Casting Your Vote With Annuity Strategies in Mind

Hi there. Stan The Annuity Man, America's annuity agent, licensed in every single state, all 50 of them, and proud of it. Currently, our main office is located in Las Vegas, Nevada. And you say, "Wait a minute, Stan. Isn't Las Vegas about risk?" The Annuity Man is all about non-risk because we only sell contractual guarantees. And the answer is yes, I'm a contrarian, but I love Vegas. I've been married for 36 years. I don't drink and don't gamble, but the food's pretty darn good.

Everybody wants to be here when you go to Vegas, so it's a good vibe. If you stay at a hotel, everyone seems happy, even though they're probably blowing their mortgage payment, but that's a whole other side note, right?

Election season's here. What I'm going to tell you to do is vote with annuity strategies in mind. Regardless of what party wins, it doesn't matter. I'm not political at all. I've never given a dollar to either party or parties, Independent, whatever, Green, whatever. I'm never going to because I don't want them to bug me more than they already do, but I vote with annuity strategies in mind. You're like, "Wait a minute. Stan, shouldn't I be voting with the economy and foreign policy and taxes and all that stuff?" Yes, absolutely. Yes, you should. Military, all that stuff. Yes, obviously, but for the 13,000 of you baby boomers in that demographic tidal wave that I always talk about, turning age 65 every single day, most of you in that category, or if you're looking at that category or past that category, you're looking for guarantees with a portion of your portfolio.

Income Floor

Now, if you haven't already done this, I suggest you focus on what I call the income floor. What is the income floor, Stan? It's the annuity you already own. Yes, you already own one, Social Security. It's the best inflation annuity on the planet. If you have a pension, dividend stocks, rental properties, the money that hits your bank account every month, regardless of Republican, Democrat, or Independent in office.

Now, I want you to do that because none of us know if the bull market will continue or if the bear market is on the way. We don't know. We don't know if artificial intelligence is going to drive things, we don't know. None of us know. And the people that do know, you're never going to talk to because they know. So, what I want you to do is hedge your bet. Vegas coming out of me just like the sweat. It's a Vegas saying. Hedge your bet. Hedging your bet and voting annuity strategies during elections generally puts that income floor in place.

The 4% Rule

You're going to say, "Wait a minute, Stan The Annuity Man." That's how they talk in rural North Carolina where I'm from. "Let me tell you, Stan The Annuity Man." They talk in the back of their throat. "What about this 4% rule my advisor and I've been reading about and all this stuff?" The 4% rule for those of you that don't know, is never, ever, ever buy an annuity ever, and just take your stock, bond, mutual fund, crypto, whatever in your portfolio and just take out 4% per year as the income so you never have to lock in money with annuities, et cetera. That is perfect. If the planets aligned themselves and all of us had six-pack abdomen muscles, which we don't, including me, that would be a great world that we live in. But the 4% rule has been shot down by some pretty good experts out there, like Wade Pfau, P-F-A-U; he's been on my Fun With Annuities Podcast.

He has shot that down in what I called factual fashion, to where the argument for that 4% rule is a very thin one, and it's been around for decades and decades. It's like me coming to you and saying, "You know what? You can still wear that leisure suit. You still look good with the butterfly collar and the whole thing and the chain and all that stuff." No, the 4% rule is like a leisure suit. Its time has come. At one point in time it worked, but in the global markets that were in 24/7/365, my opinion, having done this for a while, and remember, Stan The Annuity Man before the baseball cap and the logo-ed gear, I worked for Dean Witter and then I worked for Paine Webber, I worked for Morgan Stanley, I worked for UBS, which is Union Bank of Switzerland, so I've been on that side of the table on the growth side.

That 4% rule was taught to me at Dean Witter and Paine Webber, and I was a young skull full of mush, and I was like, "Uh, that sounds good," but it's not. You want to use annuities for income flooring because they are guaranteed, and you can do a lifetime income stream.

