‘Run, Janet, Run’: Wes Moss to Kentucky Retiree Whose Advisor Wants $350,000 in a 7-Year Annuity

“An insurance company could theoretically base the return you get on anything: the number of leaves that fall off a tree in autumn, capped at three.”

Wes Moss said that on the October 13, 2026 episode of The Clark Howard Podcast. He was answering a Kentucky listener named Janet. Before the leaves line, he gave his opinion on her advisor’s pitch: “Run, Janet, run. The claims that it’s invested in the S&P 500: incorrect. No cost: false. No penalty: false. All of those are wrong. That’s why annuities get a bad rap.”

A $350,000 Pitch Resting on Three Claims

Janet told the show she has $1 million in her IRA. Her advisor wants 35% of it, about $350,000, in an “Opti Blend” fixed indexed annuity for seven years.

The rest would go 45% to stocks and 15% to bonds.

The pitch, as Janet described it, promised no cap, no management fee, and money “invested in the S&P.” That is her account of the proposal, and this article assesses those claims. A seven-year lockup covers a large share of a retiree’s remaining healthy years, and getting out early costs real money.

Moss Has This Right, and the Math Proves It

A fixed indexed annuity is an insurance contract. Moss explained that the money sits in the insurer’s general account. A formula references the S&P 500 and caps the credit you receive at set amounts each month. Your return comes from that formula, which explains his leaf analogy. The index is only a measuring stick.

He also raised a big commission and a lockup that runs “usually seven years or more.” Surrender charges vary by contract. As an illustration, a 7% charge on $350,000 costs $24,500 if Janet needs the money early.

Now compare the alternative. The SPDR S&P 500 ETF (NYSEARCA:SPY) charges an expense ratio of 0.09%. On $350,000, that works out to about $331 a year.

The fund’s share price is up about 16% over the past year and about 73% over five years, before dividends.

Run that five-year gain on Janet’s $350,000 and it becomes $604,170. A capped formula exists to clip runs like that. In good years, the insurance company keeps the gains above the cap.

Your Real Benchmark Is a 5% Treasury

This trade depends on how the annuity’s credited return compares with the risk-free rate. The 10-year Treasury yields 5.2%, backed by the U.S. government and marketable any day.

Assume, for illustration, that Janet’s formula credits an average of 4% a year. After seven years her $350,000 grows to about $460,576.

Locking in a yield near 5.2% instead produces about $499,421. That is roughly $38,845 more, with full liquidity.

Readers can run their own balance against the same 5.2% yield for seven years:

If stocks average an example 10%, the same money makes about $682,051. That beats the annuity case by around $221,475. The annuity wins only if its credits beat Treasuries after the lockup, which high rates make harder.

Moss has said this himself about guaranteed products: “It’s a different story today where a Treasury bond yields 5.25%. Does 6.8% feel as enticing? It’s less enticing to me these days.” Moss takes listener questions at wesmoss.com/ask, and lays out his retirement framework in The Retire Sooner Method.

He also raised counterparty risk. The guarantee is only as strong as the insurer. A Treasury has the government’s backing.

Steps to Take Before Signing Anything

1. Get the surrender schedule in writing. Ask for the percentage charged in each year of the contract. Multiply each year’s rate by your deposit so you can see the actual dollar cost of getting out early.
2. Request the cap and participation rate. Ask how often the insurance company can reset them. A cap that drops after year one changes every projection the sales rep showed you.
3. Ask for the commission figure. Have the advisor state what they earn on the sale. Compare it with the fund’s roughly $331 annual cost on the same money.
4. Price a Treasury ladder. Check current yields on TreasuryDirect for 1 to 7 year maturity dates. If guaranteed government yields match the annuity’s realistic credit, the lockup buys you nothing.
5. Confirm fiduciary status. Moss told Janet to find a fiduciary, someone legally required to put her interests first. Ask for that commitment in writing for this specific recommendation.

A guarantee is only worth buying when it pays more than the risk-free rate you can already get without a seven-year lockup. (For a wider look at building retirement income without annuity lockups, we made the case for an income-first approach in this free report.)

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