“Fun With Annuities” The Annuity Man Podcast

In this episode, The Annuity Man discussed: 

Annuities that increase with inflation 

The role of interest rates in pricing 

For products that adjust for inflation

Reverse-engineering your income floor

Key Takeaways: 

Annuities don’t give things away for free. A product that magically increases with inflation doesn’t exist. 

Lifetime income is primarily priced based on your life expectancy at the time you take the payment. Interest rates play a minor role. 

For products that have a potential or contractual increase for inflati...

In this episode, The Annuity Man discussed: 

CDs and MYGAs

I-bond no-brainer

The safest product in principal protection 

How safe are MYGAs? 

Key Takeaways: 

Here’s how CDs (Certificate of Deposit) work: you give the bank money, they protect the principal, and you don’t have to pay any fees. You can take the interest if you want to at the end of the term and do what you want with your money. MYGAs are basically the annuity industry’s version of a CD. 

Treasury...

In this episode, The Annuity Man discussed: 

Products that adjust for inflation 

Thinking rationally about inflation 

Reverse-engineering annuity 

Key Takeaways: 

Many bad sales pitches out there mention a way to beat inflation using indexed products that adjust for inflation. What really happens is that the annuity company severely lowers the initial payment to make up for any potential increase. 

Think rationally about inflation. It’s customizable to everybody, meaning not everyone is affected the same way. Some are not even affected at all. 

Start with...

In this episode, The Annuity Man discussed: 

Threading the needle with volatility

Freedom from volatility

Annuities are the haystack 

Time to secure guarantees 

Key Takeaways: 

Threading the needle to get market returns makes you dependent upon so much unknown. You’re dependent on world markets, geopolitical events, and meltdowns that are impossible to predict. 

A lot of people can retire from their jobs and the market, and they should; those who can’t yet should make it a goal to do that and be free fr...

In this episode, The Annuity Man discussed: 

Annuities are contracts 

How Indexed Annuities Should Be Used 

Don’t buy an annuity for market returns 

Key Takeaways: 

To say that something is “guaranteed and backtested” means that there is nothing guaranteed at all. Annuities are contracts; buy them for what they will do and not what they might do. 

Indexed Annuities have the potential to go down in value, but they can be used as an efficient delivery system for guaranteed lifetime income through an income rider attachm...

In this episode, The Annuity Man discussed: 

The four lifetime income products

How annuities are priced 

The simplicity of SPIA 

Getting the highest guarantee 

Key Takeaways: 

There are four lifetime income products: Single Premium Immediate Annuities, Deferred Income Annuities, Qualified Longevity Annuity Contracts, and Income Riders that can be attached to Variable Annuities and Indexed Annuities. 

Annuities are priced primarily on your life expectancy at the time you start the payment. Interest rates play a secondary role. 

Deferred Income Annuities are, in essen...

In this episode, The Annuity Man discussed: 

Buying an annuity that you understand 

Annuities aren’t one-size-fits-all

How to know if you understand a product 

Key Takeaways: 

When buying an annuity, remember that if a product sounds too good to be true, it is every single time. Some annuities are more complex, and most agents cannot explain them well, let alone even comprehend them themselves.  

Currently, the annuity industry has an unbalanced way of compensation for different types of products. Agents get a higher commission for sell...

In this episode, The Annuity Man discussed: 

Why do agents tell stories? 

Protecting yourself from bad pitches 

Don’t listen to these stories 

The only two important questions 

Key Takeaways: 

In sales, managers will often tell their people that stories sell and that they do, so you have to watch out for hypotheticals, testimonials, and anecdotal “evidence.” 

Here’s how you can protect yourself from liars who’d sell you stories: write down their sales pitch exactly as they said it and how you understood it...

