Money Talks News may earn commission or revenue through links in the content below. Our editorial team independently selects all products. Compensation does not influence our recommendations.
A Rochester woman called The Ramsey Show with a question that should set off alarms for anyone near retirement: someone had promised to turn her family’s roughly $1 million into $2 million in “a couple years.” (1)
Co-host George Kamel didn’t bite. “I don’t trust anybody guaranteeing to double my money in a set time,” he said. (1)
Neither do I. I was a stockbroker during the 1987 crash, and I know how commissioned pitches get built. The more exciting the promise, the harder you should look at who’s getting paid.
According to 24/7 Wall St., the caller’s money came from her $250,000 traditional 401(k), her husband’s federal TSP and a recent inheritance. Her husband retires in February, and the pitch came over two Zoom calls. (1)
Pitches like this usually involve an insurance contract, often a fixed or indexed annuity. (1) Those products come with long surrender periods (2), caps on your gains (3) and, in many cases, an income rider whose growing number isn’t money you can actually withdraw. (4)
Here’s how the trick works, and how to spot it before you sign.
1. The “double” is usually a number you can’t spend
Most “double your money” annuity pitches lean on an income rider. The rider tracks what’s called a benefit base, which grows at an advertised “roll-up” rate, sometimes 7% or 8% a year. (4)
That sounds like a return. It isn’t. Kiplinger describes the benefit base as a phantom account that isn’t your real account value, and you can’t simply cash it out. (4)
Its main job is calculating the lifetime income you’ll get once you switch the rider on. Walk away, and you get the actual account value, minus any charges. And the rider itself typically costs around 1% a year. (4)
So when a salesperson says your money will double, ask one question: “Doubled in what account, and can I withdraw it?”
2. The handcuffs: surrender charges and capped gains
The SEC says indexed annuity surrender periods typically run six to 10 years or longer. (2) Pull your money out early and you’ll pay a charge, and FINRA warns you could lose part of your principal. (3)
The upside is limited, too. A cap sets the most you can earn. With a 7% cap, you’d get 7% even if the index climbed 12%. (3)
Participation rates trim gains further. At 75%, a 10% index gain credits just 7.5%. (2) Some contracts also subtract a spread fee from whatever the index earns. (2)
None of that makes these products illegal or always bad. But it’s hard to square with “double in a couple years.”
3. Follow the commission
Here’s what I learned selling investments: the product that pays the salesperson best is rarely the one that serves the client best.
24/7 Wall St. reports that commissions on a single-premium annuity commonly run 5% to 8% of the deposit. On $1 million, that’s $50,000 to $80,000, paid on day one. (1)
That explains the urgency, the two Zoom calls and the big round numbers. Kamel’s description fits: “insurance agents posing as wealth strategists.” (1)
FINRA says you should know how the person selling you an annuity gets paid, including whether it’s a commission and how much. (5) Ask directly. A reluctant answer is an answer.
One thing before we keep going — the financial world is louder and dumber than ever. Hot takes everywhere. Almost none of it is worth your time. I’ve spent 35+ years cutting through the noise so you don’t have to. Sign up for the free Money Talks Newsletter — 10 seconds, no spam, just the stuff that matters.
4. Run the Rule of 72
Divide 72 by an annual return and you get the rough number of years it takes to double your money.
Flip it around. Doubling in two years requires about 36% a year, according to 24/7 Wall St.’s math. Three years takes about 24%. Even five years needs about 15%. (1)
The S&P 500 has averaged roughly 10% a year over the long run. (1) And an indexed annuity, with its caps and participation rates, is designed to earn less than the index in strong years.
If someone promises what the stock market itself rarely delivers, with a guarantee on top, the guarantee is attached to something other than your cash.
5. Red flags, and how to check the salesperson
Watch for pressure to roll your entire TSP or 401(k) into one product, promises framed as guarantees, and “educational” dinner seminars.
Back in 2007, regulators examined 110 free-lunch seminars. Every one was a sales pitch, half used exaggerated or misleading advertising, and 13% looked fraudulent. (6)
Before you sign, look up the seller on FINRA’s BrokerCheck for licenses and complaints. (5) Indexed annuities are regulated by state insurance commissioners, so check the agent’s license with your state regulator, too. (2)
If you want backup, it’s worth looking at AARP.
Nearly any adult can join AARP, and members get the AARP Fraud Watch Network, retirement planning tools and discounts on things like eyeglasses, prescriptions and travel. At as low as $15 for your first year with auto-renewal, one use of a benefit can cover the cost.
6. What a TSP holder would be giving up
The caller’s husband has a federal TSP, one of the cheapest retirement plans anywhere. In 2025, total expenses ran about 34 to 51 cents per $1,000 invested, depending on the fund. (7)
Compare that with a 1% rider fee: $10 per $1,000, every year, before surrender charges. (4) Leaving the TSP should require a very good reason.
For money that isn’t in a plan, like an inheritance sitting in cash, low-cost do-it-yourself investing is an option.
SoFi Invest lets you start with as little as $5 and no account minimums, with commission-free stocks and ETFs or a ready-made mix that spreads your money across many companies. Fund with at least $50 and you can get a stock award worth $5 to $1,000. Check it out here.
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUEBrokerage and Active investing products offered through SoFi Securities LLC, member FINRA(www.finra.org)/SIPC(www.sipc.org).
7. When an annuity can make sense
To be fair, annuities aren’t all traps. A plain immediate annuity takes a lump sum and pays guaranteed income, typically starting within a month to a year. (5) For someone worried about outliving their savings, that can be valuable.
The key is simple and shopped: a product you understand, quotes from several insurers, and no pressure to decide on a Zoom call.
Before signing anything this big, get a second opinion from someone who doesn’t earn a commission on the sale. SmartAsset matches you, free, with up to three fiduciary advisors, who are legally required to put your interests first. Have $100K+ in investments? Get matched free in minutes.
The bottom line
Kamel is right. Nobody can reliably guarantee to double your money in a couple of years, and the people who say they can are usually talking about a number you can’t spend.
When you’re weeks or months from retirement, you’re the most attractive customer in the financial world. You have a lump sum, a deadline and a natural fear of running out.
That’s exactly why you should slow down. Ask what account is doubling, what it costs to leave and how the seller gets paid. Check the license. Get a second opinion from someone with nothing to sell.
A real opportunity will still be there next week. A sales pitch is the thing that can’t wait.
Sources: 1. 24/7 Wall St.; 2. U.S. Securities and Exchange Commission (Investor.gov); 3. FINRA; 4. Kiplinger; 5. FINRA; 6. U.S. Securities and Exchange Commission; 7. Thrift Savings Plan
Add a Comment