08/07/2026
This is what I am screaming!! DON"T USE BONDS and BOND FUNDS in your portfolios!!! It's Wall Street's LIE!!!!
# WHAT IS THE "SAFE" PORTION OF YOUR RETIREMENT PORTFOLIO REALLY COSTING YOU?
Many retirement portfolios allocate a significant percentage to bonds for **stability, diversification and reduced market risk**.
But there are two important questions every retirement investor should consider:
**1. What has my bond allocation actually earned?**
**2. What am I paying in advisory fees to own and manage it?**
# # THE FACTUAL 10-YEAR BOND RETURN DATA
The Bloomberg U.S. Aggregate Bond Index produced the following calendar-year returns from 2016 through 2025:
| Year | Bloomberg U.S. Aggregate Bond Index |
| ---- | ----------------------------------: |
| 2016 | +2.65% |
| 2017 | +3.54% |
| 2018 | +0.01% |
| 2019 | +8.72% |
| 2020 | +7.51% |
| 2021 | -1.54% |
| 2022 | **-13.01%** |
| 2023 | +5.53% |
| 2024 | +1.25% |
| 2025 | +7.30% |
**10-Year Annualized Return: approximately 2.01%**
Over those ten years, **$100,000 would have grown to approximately $122,000** before considering any advisory fee that may have been charged on those assets.
# # NOW COMPARE THAT WITH A HYPOTHETICAL FIXED INDEX ANNUITY STRATEGY
Consider an S&P 500 annual point-to-point Fixed Index Annuity illustration with:
**0% floor**
**100% participation**
**10% annual cap**
**No spread or strategy fee**
Using the S&P 500 price-index returns for the same calendar years, the hypothetical FIA crediting results would have been approximately:
| Year | Bond Index | S&P 500 Price Return | Hypothetical FIA Credit |
| ---- | ----------: | -------------------: | ----------------------: |
| 2016 | +2.65% | +9.5% | **+9.5%** |
| 2017 | +3.54% | +19.4% | **+10.0%** |
| 2018 | +0.01% | -6.2% | **0.0%** |
| 2019 | +8.72% | +28.9% | **+10.0%** |
| 2020 | +7.51% | +16.3% | **+10.0%** |
| 2021 | -1.54% | +26.9% | **+10.0%** |
| 2022 | **-13.01%** | -19.4% | **0.0%** |
| 2023 | +5.53% | +24.2% | **+10.0%** |
| 2024 | +1.25% | +23.3% | **+10.0%** |
| 2025 | +7.30% | +16.4% | **+10.0%** |
# # # THE 10-YEAR RESULT
**Bloomberg U.S. Aggregate Bond Index**
$100,000 โ approximately **$122,000**
Annualized return: approximately **2.01%**
**Hypothetical 0% Floor / 10% Cap FIA**
$100,000 โ approximately **$213,000**
Annualized credited return: approximately **7.88%**
This historical-period illustration also highlights an important distinction: in 2022, when the Bloomberg Aggregate declined **13.01%**, the hypothetical FIA strategy would have received a **0% credit rather than participating in the index decline**, subject to the assumptions above.
# NOW CONSIDER THE COST OF A 1% ADVISORY FEE
If you're paying an advisor approximately **1% annually** on the portion of your retirement portfolio allocated to bond funds, that fee can consume a meaningful percentage of an already modest return.
But the bigger issue isn't simply the fee you pay this year.
# # IT'S THE OPPORTUNITY COST OF THAT MONEY OVER TIME.
Every dollar removed for fees is also a dollar that can no longer compound for your retirement.
To illustrate the effect, assume an investment earns a hypothetical **5% gross annual return for 20 years**. Compare that with a hypothetical **4% net return after a 1% annual fee**:
| Starting Allocation | 5% - No 1% Fee | 4% - After 1% Fee | 20-Year Difference |
| ------------------- | -------------: | ----------------: | -----------------: |
| $250,000 | $663,324 | $547,781 | **$115,543** |
| $500,000 | $1,326,649 | $1,095,562 | **$231,087** |
| $1,000,000 | $2,653,298 | $2,191,123 | **$462,175** |
# # # THINK ABOUT THAT.
On a **$500,000 allocation**, a 1% annual difference in net return compounds to approximately:
# $231,000
of ending-value difference over 20 years.
On **$1 million**, the difference grows to approximately:
# $462,000
That's why seemingly small annual fees can potentially translate into **hundreds of thousands of dollars over a 20-year retirement**.
# COULD AN FIA PLAY A ROLE IN YOUR "SAFE MONEY" STRATEGY?
Certain traditional Fixed Index Annuities can provide:
โ **0% floor** against negative index performance
โ Growth potential linked to an index such as the S&P 500
โ **No separate 1% annual advisory fee deducted from contract value** in many traditional commission-based FIA structures
โ Tax-deferred accumulation
โ Insurance-company guarantees
This doesn't mean an FIA should automatically replace a bond portfolio. Bonds and annuities are fundamentally different financial instruments and have different liquidity, income, taxation, risk and estate-planning characteristics.
But it does raise an important retirement-planning question:
# "WHAT IS MY SAFE MONEY ACTUALLY EARNING AFTER FEES?"
And perhaps an even more important one:
# "WHAT COULD THOSE FEES - AND THE LOST COMPOUNDING ON THOSE FEES - COST ME OVER THE NEXT 20 YEARS?"
For retirees with substantial assets allocated to the conservative portion of their portfolios, the answer could potentially have a meaningful impact on **retirement income, portfolio longevity and the wealth ultimately transferred to their families.**
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**Important Disclosures**
This material is for educational and illustrative purposes only and is not a recommendation to purchase or sell any security or insurance product or to replace bonds with an annuity.
The Bloomberg U.S. Aggregate Bond Index is an unmanaged index and cannot be invested in directly. Historical index performance does not reflect investment-management fees, advisory fees or other expenses that may apply to an investor's actual portfolio.
The FIA example is hypothetical and does not represent the historical performance of a specific annuity contract. It assumes annual point-to-point S&P 500 price-index crediting, a 0% floor, 100% participation and a constant 10% annual cap. Actual annuity caps, participation rates, spreads, crediting methods and other terms vary by product and can change.
Fixed Index Annuities are insurance contracts and do not directly invest in the S&P 500 or other market indexes. They may be subject to surrender charges, withdrawal limitations, market value adjustments, rider charges and other contract provisions. Guarantees are subject to the claims-paying ability of the issuing insurance company.
Traditional commission-based FIAs may not deduct a separate annual advisory fee from contract value; however, compensation, product economics and advisory arrangements vary. Fee-based annuities and some advisory relationships may involve advisory fees.
The 20-year fee example is hypothetical and assumes a constant 5% gross annual return compared with a 4% annual return, representing a 1-percentage-point annual difference, compounded for 20 years. It is intended solely to demonstrate the mathematical effect of compounding and does not represent the performance of bonds, an FIA or any particular investment.
Past performance does not guarantee future results.
