand how it works or how it fits into a broader plan with your stocks and your bonds and your real estate and your other assets, you’re making a mistake.

Then as the years have gone on, I’ve seen annuities purchased by clients put into portfolios as part of a plan. When we talk about the fixed annuities, the fixed indexed annuities, the ones that 100% protect your principal from market risk, no annual fees. I’ve seen people have double-digit returns with 100% safety of principal. I’ve seen people make 10%, 12%, 20%, even 25% in a single year. You could make 40%, 50% of the market upside with no downside risk, no annual fees, and then that interest that you’ve earned locks in and can never be lost in a year like this when the market’s down.

Now, do you put all of your money into something like that? No, you don’t. It’s a tool. It’s a part of the arsenal. It’s an arrow in the quiver. It’s something that can be used to compete with bonds and CDs. They’re not designed to replace stocks inside your portfolio. I launched this annuity series because that was my journey. It’s my personal story, it’s just who I am, but it’s also my journey in the industry from when I first got licensed to when I opened up my company in ’08, and to where I am now.

I do absolutely believe that the right annuity for the person who wants safety of principal, they want to make sure that they have enough, if something happens to them their wife will be okay or their husband will be okay, they don’t want market risk, they don’t like the volatility. A fixed annuity or fixed indexed annuity can play a valuable role in providing safe growth and also lifetime income.

Now, the YouTube series that we’ve launched, again, go to YouTube, search Oak Harvest Financial Group. I want to say close to 300 videos now. We’re launching this and we go through commissions. The average commission out there for annuities, anywhere from 2% to 7%. Some of them are higher than that even.

I talk a little bit about why some brokerage firms only sell annuities from one company. It’s because they get this kickback based on how much production they do with that one insurance company, so instead of spreading it around they’ll send it all to one. I talk about how much the actual agent gets versus the company. We go through all these things that you don’t know about annuities because I truly believe if you understand how it all works and can make good decisions, then you can decide on your own. That’s the future of this industry and that’s what I’m trying to do with the YouTube channel and also with the series.
If you want to have a conversation, go to the website oakharvestfinancialgroup.com, give me a call, 1-800-822-6434, but Oak Harvest Financial Group, go to the YouTube channel, check us out, and we look forward to seeing you soon.

Announcer: Investment advisory service is offered through Oak Harvest Financial Group, LLC. Oak Harvest Financial Group is an independent financial services firm that helps people create retirement strategies using a variety of insurance and investment products. Investing involves risk, including the loss of principal. Any references to protection benefits or lifetime income generally refer to fixed insurance products, never securities or investment products. Insurance and an annuity product guarantees you’re backed by the financial strength and claims-paying ability of the issuing insurance company.
Oak Harvest Financial Group, LLC is not permitted to offer, and no statement made during this show shall constitute tax or legal advice. You should speak to a qualified professional before making any decisions about your personal situation. We’re not affiliated with the US government or any governmental agency. This radio show is a paid placement.