In this episode, The Annuity Man discussed: 

Annuities for your spouse and loved ones 

Throwing darts at death 

Planning for cognitive decline 

Filling in financial gaps

Key Takeaways: 

Using a trust, you can set up an immediate annuity purchase to trigger when you pass away to provide lifetime income for your spouse using a designated lump sum. You can use annuities to lovingly handcuff your young beneficiaries, providing them with guaranteed income instead of a lump sum. 

Buying an income rider, deferring it out, an...

In this episode, The Annuity Man discussed: 

Solving for longevity risk 

Four products for lifetime income 

Focusing on guarantees 

Key Takeaways: 

There is no ROI until you die. Up until then, it’s a transfer of risk to the annuity company to solve for longevity risk. The longevity risk is the fear that you’ll outlive your money. An annuity will pay as long as you’re breathing, even if you are on a ventilator. 

The annuity industry has four major types: Single Premium Immediate Annuities, De...

In this episode, The Annuity Man discussed: 

Annuities with a push-comes-to-shove feature 

Advantages of liquidity 

Balance between potential and liquidity 

Why flexibility matters in annuity planning

Meeting diverse financial needs through annuity design

Key Takeaways: 

Certain annuity products, such as the MYGA (Multi-Year Guaranteed Annuity), fixed-rate annuity, and CD annuity, offer a liquidity option known as the "push-comes-to-shove" feature, allowing penalty-free withdrawals in case of emergencies.

The "push-comes-to-shove" feature in annuities provides access to funds when faced with unexpected financial circumstances, offeri...

In this episode, The Annuity Man discussed: 

Annuity companies are more regulated than banks 

Features that protect the annuity industry 

There is no run on annuities 

How the banking crisis will affect the annuity industry 

Key Takeaways: 

Annuity companies are more regulated than banks, with features like surrender charges and market value adjustments that prevent runs on the company.

Annuity companies are required to invest in investment-grade bonds, providing stability, unlike banks that had to sell bonds during the recent crisis.

Lifetim...

In this episode, The Annuity Man discussed: 

Why would you want to stop taking in income? 

Three types of irrevocable lifetime income teams 

Light-switch Annuity Products

Key Takeaways: 

There a myriad reasons why you would want to stop taking income, and there are annuity reasons that allow for this. One reason could be if tax laws change in the future and you want to shut down the income stream to not getting taxed, or when you want the income to accumulate for your death benefit.

The t...

In this episode, The Annuity Man discussed: 

The fear of running out of money

Solving the fear of running out 

Is FORO more important the FOMO? 

Using math to address FORO 

Key Takeaways: 

Most of us didn’t grow rich. We saw what it was like to live in scarcity, and today, many of us still carry those scars. Despite having millions or a portion of that, some people might still feel poor and fear running out of money. 

If you’re worried about runni...

In this episode, The Annuity Man discussed: 

The value of annuities for lifetime income planning 

Laddering strategy with annuities 

Placing an annuity inside a trust 

Key Takeaways: 

When it comes to planning for lifetime income, annuities can be a valuable tool. However, it's essential to approach annuities with strategies that allow for flexibility and the ability to adapt to changing circumstances.

By purchasing multiple annuities with different start dates, you can create a steady stream of income that aligns with your needs over time. This approa...

In this episode, The Annuity Man discussed: 

Focusing on contractual guarantees

What annuities solve for 

Common annuity pitch traps 

Key Takeaways: 

Avoid non-guaranteed hypotheticals and focus on contractual guarantees when considering annuities.

Buy annuities for specific needs like principal protection, income, long-term care, or legacy, not for market returns.

Be wary of urgency sales pitches, steak dinner seminars, advisors behaving like friends, backdated performance illustrations, promised market participation with no downside, upfront bonuses, and showing other clients' accounts as proof of returns. 

 <...

In this episode, The Annuity Man discussed: 

An overview of Deferred Income Annuities

Finding the best fit 

Income Riders attached to Indexed Annuities

Key Takeaways: 

DIAs are essentially single-premium immediate annuities deferred past one year. It has no moving parts, no annual fees, and no market attachment, making it a straight transfer of risk for lifetime income. DIAs can be used in Roth and traditional IRAs, and are taxed based on the account type.

