Three Ways to Add Another Social Security Payment

Hi, my name is Stan, the Annuity Man. I'm America's annuity agent, licensed in all 50 states, including the beautiful one you're sitting in. Wouldn't it be nice if you could add another Social Security payment? Wouldn't that be great when that money's hitting every month? Can you do that? Indeed, you can. I will show you three ways to add another social security payment, part of that guaranteed income floor, that will always hit your bank account as long as you live.

I love it when people say, "I hate annuities," and the ads on TV that say, "I say I hate annuities," or when I get the call, "Stan, I'd never buy an annuity," or the one that I got recently. I was speaking in front of a large crowd, and a guy got up and posture, stuck his chest out, and said, "There's no way in heck I'd ever own an annuity, Stan The Annuity Man." I guess he's trying to one-up me, but boy, that didn't work out too well because I asked him, "Do you own Social Security?" He goes, "Yep." "Do you get payments every month?" "Yep." "Does it pay for your life?" "Yep." By then, the people are laughing and snickering because, hey, that's an annuity.

Annuities were put on the planet in Roman times to create a lifetime income stream or provide a lifetime income stream for the dutiful Roman soldiers and their families. For hundreds of years in this country, annuities have done that. In fact, annuities are the only products on the planet that provide a lifetime income stream, which means that you can never outlive the money, just like Social Security.

Single Premium Immediate Annuity

I tell people that say, "I hate annuities. I never buy an annuity." I hear pundits and people on TV say, "Never buy an annuity." I'm like, "They already own one. Social Security." By the way, it's the best inflation annuity on the planet. If you want to add another Social Security payment, which is probably what you want to do, the best one for starting income right now is a Single Premium Immediate Annuity. Now, that lifetime income stream will be based on your life expectancy at the time you take the payment. Sound familiar? Mm-hmm. Social Security.

What are the rules? Bottom line, the older you are, the higher the payment. Same thing with annuities for lifetime income. The older you are, the higher the payment. Why? Because it's life expectancy based. That's the primary pricing mechanism. Interest rates play a secondary role, so the older you are, the higher the payment, meaning that your life expectancy is less, meaning that the payments are fewer, meaning that the payments are higher. It's that simple. When people say, "I'm going to wait until 70 to turn on my Social Security." Makes sense. You're going to be older; it's going to be higher to get that income stream that's coming in.

Single Premium Immediate Annuities are a product that will be your next Social Security-type payment if you want income to start as soon as 30 days up to a year.

Deferred Income Annuities

In addition to Single Premium Immediate Annuities, I put them in the same category as Deferred Income Annuities. Why? Same structure. The difference is that Deferred Income Annuities have income starting as soon as 13 months. Remember, Immediate Annuities, 30 days to a year, Deferred Income Annuities, 13 months and out. Once again, it has the same structure: no moving parts, no annual fees, no market attachments, just a straight transfer of risk. The question is when do you want to turn on the income? With Immediate Annuities, it's 30 days to a year. Deferred Income Annuities, 13 months and out. Both are based on your life expectancy, or life expectancies if joint, at the time you take the payment.

Qualified Longevity Annuity Contract

The other way to add a Social Security type of payment that hits your bank account every single month is what's called a Qualified Longevity Annuity Contract, a QLAC. Now, that's a Deferred Income Annuity. Remember, an Immediate Annuity is a Deferred Income Annuity. Well, QLAC is a Deferred Income Annuity, but you can only use it in your traditional IRA, not a Roth, traditional IRA, or some employer-sponsored plans. That's where you can use it. There are limitations on how much premium you can put into a QLAC at the time of this blog, which is 2024; you can put in $200,000, the maximum, per IRA owner. You and your spouse could each put that amount in. But if you're reading this three years from now, it's probably higher. Hopefully, it is, and the government has increased that.

But QLACs allow you to defer the payment inside your IRA as far out as age 85. But it doesn't have to be that. Listen to me. I know you're thinking it does. It doesn't. It can be short; it can be anytime. It can be 70, 72, 75, or 77. But when you hit 85, you have to turn on the income stream.

QLACs are fantastic, and they work, once again, like a Social Security payment. They're going to hit your bank account every single month. They're going to pay you for the rest of your life regardless of how long you live. But you can set it up joint with a spouse even though it's your specific IRA. Also, the money used in a QLAC is not part of the Required Minimum Distribution calculations. So, there's potential for you to have some tax savings, as well.

We use QLACs for people who are looking to possibly address inflation in the future. Sometimes we do ladders. We do three policies at the same time, starting at different dates. You need to contact us at The Annuity Man and set up a time to talk so we can put together a specific plan for your situation using a QLAC and your IRA money.

Client Example

I got a call the other day, and the guy said, "I really don't like annuities, Stan. I'm a market guy. I know how to play the market. I've made a lot of money, but I think I will do a QLAC because my spouse doesn't care about the markets. They only want to have enough money to see their kids and grandkids. All they want is that money hitting the account like a Social Security payment."

I'm finding that many of those A-personality traders are buying QLACs and setting them up joint with their spouse so that a lifetime income stream continues for their spouse's life uninterrupted and unchanged. The amount is such that, with many of the IRAs out there, it doesn't really disrupt that investment strategy they're using for the other non-annuity money.

Income Riders

The final way to create a Social Security-type payment is with what's called an Income Rider. Now, I've written a book on Income Riders. I'd love for you to download it because it can be complicated, but I've put it into English, a very easy-to-understand language so that you can make a good decision. Income Riders, like all annuities, are commodity-type quotes. You need to quote all carriers for the highest contractual guarantee. But the bottom line with Income Riders is you can attach them to a policy at the time of application. Typically, that's either an Indexed Annuity or a Variable Annuity, but it's a separate calculation.

If you draw a line down a blank sheet of paper, accumulation value on the left, and income rider value on the right, you can only use that to calculate your lifetime income stream. That's okay. It's a contractual guarantee.

If you said, "Stan, I want income to start in seven years or 10 years," you can do single life or joint life; you can use it in any type of account. IRA, non-IRA, Roth, IRA. Guarantees are the same; just the taxation is different from the income coming out. I can tell you, to the penny, what that guaranteed income stream will be with an Income Rider.

The cool part about Income Riders is that it's an attached benefit. You don't have to use it. You can always say, "I don't want to do that anymore. Just send me the accumulation value once the surrender charge penalty is over." But an Income Rider allows you the flexibility of having that income guarantee, having that additional Social Security-type payment, which is a monthly income stream hitting your bank account every single month, just like Social Security. But you can control it, and it's a future income product.

Income Rider is a commodity product; you shop all carriers for the highest contractual guarantee, like all annuities. You can go to The Annuity Man and use our proprietary calculators, or I would encourage you to speak with us one-on-one because they can be a little bit complex. We can slice through all of that, tell you the true skinny on it, as they say in the South, the truth, the brutal facts, and we can find the one that fits your specific situation. We'll treat you like a pro. There's not going to be any sales pitches or high-pressure stuff. We will have a one-on-one conversation to see if an annuity fits, and if it does, we will quote all carriers and provide the best information possible. With that, 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.