3 Years in or 3 Years Out for MYGAs and CDs: Shootin' It Straight With Stan (TAM Classic)

Welcome to Shootin' It Straight with Stan. I'm your host, Stan The Annuity Man, America's annuity agent, license in all 50 states. I'm so glad you're here. Today's topic is 3 Years in or 3 Years Out when looking at fixed rates. My rule is that if it's three years or in, you're buying CDs and Treasuries. If it's three years in out, you're buying Multi-Year Guarantee Annuities, Fixed Rate Annuities, the annuity industry version of a CD. Of course, I don't sell Treasuries or Certificates of Deposit CDs, but I love them. I'm okay with you buying that and not buying stuff from us. That's fine. It's okay. As long as you're buying contractual guarantees and shopping for the highest rates. I certainly would love to have you as a client; go to The Annuity Man, schedule a call with us, look at our videos and rates, and get my books.

Tell the Truth

‌But as my grandfather told me a long time ago, you've heard me say this; if you haven't, this is what he said to me. He said, "Stan, if you tel the truth, you don't have to remember anything." And if you want to know the secret to The Annuity Man's success, the reason we're the top annuity sales organization on the planet is that's our mantra. We're going to tell you the truth because we don't have to remember anything, and it works, even if it means we don't get the sale.

‌I get calls all the time, which led to this blog, which is where I get most of my good ideas for videos, from you. When I talk to you or my team talks to you, they say, "Well, he said this, or she said this," and I'm like, "Well, that's interesting. That makes sense. That's probably on many people's minds, so let's cover it."

‌You Control the Asset

‌When you're looking to protect the principal, never lose a penny, never pay any fees, no management fees, got you fees, IRA fees, annual fees, fee, fee, fee, fee, fee, fee, fee. When you want principal protection and have the potential to take interest out if you need it, or just let it grow and compound, whatever, it comes down to the duration you want to lock that money up for. When I say lock that money up, that's temporary. So, if you buy a one-year CD, you're in that CD for one year. If you purchase a five-year MYGA, you're in that MYGA for five years, and there are surrender charges if you pivot out before those five years. If you hold it to term, we can send all the money to you or back to the IRA at Fidelity, Vanguard, or wherever. In other words, you control the asset. It's the same thing if you bought a two-year Treasury.

‌But you need to ask yourself, how long do you want to lock the money in? If it's less than three years, then Multi-Year Guarantee Annuities historically will not provide the highest contractual guarantee. If it's three years in out, Multi-Year Guarantee Annuities, the annuity industry version of a CD, historically will provide the highest contractual guarantee available when compared to CDs and Treasuries. That doesn't make it better than CDs and Treasuries, and CDs and Treasuries aren't better than Multi-Year Guarantee Annuities. To me, they're one and the same from the standpoint of strategy.

‌Rankings

‌"Stan, rank them. I need you to rank the three, top to bottom, with the top one being the safest money down to the lowest. Which would you do? How would you rank them?" Here's the ranking. Rank number one, for total safety, Treasuries. Why? F stands for federal, and F stands for they can confiscate our money and get our money and taxes for the money. F stands for federal. Number two is CDs. FDIC insured, F stands for federal, F stands they can take our money, confiscate our money, taxes for the money. And then number three, from a safety standpoint, are Multi-Year Guarantee Annuities because the focus of that decision on which carrier to go with, annuity company, annuity carrier to go with, is the Claims-Paying Ability of that annuity company.

‌Now, yes, there are state guaranty funds that back up annuities to a certain limit. Each state is different. You can go and look at your state of residence at nolhga.com and then pull up your state. There are three boxes to the right. You can click your state and then hit frequently asked questions and FAQs on your state. And typically, six, seven, and eight, those questions there will tell you what that limitation is. It could be per company, per carrier, or per owner. It could be a lot of things. But the bottom line is don't go down the rabbit hole of state guaranty funds.

‌Claims Paying Ability

‌The bottom line with Multi-Year Guarantee Annuities is that we're looking at the carrier's Claims Paying Ability. And when I look at the Claims Paying Ability of the carrier with MYGA's, we're dating them, not marrying them. With lifetime income, we're marrying them, M-A-R-R-Y-I-N-G. It is hard for Southerners to say, for some reason, there is something to that. I've been married 35 years, so I've bucked that trend, as they said.

