Retirement Lifestyle: Never Lose Money With These Tips

Hi, I'm Stan The Annuity Man, America's annuity agent, licensed in all 50 states, including yours. I'm doing these retirement lifestyle blogs because people are always asking me, "Stan, do you have anything I'd never lose money in?" Everyone says they have it. Annuities are contracts, so we will go over the ones that you can never lose money on, which is a good thing in our volatile world. The stock market's great if you can handle that risk. And for people that are young, they need to be there. However, for people who are reaching retirement age or seeing the finish line for retirement, in fact, 10,000 Baby Boomers reach retirement age every single day. Many of them are looking for contractual guarantees, and many are looking for products that they cannot lose a penny with, regardless of what happens in the world and the markets, etc., because they've worked hard for their money. They really have laid it on the line over all these decades, and now they're at the finish line and want to hit bunt singles. They want to do the pragmatic thing and never lose a penny. I'm going to show you how to do that after this blog.

Before we start, I encourage you to go to The Annuity Man. You can schedule a time to talk with us. If you're considering an annuity, you need to speak with us. I'm the top agent in the country, licensed in all 50 states, representing pretty much every carrier out there. I've written six books, and I'd love for you to download them for free and under no obligation. They're owner's manuals. They're easy, easy reads. In fact, they're very thin because I got to the point. There was no fluff, kind of like these blogs. But I encourage you to go to The Annuity Man. I put out a podcast called Fun With Annuities twice a month in addition to these blogs every Monday through Friday.

Annuity Types

Let's go over some annuity types that you can never lose a penny, which sounds good. Now, anytime there's principal protection on a product that will limit the upside, so if you want market growth, go buy market stuff, stocks, ETFs, mutual funds, etc., and there's nothing wrong with that. However, annuities are an excellent place for people who want to protect the principal fully.

Multi-Year Guarantee Annuities

Let's talk about the first one, which is called a Multi-Year Guarantee Annuity. It's a CD-type annuity. It's basic, it's a fixed rate. It just works like a CD. You give the money to an annuity company; they pay you a specific interest rate for a specific period of time that you choose. Sound familiar? Yeah, it's a CD. The difference is with a Multi-Year Guarantee Annuity in a non-IRA account; the money grows tax deferred. Yes, you have to pay taxes when you pull it out, but if you want to just hit these bunt singles and get this, baseball announcer, bunt singles, very simple, very easy to understand fixed rate for that specific period of time. But you want to use non-IRA money. It works. You can also put Multi-Year Guarantee Annuities inside of an IRA, but you're just going to be getting that contractual guarantee. There's no double tax deferral because an IRA is already tax-deferred, so a lot of people say, well, I'd never put an annuity inside of an IRA. I disagree with that. When it comes to annuities, you're buying the contractual guarantee, which works in a non-IRA, a Roth IRA, or a traditional IRA. The difference is if you pull money out, you're going to be taxed differently based on the account you're in, but you're buying annuities for the contractual guarantee, so Multi-Year Guarantee Annuities, Fixed-Rate Annuities. We have a live feed at The Annuity Man. I encourage you to go there. You'll have to punch in your state of residence and the duration that you're looking at, and boom, you'll see all carriers listed with the highest interest rate for that specific period of time that you choose, so that's an excellent way to go.

Fixed Index Annuities

Another product you can never lose money or a penny, regardless of what happens in the market, is the ever-popular, over-hyped, over-sold, over-promised, over-pitched Fixed Index Annuity. I know you're like Stan, I thought you hated Fixed Index Annuities. No, of course I don't. They're a pretty good product when you fully understand what they are designed to do. And they were created in 1995 to compete with CD returns, not market returns. I know that's not the pitch you heard. You hear market upside with no downside of market participation, principal protection, and all this great stuff. And if all that was true, the FED would just buy Index Annuities. They're CD products. They're an excellent, efficient delivery system for what's called an Income Rider benefit as well. But suppose you just bought a Fixed Index Annuity, a life insurance product issued by a life insurance company and regulated and approved at the state level. In that case, you're never going to lose a penny.

The good news is that the CD-type returns lock in, so if you have an Index Annuity with a one-year contract anniversary date on the call option, you're just going to lock in those gains. Again, you're not going to get those stock market type returns, but you're going to get CD returns, which is a good thing. And if the market goes south, you're not going to lose a penny. And let's look at that same example where you have it rationing locking in. The market goes south, and you've locked it in. You're locking in every contract anniversary, or most Index Annuities that we look at have this one-year point-to-point type look.

However, Index Annuities are a principal protection product, so when people say market upside with no downside, half of that's true. It's the no downside part. If they say market participation with principal protection, half of that's true. The principal protection part is correct, so they fit your specific situation. You might combine them with Multi-Year Guarantee Annuities, but the bottom line is they protect the principal. You never want to lose money. I get that.

Income Annuities

Now, let's talk about income annuities. Single Premium, Immediate Annuities, Deferred Income Annuities, and Qualified Longevity Annuity Contracts are annuitized products. Now, when you get income from an annuity, it's primarily based on your life expectancy at the time you take the payments, interest rates play a secondary role. That includes Income Riders, which we discussed with the Indexed Annuities. Once you turn on that income stream, you're getting your money back with interest, so it's deducted from the principal. When you say principal protection, this is a little bit of an asterisk.

What I can tell you is that we can structure the policy with these lifetime income products so that 100% of the money is either going to go to you or it's going to go to your list of beneficiaries. And the evil annuity company will not keep a penny under any circumstance. A lot of people call me up and say, "I'd never bought an annuity because when I die, the money goes poof." Well, that's one out of 35 ways to structure it, but we typically don't do that unless you tell us to. That's why you have to contact us or go to The Annuity Man and set a time to speak to us one-on-one so we can get your specific goals in mind and then shop for the best carriers for the best contractual guarantee for your situation.

The bottom line is with these lifetime income products like Single Premium Immediate Annuities, Deferred Income Annuities, Qualified Longevity Annuity Contracts, and Income Riders, the annuity company is on the hook to pay regardless of how long you live. You have transferred that risk to the annuity company and they're on the hook to pay, so if you lived to 150 or 170, 180 or whatever, they're on the hook to pay. I always tell people there's no return on investment or ROI until you die. I don't know what that ROI is until you die. Up until then, that's a transfer risk.

What we can say about principal protection on these products is that 100% of the money you initially put in will go to someone in your family. We will structure it that way even though the annuity company's on the hook, so that's a little bit of an asterisk because most people, when they say, I never want to lose a penny, then they're talking about the multi-year guarantee annuities or the index annuities where the principal's protected.

You're never going to lose a penny. You still control that asset. But I also think that principal protection can be, when fully explained, applied to these lifetime income products because most people think that the money goes poof when you die. It doesn't have to be like that. We can structure it so that 100% of the money goes to you or your family, regardless of what happens or the circumstances. And if you live forever, the annuity company's on the hook to pay.

I encourage you to go to The Annuity Man and schedule a one-on-one call with us, and we can talk about annuities and strategies to see if something fits. We'll even tell you if it doesn't. Thank you for joining me today, I'll see you on the following Stan The Annuity Man blog.

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.