DIAs are efficient, no-cost, no-fee transfer-risk pension products that can be defe...

In this episode, The Annuity Man discussed: 

The value of annuities for lifetime income planning 

Laddering strategy with annuities 

Placing an annuity inside a trust 

Key Takeaways: 

When it comes to planning for lifetime income, annuities can be a valuable tool. However, it's essential to approach annuities with strategies that allow for flexibility and the ability to adapt to changing circumstances.

By purchasing multiple annuities with different start dates, you can create a steady stream of income that aligns with your needs over time. This approa...

In this episode, The Annuity Man discussed: 

Should you purchase I Bonds? 

Treasuries are as safe as it gets 

Five places to put your money 

Inflation is personal 

Key Takeaways: 

Purchasing I Bonds is a no-brainer. Go to treasurydirect.gov to buy direct from the treasury I Bonds. 

Treasuries are as safe as it gets because they can tax us and confiscate our money to pay them off, and that would happen if we needed to do that. The downside to I Bonds is that...

In this episode, The Annuity Man discussed: 

Traditional laddering with MYGAs

What is “reversing”? 

Traditional laddering and reversing 

Key Takeaways: 

You do a traditional 3-year, 4-year. 5-year ladder if you are hoping that rates will go higher. It’s a strategy you use when you want to have money as the rates are rising so that you can attach yourself and lock yourself in with those higher rates. 

Reversing is the opposite of laddering; you lock in the MYGA for 10, 9, 7, or 10, 7, or 5 years because the rates are f...

In this episode, The Annuity Man discussed: 

Protecting your beneficiary from dumb choices

How Stan lovingly handcuffs his beneficiaries

Handcuffing your loved ones is good for them

Key Takeaways: 

Lovingly handcuffing your beneficiaries with annuity guarantees protects them from making dumb decisions with lump sums. 

Stan has written in the trust that when he dies, there will be a lifetime income annuity purchase for each of his daughters, guaranteed to pay them for the rest of their life as long as they are breathing. 

Yo...

In this episode, The Annuity Man discussed: 

State guaranty funds 

The true safety of the industry 

Life insurance companies are more regulated 

Assigning unused money to beneficiaries

Key Takeaways: 

If you look at the state guaranty fund, each state has a specific rule in place to protect you and your money in case something happens to the carrier. 

You should be buying the claims-paying ability of the life insurance company from the standpoint of safety. The true safety of the annuity industry is the ind...

In this episode, The Annuity Man discussed: 

Retirement planning is not a game

Asking hard questions

Diversification and limits

Two key questions to ask

Key Takeaways: 

Stan emphasizes that choosing an annuity is not about sales tactics or commissions, but about protecting your life's hard-earned savings and creating a secure retirement strategy.

Always ask detailed questions about the annuity product, understand its contractual guarantees, and don't buy something you can't fully comprehend. If an advisor can't explain it clearly, walk away.

Don...

In this episode, The Annuity Man discussed: 

Income Riders vs. Single Premium Immediate Annuities (SPIA)

Comparison Process

Strict rules 

Probability of Improvement

Key Takeaways: 

Stan explains that in some cases, you can potentially swap an income rider from a variable or indexed annuity for a SPIA with a higher guaranteed lifetime income stream.

To determine if a transfer makes sense, you must: compare the income rider amount, use the accumulation value (not the income rider value), ensure the new annuity provides a higher cont...

In this episode, The Annuity Man discussed: 

Annuities were never meant to be a market product 

The complexity of index options 

Misleading sales pitches to avoid listening to 

Annuities solve for your specific goals 

Key Takeaways: 

Fixed indexed annuities were created in 1995 to compete with CD returns, not to provide true market participation. They are fixed annuities issued by life insurance companies, regulated at the state level, and not securities.

