Why Annuities Usually Don't Make Sense and Market Reality Check
Aug 29, 2025
Dive into the complexities of annuities and discover why they often fall short, from pesky fees to flexibility issues. The hosts tackle recession fears while markets soar, exploring the paradox of high valuations. Is the AI trade really fading? They debate this along with a controversial government stake in Intel, weighing the lines between socialism and smart policy. Plus, enjoy some light college football banter, keeping the conversation both engaging and insightful.
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Annuities Defined And Their Complexity
Annuities are contracts where you hand over money to an insurer in exchange for a guaranteed income stream.
Adam Newman warns these products are highly complex, varied, and often more expensive than alternatives.
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Preserve Liquidity Over Guaranteed Paychecks
Avoid annuitizing money if you value liquidity and may need lump sums for large or unexpected expenses.
Adam Newman emphasizes losing flexibility is a major downside of handing cash to an insurer.
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Hidden Opportunity Cost Of Guarantees
Insurance companies earn a spread when they invest your lump sum, reducing what you ultimately receive.
Andy Pratt explains annuity payouts often trail what a prudent investor could earn, creating a hidden opportunity cost.
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College football season is starting, but Adam and Andy are more excited to tackle annuities (sort of). They explain why these "guaranteed income" products usually don't make sense, from hidden costs to lost flexibility to expensive fees.
Plus, they address recession fears while markets sit at all-time highs, discuss whether the AI trade is really dead, and debate the government's controversial stake in Intel.
We cover:
Why annuities are complex, confusing, and expensive
The hidden opportunity cost of "guaranteed" income
When annuities might actually make sense (spoiler: rarely)
Why recession predictions keep missing the mark
The stock market as collective wisdom of millions of investors
Whether the AI trade is really losing steam
US government taking a 10% stake in Intel - socialism or smart policy?
⏱️ Timestamps:
(00:34) College football season and annuities vs. madness
(02:21) What annuities actually are and the guaranteed income pitch
(06:28) The flexibility problem with handing over your money
(08:08) Hidden opportunity costs that annuity salespeople won't mention
(12:52) Variable annuities and the "no free lunch" principle
(14:40) When annuities might actually make sense
(15:50) Recession fears and why betting against the US keeps failing
(18:06) What the stock market really represents
(24:00) Is the AI trade dead after one week of declines?
(29:03) US government takes 10% stake in Intel - good or bad?
The Burney Company is an SEC-registered investment adviser. Burney Wealth Management is a division of the Burney Company. Registration with the SEC or any state securities authority does not imply that Burney Company or any of its principals or employees possesses a particular level of skill or training in the investment advisory business or any other business. This content is for informational and educational purposes only. It is not intended as personalized investment advice or a recommendation.
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