All Annuities are NOT created equal!! —  Learn About Annuity Types

There are 4 basic types of Annuities. This site is primarily concerned with the annuity types that can;

  1.  Be utilized to anchor a retirement by providing stable income to supplement social security without market risk.
  2.  Provide income that would otherwise be taken from an investment portfolio so that investments can be left to grow for discretionary use or for heirs, philanthropic goals, or other such needs like education of grand-kids.

This site is not interested in high fee annuities that are marketed as stock market substitutes such as variable annuities. The reality is that in many cases the fees on variable annuities and variable type products can be so high they offset whatever protections they may afford.

Regardless, here are the basis annuity types:

1. Fixed AnnuitiesUnlike variable annuities, a fixed annuity has no component tied to the stock market. Instead, it’s a relatively simple annuity that behaves a bit like a CD or low interest rate bond, minus any market risk. In essence, you make a payment to the fixed annuity provider and in return, based on your age and the size of the payment, you receive a guaranteed income for life which you may start immediately or defer. Once you begin taking the income, it never changes.

  • Who benefits from Fixed Annuities?
    • Those who want a predictable, fixed income to supplement other sources of retirement income.
    • Those who have a real fear of running out of money in retirement and need to make sure they have at least some money coming in no matter what.
    • Those who need to convert assets to income in the near term.

2. Fixed Index Annuities (“FIA”) – these are a sort of hybrid between a fixed annuity and a variable which can feature the best traits of both. Like a fixed annuity they generally have low fees and guarantees on income and crediting (which is how the income base in the annuity grows), and like variable annuities they have a relationship with the stock market. However, this investment is indirect and the investment risk is taken on by the insurance company, not by you or your annuity. The right fixed index annuity may be one of the best possible solutions in the fixed income world for many retirees.

Like a fixed annuity, an FIA guarantees a base income throughout your life. Unlike a fixed annuity, the market component of the FIA makes it possible for your income to grow over your lifetime rather than being stuck as a specific level forever.

An added benefit – most FIA’s feature income that can only go up – so if it increases in any given year, that year’s income is your new base income forever after.

Fixed Index Annuities solve a lot of problems – they generate income that may be capable of keeping up with inflation, income can “step up” but not “step down”, and they do so without risking your principle in the stock or bond markets.

Over time, the payouts from a Fixed Index Annuity can far exceed the initial cost of purchase.

  • Who benefits from Fixed Index Annuities?
    • Investors who are not comfortable with the current risks in bonds but who need to have a stable fixed income component to their portfolios now or in the future.
    • Investors that need a fixed income component in their retirement portfolio capable of keeping up with inflation that is not subject to stock market loss.
    • Investors who are not able to tolerate the volatility of stock market investments at all, but still need growing income.
    • Investors who are looking for a growing income stream in order to allow their stock market investments to compound for longer time periods due to future discretionary spending goals, legacy goals, charitable giving or other priorities.

3.  Variable Annuities – great money makers for financial sales people, not so good for the purchasers. In a variable annuity, you buy the annuity and choose from a number of investments, typically mutual funds, many of which also carry pretty heavy fees.  Advantage of a variable annuity:

  • Tax deferred growth

That advantage can be outweighed by the amazing fee level most of these things have, particularly given other tax efficient alternatives like Flat Fee Variable Annuities.

4.  Flat Fee Variable Annuities — these are the best solution offered in the variable universe and in point of fact are only available at 4 or 5 companies. Like a regular variable annuity, they give you the ability to defer taxes on stock market investments. Unlike a variable annuity, they are not stacked with damaging fees.  Flat Fee Variable Annuities can cost as little as $250 a year in fees to the provider, vastly less expensive than a standard variable annuity.  Make no mistake – the mutual funds and ETF’s you can invest in have management fees, but typically these structures don’t include sales loads, admin fees, and the other things regular variable annuities sneak in.

  • Who does a Flat Fee Variable Annuity Fit?
    • Wealthy individuals, trusts or families that want to invest significant monies in the stock market on a tax deferred basis for extended time horizons.


