Coasting in Retirement – Episode 76
Happy New Year, Gulf Coast friends! Whether you’re dreaming of sandy beaches with your toes in the sand, weekend road trips, or more precious time with family and grandkids, the start of 2026 is the perfect time to take a clear-eyed look at how your retirement savings are really working for you.
Josh Null (host of Coasting in Retirement and owner of Gulf Coast Financial Advisors) was joined by co-host Michelle Lee Melton-Null to compare real-world performance of popular Fixed Index Annuities (FIAs) versus professional advisory investment accounts. They pulled actual contract data (with zero personal details shared) and gave listeners a transparent, no-spin look at what’s actually happening with these products. Here’s what stood out… and what it means for your retirement.
The Great Annuity Debate: Promises vs. Reality
Fixed Index Annuities continue to be heavily marketed along the Gulf Coast, especially during “free steak dinner seminar” season. Josh and Michelle decided to move past the sales illustrations and look at actual contract performance over the past two years, a period when the S&P 500 delivered strong gains.
The results were eye-opening.
- Example 1: A Fixed Index Annuity funded with roughly $750,000, tracking the S&P 500 with a 5.75% cap. Over two years, it gained only about $23,000, roughly 1.5% per year. During the same period, the S&P 500 was up over 40% total.
- Example 2: Another contract funded with about $500,000 gained only $7,500, again around 1.5% total over two years (¾ of 1% annually).
Even with strong market years, these annuities dramatically underperformed. Why? High income rider fees (often 1%+), caps on upside, and complex crediting methods that limit real gains.
Josh was clear: “If these products were sold strictly for capital preservation and future income guarantees, that’s one thing. But they’re often sold as ‘all upside with no downside’ and market-beating potential. That’s where the disconnect happens.”
Important Lessons About Surrender Periods and Commissions
Longer surrender periods (often 10 years) usually mean higher commissions to the seller — and lower net returns for the client. When Josh looked at similar 5-year surrender FIAs, the numbers improved modestly (4.2% to 7.1% total returns), but they were still far below what a conservative or moderate advisory portfolio delivered in the same period.
Key Takeaway: If you’re considering an annuity, shorter surrender periods (ideally 5–7 years max) generally make more sense. Longer lock-ups benefit the salesperson more than the client.
Advisory Investment Accounts: Fiduciary, Transparent, and Performance-Focused
On the other side of the ring is the fee-based advisory account. These accounts operate under a fiduciary standard, meaning the advisor is legally required to put your best interest first. You pay a transparent annual fee (often around 1% AUM) with no commissions on trades.
Even conservative and moderate risk portfolios should have delivered double-digit returns over the past couple of years thanks to strong market performance. The key advantages?
- Full participation in market upside (no artificial caps)
- Tax-efficient strategies like tax-loss harvesting
- Ongoing, discretionary management by a professional
- Holistic financial planning that goes far beyond investments
Headlines of the Week Highlights
Michelle shared several timely articles, including warnings from Stan the Annuity Man about “don’t buy the story” sales tactics at dinner seminars, a NerdWallet report on advisor fees, and a Morningstar deep-dive exposing aggressive back-tested illustrations using exotic, made-up indices.
The consensus? Illustrations are marketing tools, not guarantees. Always focus on the contractual language, not the colorful “what if” projections.
Looking Ahead with Josh: Crypto vs. AI
In the final segment, Josh revisited his 2024 predictions. He was highly skeptical of crypto as a retirement asset and much more bullish on Artificial Intelligence as a structural shift. Two years later, Bitcoin has been extremely volatile (hitting highs above $126k before crashing ~50%), while companies powering the AI boom (like Nvidia) have seen massive gains.
His updated view: Crypto remains speculative. AI is becoming infrastructure.
Wrapping Up: Choose Transparency and Real Performance
Josh and Michelle aren’t against all annuities; properly used, some can play a role in income planning. Their concern is how many are sold with unrealistic expectations. If you’re wondering whether your current retirement strategy is truly working for you, or if you’re sitting on an annuity that isn’t performing as promised, now is a great time to get a second opinion.
Let’s Talk About Your Retirement Plan
If you’re thinking about your investments, annuities, advisory accounts, or simply want to know if your plan is positioned for the years ahead, we would love to talk.
You can reach us at 251-327-2124, or visit gulfcoastfa.com and click the blue button in the upper right-hand corner to schedule a meeting. We offer:
- 15-minute introductory calls
- 30-minute Zoom meetings
- In-person meetings at our offices in Fairhope, Orange Beach, or Mobile
No pressure. No obligation. Just a clear, professional conversation. Here’s to a strong, well-protected 2026, full of confidence and financial peace of mind on the Gulf Coast.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.