But you need to look at Claims Paying Ability. We're only going to be there and say, "We buy a four-year MYGA; we're going to be there for four years." After that, you can move the money back to where it came from. We can roll it to another MYGA. We will mostly roll it to another, MYGA, with a higher contractual guarantee. Because what do I always say? And this applies to CDs and treasuries as well. You own it for what it will do, not what it might do. Stop buying things on hypotheticals, theoreticals, projections, hopeful, historical, owned it 10 years ago, unicorn chasing the butterfly, never catches it. Don't buy that. Buy contractual guarantees, period.

‌The Future

‌On a side note, The Annuity Man is growing by leaps and bounds. I really believe that in the future, I don't know if I'm going to live to see it, but hopefully, in the near future, you're going to be able to buy annuities directly without interaction with an agent. Now, you have to interact with an agent. If you're going to do that, why wouldn't you choose me? Wouldn't that just be fun? And you're with the top organization anyway, but we're preparing our site and will have a brand new way for people to purchase annuities. We're going in that direction and dragging the industry across the finish line to make it pro-consumer.

‌I've already trademarked the saying that The Annuity Man is where annuities are bought, not sold. Because no one wakes up and buys an annuity, they're all just sold incorrectly. People come to The Annuity Man and shop for the best-fixed rates, run their own quotes, 24/7/365 on our proprietary calculators. But let's return to the topic you're looking for to lock in guarantees. You're looking to protect the principal. You're looking for a guaranteed interest rate. You don't want to pay any fees. You want it to be regardless of what account type, IRA, non-IRA, Roth IRA, etc. You're looking for that.

‌Duration

‌So, how do you choose from a duration standpoint? Very simple. Three years in, CDs and Treasuries, three years in out, Multi-Year Guarantee Annuities. Now, caveat side note, there will be agents that say, well, I totally agree with Stan. Of course, he's a really good friend of mine; I never met him, "But I think the three years now could also be an Index Annuity, sir. The historical returns a market upside with no downside. There's principal protection and market participation. Why wouldn't you want to do that?" My comment on that is there's nothing wrong with Index Annuities, and we sell more than anyone as a delivery system, a very efficient and cost-effective delivery system for Income Riders. For future income needs. If you want a lifetime income pension, say starting in five, seven, or nine years from now, listen to me closely. When buying and locking in principal protection with interest, you do not compare Multi-Year Guarantee Annuities and Index Annuities when buying and locking in principal protection. With Index Annuities, there's nothing wrong with them, but there's no guarantee of any return. Listen to me. It's a minimal thing that doesn't matter, and it's so low it's ridiculous. But I'm talking about real guaranteed interest rates. The only guarantee of an Indexed Annuity is that you won't lose your money. That's fine. That's great. Zero is your hero, as they say at the bad chicken dinner seminar. No, you're the zero player that's saying that.

‌The trifecta does not include Index Annuities. It's MYGA's. Why? Because Multi-Year Guarantee Annuities, Fixed Rate Annuities, the annuity industry version of a CD, guarantees an annual interest rate contractually. That's what you want. There's no zero is your hero. If you're going to do that, bury it in the backyard. That's a zero is your hero as well. But if you want guaranteed interest rates, there are three choices to protect the principal. And all you bond freaks out there, calm down please, because you know what I'm talking about. Bond valuations can fluctuate up and down. Nod your head truthfully. The three things that you need to look at to protect the principal and get a guaranteed contractual interest rate are CDs, Treasuries, and Multi-Year Guarantee Annuities, AKA Fixed Rate Annuities, AKA annuity industry version of a CD. So, what's the rule? Repeat it back to me. Three years in, CDs and Treasuries. Three years in out, Multi-Year Guarantee Annuities. It's really that simple.

‌And my gift, I have a lot of gifts. Plays the guitar, shoots free throws, shoots three-pointers, the whole thing. The problem with shooting three-pointers, even though I have the school record where I want it to and is never to be broken; it doesn't really shore up a resume. As my coach said, "That and a dollar gets you a cup of coffee." Well, not anymore. Maybe that and $2 will get you a cup of coffee. But it's really that simple.

I'm Stan, The Annuity Man, keyword The Annuity Man. We only sell annuities. Fixed Annuities. So, CDs and Treasuries, you're on your own. I would go to bankrate.com to check for CDs on a national basis and treasurydirect.gov for the Treasuries. And The Annuity Man for the best MYGA rates on the planet. That is Shootin' It Straight With Stan, three years in, Treasuries and CDs, three years in out MYGA's. See you next time.

Never forget to live in reality, not the dream, with annuities and contractual guarantees! You can use our calculators, get all six of my books for free, and most importantly book a call with me so we can discuss what works best for your specific situation.