The Getting Out Of Investment Jail Almost Free Card

Only in 403badlands could wealth subtraction lead to wealth addition.

The data proves this seemingly outrageous statement.

Don’t believe me?

There’s a reason, My colleague Nick Maggiulli is called Nicky Numbers.

Using his skills, he crunched the numbers on the average surrender fees teacher’s pay to get out of costly variable annuities.

The results were simultaneously mind-blowing and horrifying.

According to Nick, Insurers are doing teachers a massive solid by confiscating 10% of their wealth!

 If you were to invest over 30 years with a 5% annual return, you would be the same off staying in an annuity charging 2.25% as you would in a portfolio charging 0.5% after paying a 40% surrender fee!  That’s right.  You can start off with 60% of the money of someone else, but end up the same off simply because you paid so much less in annual fees.”

We always thought things were bad –  but not this bad.

Never in our wildest dreams did we think Insurers were acting as benevolent benefactors by implementing their egregious surrender fee schedules.

It turns out everyone with a long term time horizon should take this get out of jail almost free card.

Even a 55-year-old with a life expectancy of 85 would benefit. For younger teachers, this information is irrefutably life-changing.

We’ll let Nick have the last word.

After speaking with Tony about these results, he told me that he rarely sees surrender fees greater than 10%.  I was shocked by this.  Why?  Because these annuity products asking for a 10% surrender fee are giving you a bargain.  They are offering your money a way out of their maximum financial-security prison, so take it.  Pay the surrender fee and leave with a smile.  Your future self will thank you for doing so.

Read the rest of Nick’s groundbreaking post right here.

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Please see disclosures here.