Retirement Tips: Annuities Are About More Than Covering Expenses

Hi there, Stan The Annuity Man, America's annuity agent. Licensed in all 50 states, including the beautiful one you're sitting in. I appreciate you tuning in. Today, we will talk about annuities and why they're just not for covering expenses. I know there are these boring products, and I promote them as boring products because they are boring products. I mean, they're contracts. It is what it is; you can't polish them up. Annuity is the curse word in the financial services industry for some reason. "I hate annuities. I hate all annuities." That's crazy because you can't hate your Social Security. After all, that's an annuity. You can't hate your pension because that's an annuity. You can't hate your CD because that's an annuity type. Multi-Year Guarantee Annuities are just like a CD. There's a lot of misinformation, but I want to cover the fact that annuities are more than just contractual guarantees. And I'm not saying from a sales pitch standpoint that it is just too good to be true, pie in the sky, unicorns chasing the butterflies. What I'm going to talk about today is how annuities can help the psyche a little bit. And no, I'm not a psychologist, but my wife is a clinical psychologist, which explains why we've been married for three decades. She always assesses me, says it'll be okay, and makes me walk through things and do exercises. I digress.

‌Peace of Mind

‌Okay, so when I say the three phrases, peace of mind or no worries, or simplistic, you probably don't think about annuities. But for many people, that's what annuities bring to the table. Because most people out there need more income, and there are 10,000 baby boomers who hit the retirement age every single day. The primary thing they're thinking about to themselves is, man, I've worked hard, I'm tired. I want to do chapter two of my life. I'm tired of volatility. I'm tired of all the stuff in the world. I'm tired of politics. I just want to spend time with my family and focus on my hobbies, kids, and grandkids. I need guarantees.

‌Now, that's not a veiled sales pitch for annuities, but what are annuities? They're contractual guarantees. I always ask people two questions when they're considering annuities. What do you want the money to contractually do? And when do you want those contractual guarantees to start? Just speaking for my wife, my wife is all about, she wants a lifetime income. When I'm gone, when I'm done, she wants a lifetime income stream to see the kids and the grandkids. I mean, that's it. That's not sexist because there are a lot of females out there that have the males that don't care at all about the markets, and they're running the money, same thing. It's about lifestyle. Annuities are really about your lifestyle. If you don't need money, then you might say, you know what? I don't need the money for income, but I don't want to lose another penny. Well, there are a couple of annuity types that you cannot lose a penny regardless of what happens in the marketplace.

‌Annuity Types

‌Multi-Year Guarantee Annuities and Fixed Index Annuities are CD products. I know the Index Annuity side; people are promoting that as something that it isn't, but it's a CD product. You can protect your principle. Many people say I don't care what happens in the markets anymore because I want to protect the principal. Well, that's a lifestyle play. That's not worrying about what's on CNBC, Fox Business, The Market Moves, the Gordon Geckos, The Next Stock, or The Volatility. Many people have realized that, I think, over 85% of all trades in the stock market are non-human, algorithmic, black box, and high velocity. It's in that area where it's just computers fighting against themselves. I always tell people I love stocks. The stock market's great. I did that for a long, long time with some of the major firms out there before I became The Annuity Man.

‌Surfing Beside a Cruise Ship

‌But investing in the markets today is like surfing beside a cruise ship. You're going to catch waves some of the time, but you're going to get sucked under the boat eventually. It is what it is. When I was a young newbie in the securities industry and selling stocks a long time ago, and I don't do that anymore. I'm just Stan The Annuity Man and sell Fixed Annuities. The market movements we see today, in a day, are what happened over a year. And we would think that was really volatile because that 500-point swing occurred over the year. Well heck, it happens in the morning now. And I think many people are saying, wait a minute, I'm done with that. Now, that's a hard transition for many people to make because it's all about growth, finding opportunities, finding the next company, finding the next big thing, and finding the next good idea. But at the end of the day, you're not a hedge fund. At the end of the day, you're not a venture capitalist. At the end of the day, you're not an angel investor. At the end of the day, you're not a trader. At the end of the day, you're a person who has a life that you've worked hard for. You've got a family. You've got hopes and dreams. You had hopes and dreams, and you're now doing chapter two. So, how do annuities fit?