Need Help Finding An Income Solution That Fits? —> CLICK HERE
Want to learn more about Fixed and Fixed Index Annuities? —> CLICK HERE

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Reports prepared by financial planners licensed in your state. Planners must be licensed and registered fiduciary Investment Advisors. Rate quotes provided by licensed insurance agents in your state. By completing the form above and requesting information, you are giving permission to contact you to verify your information and to obtain rate quotes on your behalf from insurance agents licensed in your state. Copyright 2015 Real Retirement Income.COM.

Investment Management

For ACI, investment management begins with understanding and actively managing risk for our clients and partners.  We do this through smarter investments built on low cost, highly liquid and diversified investments rather than expensive financial products.


Understanding the needs of investors seeking stable results for portfolios greater than $500,000 is a core strength of ACI.  One of the most important things we do is help your investments to create stable income while generating sufficient growth to meet your future demands and the needs of those you care for. 

ACI uses customized planning and software to create retirement income plans to meet the specific needs of each of clients while providing confidence, flexibility, and cost efficiency.


Success in any endeavor comes from hard work, vision, and planning. We can help you create a more confident future by working with you, your CPA, your tax and estate counsel to make sure that when the tomorrow becomes today, you are where you want to be.

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Market Income

This portfolio invests in a basket of highly liquid Index or Sector securities and sells off atypical returns in exchange for a premium on a rolling basis. That’s a fancy way of saying we take the bird in hand and let someone else have the two in the bush.  We buy sectors that are undervalued relative to the rest of the market or vs. their historical value ranges which reduces downside risk vs. the broad market.  Typically out-performs in bear markets, neutral markets and mild bull markets, and under-performs strong bull markets.

Core Equity

Invests in diversified components of the financial markets and broad economy by targeting sectors which demonstrate the greatest potential for a consistent range of multi-year returns, while offering a risk adjusted investment profile equal to or lower than the broad markets.  Our research tells us which sectors demonstrate the greatest potential for consistent multi-year returns while offering greater risk efficiency than the broad markets.  We invest on an “Outcome Oriented” basis – meaning we have a good idea what the returns over time will be at a given purchase price.

Durable Opportunities

This portfolio invests in companies possessing a Durable Competitive Advantage.  Such companies are likely to be around for decades, easing the concern of principal return.  DCA companies often suffer less in bear markets and usually lead recoveries.  These companies allow ACI to build portfolios with minimum expected returns that can be in the mid-single digit range over any 3-5 year period which can provide long term stability partnered with long term growth in equity.

Full Cycle

This portfolio is derived from the ground breaking work in ‘risk parity’ by Ray Dalio, arguably one of the top 10 money managers in history and founder of Bridgewater Associates.  The Full Cycle portfolio is built on the allocation models Ray designed to provide the highest potential risk adjusted returns possible through all phases of the economic cycle.  Bridgewater’s “All Weather” fund was designed for pension funds and other large institutional investors that needed to earn stable returns with stable risk, and has been closed to new investors for years.  At the time the fund closed, the All Weather Portfolio had a minimum required investment of $100 million.

Equity Builder

This is a risk management overlay which helps build and protect accounts by collecting small premiums against held positions on an opportunistic basis during correcting markets through synthetic “short” positions.  EQB seeks to collect an extra 2% – 5% per year against the cost of underlying investments.  While primarily targeted at increasing account equity, EQB gives an extra layer of protection to capital during periods of higher volatility.

Fixed Income

Diversified, broad exposure to fixed income ETFs and best of breed no load funds including core fixed income components such as Government, Corporate or MBS, municipals, and unconstrained “Go Anywhere” funds.

Investment Team


Dak Hartsock; Investment manager with over 15 years of experience with securities & securities options. Dak has worked full time in the financial markets since 2007. He has more than a decade of operating experience as a business owner & developer. He is a graduate of the University of Virginia.

Robert Hartsock; MBA. Bob has over 30 years of senior management experience in diverse markets, products and businesses. He brings an exceptional record that includes management roles in two Fortune 500 companies and leadership of 7,500+ employees. Bob’s career features a specialization in identifying and fixing management and operational problems for multiple companies including leading over a dozen acquisitions, private placements and a public offering. He is uniquely positioned to provide ACI with highly relevant C-Level management perspective. Bob provides operational & macro perspective on investments ACI undertakes for client portfolios. Bob holds degrees from University of Illinois and University of Washington.

Process Portfolios is a dba of ACI Wealth Advisors, LLC.

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