There are over 750 index option choices and 50+ indices, with complex calculation methods that can cha...

In this episode, The Annuity Man discussed: 

You can’t time annuities 

Annuities provide guarantees 

The cost of waiting 

Annuities are not bought for market growth 

Key Takeaways: 

You can't time the market when it comes to annuities - there is no "perfect" time to buy.

Annuities can provide different contractual guarantees like principal protection, lifetime income, legacy, and long-term care coverage.

There is a cost to waiting to purchase an annuity, as you may miss out on payments.

Do not bu...

In this episode, The Annuity Man discussed: 

Gap Filling and Annuity Options:

Social Security Timing and Considerations:

Balancing Emotional and Financial Well-being:

Flexibility and Lifetime Guarantees with Annuities:

Key Takeaways: 

You need to find ways to cover your income needs before Social Security kicks in, typically from ages 62 to 70. Consider using strategies like Single Premium Immediate Annuities (SPIAs) or Multi-Year Guarantee Annuities (MYGAs) to provide contractual income during this gap. SPIAs pay a guaranteed income for a specific term, while MYGAs offer a fixed interest rat...

In this episode, The Annuity Man discussed: 

Retirement planning essentials 

Achieving financial security in retirement 

Determining a lifestyle number 

Key Takeaways: 

Lifestyle income guarantees are crucial for retirement planning, allowing retirees to live their desired lifestyle without worrying about market fluctuations or economic uncertainties.

Annuities are the only financial products that can provide contractually guaranteed lifetime income, which can be combined with other sources like Social Security and pensions to achieve financial security.

It's important to determine a "lifestyle number" - the monthly income...

In this episode, The Annuity Man discussed: 

Annuity companies are more regulated than banks 

Features that protect the annuity industry 

There is no run on annuities 

How the banking crisis will affect the annuity industry 

Key Takeaways: 

Annuity companies are more regulated than banks, with features like surrender charges and market value adjustments that prevent runs on the company.

Annuity companies are required to invest in investment-grade bonds, providing stability, unlike banks that had to sell bonds during the recent crisis.

Lifetim...

In this episode, The Annuity Man discussed: 

4 contractual paths to future income 

Factors that affect the suitability of a plan for your situation 

Immediate Annuities 

No free lunch 

Key Takeaways: 

There are 4 main contractual paths to achieve future income: 1) Buying an immediate annuity when income is needed, 2) Using a "My Go-To SPIA" Fixed-Rate Annuity, 3) Purchasing a deferred income annuity (DIA), and 4) Buying an Indexed Annuity with an Income Rider.

Each of the 4 options has its own advantages and disadvantages, and the best choice depends...

In this episode, The Annuity Man discussed: 

Should you complain about inflation? 

The people actually impacted by inflation 

Annuity products that provide solutions for inflation 

Avoiding media influence regarding inflation 

Key Takeaways: 

Stop complaining about inflation. For those who have worked hard and saved, higher prices for groceries and gas are manageable. Focus on living your life to the fullest rather than worrying about inflation.

Recognize the reality that 60% of Americans are living paycheck-to-paycheck and are severely impacted by inflation. While it's understandable to be c...

In this episode, The Annuity Man discussed: 

Using annuities to create a pension 

The best inflation annuity 

Focusing on guarantees 

Key Takeaways: 

Annuities can be used to create a personal pension that provides a guaranteed lifetime income stream, similar to a traditional pension. The main annuity types discussed are Single Premium Immediate Annuities (SPIAs), Deferred Income Annuities (DIAs), Qualified Longevity Annuity Contracts (QLACs), and Income Riders.

Social Security is considered the best inflation annuity and pension, and no commercial annuity can fully protect against inflation withou...