‌Leaving a Legacy

‌Annuities fit from the standpoint of peace of mind. Of not worrying about things. It's also emotional for me, and I'm not an emotional guy, but for annuities, it's an emotional play for me. What do you mean by that? Well, I've got two daughters; I love them to death. They're in their twenties right now. I want to make sure they're taken care of. That's emotional for me. I want to ensure that they have an income stream. I want to make sure that there will be money for them. My wife for 30 years that's an emotional thing. I have ensured that they will all be taken care of. That's not a sales pitch. That's not me looking for an opportunity. That's not me looking for the next best thing. That's not me looking at PE ratios. That's me putting contractual guarantees in place for my family, for a legacy, so I don't have to worry about them. It's not controlling it from the grave. It's the emotion of loving them enough to do that. And I'll probably get choked up here because to me, one of the great things that we do, that I do as an advisor, is I help people take care of their loved ones contractually.

‌Client Example

‌And I got an email the other day, and it was from a really sweet man, and his wife and his wife had just passed away. And I get these calls now; I've got thousands of clients in all 50 states. And I hate it when it happens. They came in and said, "Stan, I just want to let you know that Dee passed away." And that's her name, and I'm going to choke up. But he pretty much said "The lifetime income stream that you put in place for us, it changed us." Man, that's all I got to say. Stop crying. Stop crying. Puppies, puppies, think of something. Happy thoughts. I apologize for that. I mean, that's typically not me, but when I decided to do this topic, I knew there was a possibility of it going to that. Listen, I'm not perfect. I always tell people; I'm not going to be your friend. I'm not going to be your friend because you don't need a friend as an advisor. You need an advisor that's going to shoot it straight. That's going to tell you the truth. That's going to tell you if you're putting too much money into an annuity, and that's going to tell you if you're not setting it up right. That's going to ask the hard questions to make sure that there's a legacy in there. That will make you do things you might not want to do contractually, but I'm thinking down the road for your family. That's the good thing about what I do. And when you can provide these contractual guarantees for people, I mean, it's rewarding. I'll tell you right now: I sold stocks, and I made people a lot of money in stocks and mutual funds a long time ago. It doesn't compare to what I do today. That's why I love what I do. I don't need to do it. If I don't sell another annuity in my life, life's good.

‌But when I can get those emails and calls from people that what we did contractually changes their life, what I'm trying to tell you is what you are deciding on right now, discussing this with us, hopefully one-on-one, when you go to The Annuity Man and schedule a time, we're going to have the hard conversation. We're going to talk about the fragility of life. And I think the whole COVID situation has made us all realize, hey man, this thing might end, and if it's going to end, we have to have a plan, and that plan's got to involve some hard decision. That plan's got to involve taking care of business, taking care of my family, and making the hard decision that maybe we're not in the stock market as much as we used to be. Perhaps we may be going to lock things up for lifestyle and legacy.

Maybe that's where you're at. But you've got to understand this. We might have that conversation, and I might say to you, you know what? I don't think it's time yet to lock in those guarantees. I will tell you that.

‌I got a call the other day. The guy was in his early forties, extremely successful, and he was thinking like this, and I said, "You know what? You've got 40-plus years of life expectancy. Let's revisit this next year. If you're feeling the same way next year that you're feeling now, because many people are going through some tough times, not just financially, but emotionally with what's happening in the country, let's discuss it then." We will tell you no if we think you're making the wrong decision, but we will structure something customizable for your specific situation. We will work with your team, whether it be lawyers or tax advisors, to make sure that everything's working in conjunction if you have a trust, whatever.

‌Yes, I got emotional about this, but annuities can be emotional. Contractual guarantees can be emotional. If they're placed right, and if your heart's in the right place. When it comes to annuities, I always tell people there are no good answers, just bad sales pitches. I totally agree with that. But what I will tell you is that there's a little bit more to it than just the contractual guarantees. There's a little bit more to it than just, what's my life expectancy? There's a little bit more to it than, what are current interest rates. There's a little bit more to it than quoting all carriers. There's a little bit more to it than where does it fit? It's like everything in life; there are no perfect answers. But I think we need to stop procrastinating as a society and start looking at structuring things and taking care of things contractually that actually you're able to do, and annuities can provide that.

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.