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Don’t Let Your Emotions Drive Your Financial Choices
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Dave in Chicago: Long-Term Care Annuity — Run Away
At 1:28:40 · chapter starts 1:24:30
Dave from Chicago is 62, single, living with his elderly parents, and has quietly accumulated roughly $600,000 across an IRA, a 401(k), and savings accounts — almost entirely in the last four years. His investment advisor, who calls herself a fiduciary, recommended a long-term care annuity. Dave Ramsey delivers one of his most detailed explanations of the annuity landscape: fixed annuities are just bad savings accounts, variable annuities are acceptable (mutual funds in a tax-deferred wrapper) but almost always sold by life insurance agents posing as real advisors, and bundling any product with long-term care insurance is a financial abomination that only benefits the insurer. For this caller specifically, the math is irrelevant — $600,000 at market rates doubles to $1.2 million by age 69 without adding a dollar, far exceeding the $200,000–$300,000 typical nursing home exposure. He should self-insure and, if he wants long-term care coverage, buy a standalone policy — never bundled. Dave's disdain for life insurance agents calling themselves fiduciaries is barely contained.
Research cited by Dave shows that married couples over a 40–50 year span report significantly higher wealth, better life satisfaction, and longer lifespans than unmarried peers.