Annuity Types

There are four different types of annuities. Single Premium Immediate Annuities, Deferred Income Annuities, Qualified Longevity Annuity Contracts, and Income Riders. All of those are lifetime income products, so it's going to pay as long as you're breathing. Even if you're on a ventilator, it's going to pay. If you put that in place with your Social Security, then the growth investments that you'd have, the non-annuity investments you don't have to disrupt. You don't have to take the 4% out.

The reason that's important is if you're going solely by the 4% rule and we have a down year this year, a little bit of an up year next year, and a very down year the following, you still have to take the 4% out, and you are disrupting those investments. It might not be the right time.

What I'm saying is, why wouldn't you put the income floor in place and then have the growth assets? Which leads me to another point. You should never have more than 50% of your investable assets in annuities of any type. If you need to put more in, you're going to have to talk to us and convince us because the annuity industry, the National Association of Insurance Commissioners, suggests, underline, bold, that you should not overfund annuities. And I always tell people to use as little money as possible to solve the contractual goal you need.

P.I.L.L

Annuities solve for four things and the acronym's PILL. P stands for principal protection. I stands for income for life. L stands for legacy, and the other L stands for long-term care. Principal protection, income for life, legacy, and long-term care. If you don't need to contractually solve for one or more of those things in the PILL, then you do not need an annuity. Never buy an annuity for market growth. Now, the agents and advisors reading this, "Hi, thank you for reading." They're yelling at the screen because "I got an annuity for market growth." Well, if it's an Indexed Annuity, no, you don't because it's a CD product developed in 1995 to compete with CD returns. If it's a Variable Annuity, you have a little bit better argument. We don't sell Variable Annuities, but you have a little bit better argument because there are mutual funds inside. in my opinion, the fees on those products are pretty prohibitive. And if you find a no-load Variable Annuity, there's a handful of them out there; the choices aren't that good.

IRA Accounts

So, when casting your vote with annuity strategies in mind, think of this. If you think there will be high taxes from the candidate you don't want to win, and they come in and raise your taxes, you can use annuities for lifetime income. That income is tax preferential. You can use an IRA, Roth IRA, or non-IRA. But let's talk about non-IRA accounts. The income coming from those are those four types of annuities for lifetime income. Immediate Annuities, Deferred Income Annuities, QLACs, and Income Riders. That's a combination of return of principal plus interest. You're not going to be taxed on the principal, just the interest. There's just a portion of that lifetime income that's going to be taxed until the account gets to zero.

At that point in time, the annuity company keeps paying, but then you pay taxes on the full amount, even though the account's at zero. That's the way to combat it if you think taxes could go up and be confiscatory and evil. If your money's in an IRA, it's going to be taxed just like everything else in your IRA. If it's in a Roth IRA, it's non-taxable at this point in time unless the politicians change their minds, and I hope they do not. But I'm not sure if I trust them for that because at one point in time, Social Security was tax-free.

Multi-Year Guaranteed Annuity

The other strategy, if you think that taxes are going to go up, is you could buy a Multi-Year Guaranteed Annuity, which is the annuity industry version of a CD, and just let that interest grow and defer and compound during that administration's time as you wait for tax rates to be a little bit more preferable to your situation.

So, go into that voting booth, vote your conscience, and do the best you can. Know that the dumbest person on the planet's vote nullifies yours, but don't let that get you down. Have some annuity strategies in mind regardless of who wins. And remember, politics, no politics, Red, Blue, Independent, you need an income floor. In my opinion, you need to establish a contractual income floor, which should be your focus.

My name is Stan The Annuity Man. I am America's annuity agent, well-dressed with the Carolina blue baseball cap on, all these chains, and all this midlife crisis stuff, but I'm feeling pretty good. I'm getting ready to be a grandfather for those who care, which is pretty cool. And that's going to happen, and I think I'm going to be a really good grandfather.

The kid's going to call me Tex. Don't ask why. I'm not from Texas. I've never been on a horse, but I just think I could pull that off. Soon, I'll have a cowboy hat on, and it'll have the logo on it, but it'll be great. I'm Stan The Annuity Man. 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.