Retirement Portfolio: Your Secret Weapon is Annuities

Today's topic is your retirement portfolio. The secret weapon is annuities. That doesn't mean everybody needs one, but I will explain how annuities can give you peace of mind, that turnkey approach, that lifestyle you're looking for.

Think again when you hear people say, "Don't buy an annuity." You already own one. It's called Social Security. You liked that one because that's the peace of mind of that money coming in every month. Still, I’m going to cover some other things that, when you look at your retirement portfolio. You’ll get everything in there, and, yes, you have to have it be diversified; you can't be all in with annuities, hello, but annuities can give you that peace of mind, and it's that secret ingredient that might be missing.

Social Security

Let's talk about Social Security. You’ve got your stocks, bonds, ETFs, and crypto, right? You've got all that stuff. You need to look at Social Security as part of the income floor. What is the income floor? That money hits your bank account every month that you don't have to worry about. Now, with over 10,000 people hitting the age of 65 every day, annuities can provide that peace of mind for the income floor. You have Social Security. That's an annuity. Hello?

You own a one-lifetime income payment annuity, and you might have a pension. Lifetime income annuities can help solve that income floor, and that's part of your retirement portfolio. Now, in the perfect world that I live in, Stan The Annuity Man®, where the unicorns chase the butterflies, with your retirement portfolio, if you want it to be wonderful, you're going to solve that income floor.

Is the Least Amount Best?

First, you're going to use as little money as humanly possible using a lifetime income annuity setup, either life only or joint life only. That's what you need to talk about. That’s what you're looking for. You're looking for that income floor that will hit every month. Why is that important? With a retirement portfolio, you're not going to be all in on annuities because you can't be. It's not legal. You shouldn't be, anyway. I'm not going to allow you to do that

You need growth, but I'm going to tell you this right now, and I need you to lean in because this is true. You will be a better investor when you know that the income floor is in place. I know it drives you crazy, you stock pickers out there, and you are raging bull marketers that don't want to tie my money up in annuity because I could make a thousand percent on crypto. I hear you. I hear you loud and clear, but I want you to listen to me.

Envision the day you have the income floor coming in every month. You don't have to worry about it. Your bills are paid. You've got enough money. You've built-in in the income floor some lifestyle money so that you're living life, and then the rest of your money, you're investing it. You're taking a little more risk and being a better investor because you have that income floor. That's the way I want you to look at your retirement portfolio, and that's how annuities can be that sacred ingredient you're looking for. I talk about the income floor all the time.

Client Example

I had a call the other day, and the guy says, "I'm missing a plank in my income floor," and I'm, like, I'm taking that one from you. So what are the planks on the income floor? The planks are, say, home payment, car payment, insurance bills, medical expenses, travel type expenses, living expenses, eating out budget, etc. That's your income floor. When you're putting all that together, you might not need an annuity; you might say, "You know what, we’re covered from the pension, Social Security, dividend income, rental income, and all this stuff." But most people have that gap. They need an extra plank.

The way to fill that gap is with the lifetime income annuity. Now, understand that you can structure a lifetime income annuity so that when your Learjet hits the mountain, 100 percent of any unused money goes to your list of beneficiaries. The evil annuity company doesn't keep a penny even though they're on the hook to pay. I get calls like this every single day. "I never buy an annuity because, when I die, the money goes poof." That's one of 40 different ways to structure it. When you schedule calls with me, and you got me on the phone for 30 minutes, I will ask you, “do you want the money just to go poof and get the highest payment, or do you want your family to get any unused money?” Most people want the family to get the unused money because they don't want the annuity company to keep it. You've worked hard for it.

Now, that's where income flooring comes into play. Especially coming forward with medical expenses and things like that, you're always planning extra income flooring. The other thing you really can't plan for is inflation. You say, "Wait a minute, inflation is going to happen. Stan The Annuity Man, you're telling me we can't solve it?" Not contractually. You can put a cost of living adjustment that will increase your income stream, and then you're saying, wait a minute, that sounds good.

First of all, never buy an annuity for a bonus. Bonuses are candy for the stupid, and you're not that person. It's just part of the overall contractual guarantee. Currently, at the time of this taping, there are these 25 percent or 30 percent bonus products, and be, like, should I buy for the bonus? No, buy a car for the stereo. It makes as much sense as that. Inflation, as part of this income floor, we have to reverse engineer that quote to solve for that specific dollar amount that is missing in your income floor. That's the plank. You need an extra $250 a month in that income floor plank to fill in your income floor.

When looking at your retirement portfolio, annuities can be that secret weapon you weren't thinking about. It comes down to taking care of your family. Forget it. Cruise control, contractual guarantees, transfer risk, making sure there's a legacy part for your family. That's what annuities can provide contractually.

Do You Need an Annuity?

I always tell people you buy an annuity for four reasons, and I've come up with an acronym called PILL. P stands for principal protection. I stands for income for life, L stands for legacy, and the other stands for long-term care. You can use that part of your portfolio that non-annuity part is the growth part. The annuity part is the contractual guarantee part. If you have a spouse, you can set it up for legacy. You can set it up for long-term care. You can set it up for a spouse to get a lifetime income stream when you die from a legacy standpoint. There are all kinds of things that you could do contractually and transfer that risk to solve for that specific goal.

We all have families. We all want to take care of our families. We're all thinking about what happened, and I'm thinking like this because I'm getting older. I know you're saying, "No, Stan, you're young. You're unbelievable." No, I'm not. I'm thinking about my family. How will I take care of my two daughters at this taping, 22 and 24? I love them to death and will do anything for them. I want them to be taken care of. I want my wife of 33 years to be taken care of when I pass away. It could be tomorrow. It could be any day, but I want to know that that is in place; the legacy is in place. The lifetime income is in place that I don't have to worry about it, and they don't have to worry about it either.

I think that's the biggest thing. You’re probably saying, "Man, I can manage more money, Stan, if you’re watching this. I'm the master of the universe. I can do that. I don't need annuities." Take a step back. I agree with you. Listen, I was with Morgan Stanley, UBS, etc.; I know my way around markets; I know my way around money. But it's bigger than that. As we get older, you know that we need to start thinking less about ourselves. I know that's tough. Didn't I tell you that it's tough for me, less about ourselves and more about our family.

That's what I'm thinking about. How do I take care of them if something happens to me? When you look at your retirement portfolio, that secret part that can provide is peace of mind. Your family members will benefit from the transfer of risk because you've put that in place.

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.