#182 Are Annuities Really a Bad Deal for Physicians?

Nobody books the all-inclusive because the food is better.
They book it because it takes the risk out of the trip. No bad rental in the wrong part of town and no hour-long drive to anything worth eating.

An annuity is the all-inclusive resort of retirement.

The right side of the menu is blank, but it’s “would you like fish or chicken” for seven days, and the pre-packaged excursions are the closest thing to spontaneity you will get all week (ask me about the fish bowl my son and I “snorkeled” in at the Aulani hotel in Hawaii last year).

The bracelet they snap on at check-in also doesn't come off, and the money you already paid isn't coming back on the night you'd rather drive into town for tacos.

Being worry-free about prices all week is not the same as the week being cheap. You paid for every one of those meals before you got on the plane, and you paid extra for the part where you don't have to think about it.

Guarantees have a price, so what does handing that risk over actually cost your family?

This week we go through what an immediate fixed annuity actually is: what the buyer hands over, what the insurance company takes on, and where the money goes at the end.

We also answer your colleagues' questions.

An Internal Medicine Doc in Oregon asks, “If we make a $125k contribution to our child's 529 account, will we owe gift taxes?”

A double-doc family in Texas says, “We are currently renting but want to buy a home in the near future. We also have ~$150k of federal student loans and are not pursuing PSLF. Should we use extra cash to save for a down payment or should we pay off our loans quicker?”

Are you ready to turn worries about taxes and investing into a plan for college and retirement? If you’re evaluating your options and want to learn more, visit physicianfamily.com and click 'Get Started' or you can ask a question of your own by emailing podcast@physicianfamily.com.

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