In this episode, The Annuity Man discussed: 

Options that annuities provide

Living off interest 

When to annuitize 

Laddering interest rate movements 

Key Takeaways: 

Annuities provide more options than just immediate lifetime income annuities. There are various types like Multi-Year Guarantee Annuities, Index Annuities, Variable Annuities, and Deferred Income Annuities that can be used for different income needs.

With current interest rates, it may be possible to live off the interest from a portfolio of fixed-rate annuities and CDs without having to annuitize and lock i...

In this episode, The Annuity Man discussed: 

The Annuity Pill

Questions to ask when considering an annuity 

Annuities are contracts 

Key Takeaways: 

Remember the acronym PILL, as the four primary things that annuities solve for. P stands for principal protection, I stands for income for life, the first L stands for legacy, and the other L stands for long-term care. 

When considering an annuity, ask yourself these two important questions: “What do you want the money to contractually do?” and “when do you want those contractual...

In this episode, The Annuity Man discussed: 

Buy only what you understand

Don’t fall for bad sales tactics 

Seeking the facts 

Key Takeaways: 

Annuities should be simple and easily understandable; if not, avoid purchasing them.

Don't fall for misleading sales tactics, bonuses, or unrealistic projections from agents motivated by personal gain.

There are extensive options for index annuities, but few experts; exercise caution, do not trust sales pitches, and seek factual information from credible sources.

"If you can't explain...

In this episode, The Annuity Man discussed: 

Annuities are DIY products 

Focusing on contractual guarantees 

What annuities solve for 

Key Takeaways: 

Annuities are do-it-yourself products that allow self-management without advisor fees. Annuities provide contractual guarantees, and shopping for carriers with the best rates is important.

Annuities are for do-it-yourselfers focused on contractual guarantees, not hypotheticals, sales pitches, or hype.

Annuities can solve principal protection, income for life, legacy, and long-term care needs for pro-consumer buyers.

"For all of you do-it-y...

In this episode, The Annuity Man discussed: 

How lifetime income is priced 

Don’t time annuity purchases 

Laddering annuities 

Key Takeaways: 

Lifetime income annuities are primarily based on your life expectancy. Interest rates play a secondary role in the pricing. 

Higher interest rates will positively impact annuity pricing. Don't try to time the market for annuity purchases; base decisions on contractual guarantees.

Consider laddering annuity purchases to take advantage of future pricing changes.

"Remember, lifetime income annuities are primarily based on y...

In this episode, The Annuity Man discussed: 

What a MYGA and SPIA is 

MYGA to SPIA Strategy 

Flexibility and Control 

Key Takeaways: 

MYGA is the annuity industry's version of a CD, offering locked-in, non-callable interest rates annually. SPIA is the original lifetime income annuity, with a long history dating back to Roman times and used for pension payments.

Use a MYGA to lock in a guaranteed interest rate for a specific duration, such as five years then take out interest or up to 10% penalty-free, depending on the...

In this episode, The Annuity Man discussed: 

What annuities are for 

Establishing an income floor 

How to actually adjust for inflating needs 

Securing an income stream through annuities 

Key Takeaways: 

Annuities provide contractual guarantees for principal protection, lifetime income, legacy, and long-term care (PILL acronym), offering advantages over market investments focused solely on growth.

Prioritize establishing an income floor or guaranteed income stream, particularly through fixed annuities, to cover essential expenses in retirement.

Reject cost-of-living adjustment annuities and instead incrementally purchase additio...

In this episode, The Annuity Man discussed: 

An overview of Deferred Income Annuities

Finding the best fit 

Income Riders attached to Indexed Annuities

Key Takeaways: 

DIAs are essentially single premium immediate annuities deferred past one year. It has no moving parts, no annual fees, and no market attachment, making it a straight transfer of risk for lifetime income. DIAs can be used in Roth and traditional IRAs, and are taxed based on the account type.

DIAs are efficient, no-cost, no-fee transfer-risk pension products that can be d...