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Just Buying an Annuity is Like Buying New Golf Clubs in Hopes of Lowering Your Score

Phil CalandraBy Phil Calandra in Atlanta, GA

If you buy an annuity, with no regard to how it fits into your overall financial plan, you’d be making the same silly mistake.  Now, in defense of modern technology in the golf industry, a graphite or titanium shaft club is certainly better than an ole’ hickory stick.

You may need an annuity in your retirement “bag”.  However, putting the wrong annuity in place could cost you your best retirement.  Unlike golf, which is merely a game, how you manage your retirement finances is not simply another “round”.   You only get one chance to do retirement well.  There are no mulligans.  And choosing the wrong annuity could be a “shank”.

An annuity contract comes in various forms and has varied purposes.  So it is like having a driver in your bag versus a sand wedge.  Without the proper understanding of how each financial instrument fits, you may end up with the wrong bag of clubs to play your best game.   Everyone has a different looking retirement.  The type of financial assets you need will certainly be different than some else.  The reality is some pre and post retirees may have no use for an annuity in their arsenal.  Just like a novice golfer may have no need for a two iron or a senior golfer may need a stand-up putter.

Depending on your financial position in retirement, you may have an income gap.  Which is simply a shortfall in the amount of monthly income coming in versus the monthly income going out.  Many people choose to close that income gap with an annuity using a guaranteed income provision.   Given the state of the economy, and the wild gyrations on Wall Street, some may utilize an annuity to provide safety to their principle, giving them peace of mind and a sense of comfort with the remainder of their retirement assets that are invested elsewhere.

The point to remember is this.   You need golf clubs to play a round of golf.  And you will likely need financial “clubs” or products to live your retired years.  You will do far better in retirement if you understand what each financial “club” is used for and have designed your game to get maximum use out of all of them.  Just like going to the practice range, or investing in golf lessons would do more for your golf score and enjoyment.  Sorry fellas, buying new clubs every other year isn’t going to help you break 80.

About the Author

Phil Calandra is a nationally recognized financial coach, author and commentator.  He is Co-founder of Metro Atlanta based Calandra Financial Group, LLC.  Phil has been featured on CBS, NBC, and Fox News and is a frequent contributor to the financial press and radio.  If you have questions about your current financial situation, contact Phil directly at  You may also inquire about the firm’s “Results In Advance Financial Planning” process.

Click here to or on the video below to watch Phil explain this illustration in person.

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