Welcome to Money As If, the fully paid off loan on your five-year-old vehicle with less than 30,000 miles on it.

Today’s interests:

— Jeanine

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A notion I’ve qualitatively encountered during my recent conversations with financial experts and friends — as in, “my clients are interested in annuities,” or “these days, I tell my clients to buy annuities,” or “should I have this thing called annuity? — and quantitatively backed by new data.

Total U.S. annuities hit a record-high $223 billion in the first half of 2025, according to LIMRA (the Life Insurance Marketing and Research Association). But …

For the uninitiated, annuities are a financial product sold by insurance companies that promise a guaranteed income, typically during retirement.

How they work: You give the insurer money, usually in the form of a lump sum payment, and it pays you back later in regular intervals (monthly, annually, etc.) for a specified time, or even for the rest of your life. (Insurers use mortality tables to estimate how long you’re likely to live and, as a result, what your payments should be to guarantee that income.)

Beyond a dedicated income stream, annuities have few key benefits — namely, they earn tax-deferred interest. The exact interest you’ll earn depends on the type of annuity you buy. Fixed annuities let you lock in a rate, while indexed and variable annuities are market-based, but the idea is that you’re getting some sort of return on the initial investment.

Annuities are popular right now largely because inflation is high, people are living longer, and pensions have effectively ceased to exist.

“Our clients who retired in 2010, expecting 15 years of retirement, are now in year 14 and panicking about outliving their money,” explains Griff Harris, Certified Insurance Counselor (CIC) and CEO of Griffith E. Harris Insurance Services.

Plus, fixed annuity rates, in particular, are largely based on current bond yields and economic conditions, including Federal Reserve policy. As goes the federal funds rate, so do fixed-income investments.

And right now, “there is a lot of pressure to lower interest rates,” says Troy Thompson, wealth advisor with Wealth Strategies Advisory Group. “Lower interest rates will lower indexed credit limits on annuities, and will lower the guaranteed income on income annuities.”

So people are trying to lock in favorable rates before something changes.

That depends on how worried you are about retirement income, and, honestly, your age. Annuities are most often considered a good option for people between ages 50 and 70 who are worried about retirement and market volatility or looking for new ways to maximize tax-deferred income.

Young or middle-aged investors, meanwhile, can often receive a better return on stocks, exchange-traded funds, and 401(k) retirement investments. The best fixed annuity rates, for instance, run around 5% right now, whereas the average annual stock market return rate is around 7%, when adjusting for inflation.

Plus, variable and indexed annuities can get complicated, and there are often fees involved, so you don’t want to blindly sign up for one just because of a vibe.

“Caution is always warranted with annuity products," argues Joseph M. Favorito, certified financial planner (CFP®) and managing partner at Landmark Wealth Management, LLC. “If you want an honest opinion, speak to a true fiduciary that is not receiving any compensation from the sale of a product, and they can help you evaluate the pros and cons of any investment vehicle.”

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This is not the first courtesy (?) letter Mazda has sent me advertising that I’m close to paying off my auto loan — and, given that I still have (now) 11 payments, I expect it won’t be the last, so I’m taking the whole “offer expires August 31” angle with a grain of salt.

Not that I’ll be coming in to get a new car in September, October, November, etc. either. One of the reasons I’ve bought my cars (as opposed to leasing) is because I like the idea of spending at least a few years without a monthly auto payment. (The other reason is that I have a bad history of, at best, banging up, and, at worst, losing my hubcaps.)

Of course, it doesn’t help that the car they’re pitching me, the 2025 Mazda CX-5 2.5 Turbo Signature AWD, starts at $42,295 or that new auto loan rates are currently at 7.23%. (FWIW, we have 0.9% APR on the nearly-paid-off car note on our 2021 Mazda CX-5 Signature, which we got a great deal on during the COVID-19 pandemic.)

Plus, I can’t even imagine what a shiny new car in New Jersey would cost to insure. (I only just comparison-shopped my way to a reasonable monthly Geico payment!)

Still, I recognize Mazda’s game. The “Account Notification” framework got me to read the solicitation, and the “freedom from worry” was a nice try, even though most people know extended dealership car warranties are largely worthless. I also happen to know, as a repeat Mazda buyer, that the $1,000 loyalty credit is pretty much available anytime you buy your second, third, or fourth vehicle.

But, hey, can’t fault Mazda Matt or Trudi for trying!

Nowadays, most financial takes are boilerplate. These aren't.

And, finally, today, in things I would buy if I could, you know, just buy things …

I was tempted, so tempted, to share a pick of Taylor Swift’s newest bling, given her engagement to Kansas City Chief Travis Kelce was, in fact, the biggest story of this week, and her custom-made, probably 8-carat old mine diamond ring costs either $250,000, $550,000, $1 million, or maybe, $5 million, depending on who you ask Plus, I had this fun callback ready about a how a guy’s gotta make so … many … commercials. (No?)

But we just talked about T-Swift’s rich girl sh*t last week and you’ve probably all seen those Instagram pics ad nauseum at this point, so, you know what? How about we all just look at this $1,000 Fendi hat, instead?

Got questions, comments, receipts, tips, thirst traps, etc. you’d like to share? Send them to [email protected].

_{This article is for educational purposes only. We don’t recommend or advise individuals to buy, not buy, sell, or not sell particular investments or other assets, as everyone’s circumstances are different. Also, it’s your money and ultimately up to you to decide the best use for it.}