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Annuities Will Do What You Contractually Need: Shootin' It Straight With Stan

Stan Haithcock
March 6, 2024
Annuities Will Do What You Contractually Need: Shootin' It Straight With Stan

Welcome to Shooting It Straight With Stan. I am your host Stan The Annuity Man, America's annuity agent, licensed in all 50 states. Today's topic is a very good one and one that I want to stick in the back of your head, your cerebellum, whatever that is. I want it to be what they say in the music industry, an earworm, meaning it's just stuck in there. And the title is Annuities Will Do What You Contractually Need. So, when you look at annuities, there are so many different types. Please don't fall into the stupid category of "I hate all annuities," "All annuities are bad," or "All annuities are expensive." Or the ad on TV that says, "If I bought an annuity, I'd rather go to burning hell," or whatever that thing is. You're smart enough to know that with those types of statements, there's a ploy to push you away from annuities so they can charge you for what they do, right?

‌But I've been on the warpath out here, the contractual warpath for so many years, decades, pounding away at you should own an annuity for what it will do, not what it might do, and the will do are the contractual guarantees of the policy. And I pound that table so hard because when you buy an annuity, any type, you're going to get a policy in the mail, and it's going to be a contract. Policies equal contract. That's what they are. Because you're getting a contract, base your decision on those contractual guarantees.

‌Pioneers Take All the Arrows

‌Now, the problem that we run into, we meaning The Annuity Man, the leader, pioneers take all the arrows out here. There are a lot of annuities that are sold and sizzled on what it might do, what it could do, what it should do, what it can do, what it 10 years back tested has done when the unicorns chase the butterflies to part you from your money. I understand that those stories can sound very, very good and very, very appealing because you want to have your cake and eat it, too. You want the contractual guarantees of policy, but boy, you want market returns, too. So, it sounds good. Take this pill, don't exercise, and you can be skinny. Or in a marriage scenario, get married, never talk to your spouse, and things will go well. No, it doesn't work like that as we all know.

‌The reason that I keep coming back to this, and if you're kind of a first timer that just stumbled across The Annuity Man, if you go back to my thousands of videos and my seven books that I've written and 500 plus articles and all the interviews that I've been on for the decades that have been doing this, I have been the contrarian, the canary in the coal mine in the annuity industry saying, "Hey, all this hypothetical theoretical stuff's being pissed out there, be careful. You might not get what you want. You might not get what's pitched." And if it sounds too good to be true, it is every single time without exception.

‌Annuity Types

‌So because of that, why not just go with the contractual guarantees of the policy? Now, some annuity types, like Single Premium Immediate Annuities, Deferred Income Annuities, Qualified Longevity Annuity Contracts, Multi-Year Guarantee Annuities, and traditional Fixed Annuities, are contractual guarantee products. There are no moving parts, there are no hypotheticals, there are no what-ifs. There's no potential for it to change. There are annuity types that lock you into the contractual guarantees of the policy. We love those policies. Another contractual guarantee with an asterisk beside it is an Income Rider that you can attach to either an Index Annuity or Variable Annuity. We don't sell Variable Annuities because we don't sell anything that has the potential to go down, and we don't like those fees attached. And there are many types of Income Riders attached to Variable Annuities. There are around four. If you go to my site at The Annuity Man , you can download and get the book for free digitally. I go through all types of Income Riders, etc.

‌Income Riders

‌But Income Riders, the vast majority of them attached to Index Annuities, and the reason we only look at those, is that historically, those Income Riders are contractually higher than the ones attached to Variable Annuities. But the vast majority of those Income Riders are contractual. They're not going to go up. They're not going to go down; that's a static payment, etc. There are some unicorns chasing the butterfly, which is very misleading at this point at the time of this blog; check the date, Income Riders, and a handful that the agent will stand up at the very expensive steak dinner seminar, I.e., bad chicken dinner seminar, and say, "This one increases with inflation." Garbage. Just remember, annuity companies don't give anything away. They have the big buildings for a reason. They're sponsoring sports stadiums for a reason, and that reason is that they're in the business of making a profit, which means they don't give anything away.

‌So, suppose you're looking for an inflation increase to a contractually guaranteed Income Rider. In that case, all the annuity company will do is drastically, severely, typically at 20% to 40% decrease in the income start amount compared to a similar product that doesn't have that potential increase. This leads us back to the title of the talk and the topic today, which is annuities will contractually do what you want them to do.

‌The Two Questions

‌When you go into the buying decision or the evaluation of annuities, there are two questions. What do you want the money to contractually do? When do you want those contractual guarantees to start? The key word in both of those questions is the word contractual. Underline it, capitalize it, bold it, whatever, not hypothetical. If anyone's pitching you hypothetical, say, "No, no, no, no. Stan said to tell me about contractual. I want to know the contractual. I'm going to base my guarantee on the contractual guarantee of the policy."

‌Now, some products exist that agents and advisors too often push the limitations of hopes and dreams to get you to think you're getting something your neighbor doesn't get or you found the right product. Those could be Index Annuities, Buffer Annuities, Variable Annuities, or anything with a non-guaranteed accumulation value. Those numbers can be juiced, you can be promised, etc. Just understand if you want market growth, if you really, really want market growth, there's not an annuity at the time of this blog that does that. True market growth. True upside. Okay? You can't have market upside with no downside. You just can't. I know that's a pitch. I know there's a pitch out there, market participation with principal protection. I understand the pitch. The Buffer Annuities, those are what I call copay annuities. Nothing against them. It's just that if your goal is market returns, true market returns, then don't buy annuities.


‌I have an acronym called PILL, which stands for principal protection, income for life, legacy, and long-term care. So, once again, P stands for principal protection. I stands for income for life. L stands for legacy, and the other L stands for long-term care. If you do not need to contractually solve for one or more of those items in the PILL acronym, then in my opinion, you do not need an annuity. And if you go outside of that rule and want a G for growth or want an M for market, which doesn't fit into the acronym PILL, obviously. That would make it sound weird. And there's a reason for that. But if you go outside of that, you're most likely going to be very disappointed because most of the projections, back-tested numbers, hypotheticals, theoreticals, what I call unicorns chasing butterflies, they never ever come true, ever.

‌Now, there is nothing wrong with those products. If you fully understand them and it's been fully explained to you and you've read all you need to read on it, go for it. But in my world, Stan The Annuity Man, America's annuity agent, I'm actually the leader, the thought leader out here. I'm going to tell you that because no one's addressed this topic with as much content as I have, period. Nobody. It's not even arguable. Thousands of videos, seven books, hundreds of articles, hundreds of interviews, and the message is the same. You own an annuity for what it will do, not what it might do. You own an annuity for the contractual guarantees, not the hypothetical pitch. And if you remember one thing going into your annuity analysis or decision, if you understand that, you're going to be fine. If you fall for the pitch of the non-guaranteed scenarios, you're going to be disappointed.

‌You Want Guarantees

‌And I'm convinced that the bad reputation that the annuity in the sales part of the industry has earned is based solely upon the non-guaranteed sales pitch. And I see the industry going my way. I've said this before, if they would just go my way and adopt the "will do, not might do," the industry would triple and maybe quadruple because baby boomers, people like you, or if you're not a baby boomer, but people like you that are thinking about retirement, looking at retirement, planning for retirement, planning for chapter two of your life, you want guarantees. You want guarantees on top of the Social Security annuity guarantee you have. You want guarantees on top of a pension from your employer if you're so fortunate to have those guarantees. You want guarantees on top of AAA, AAA municipal bonds, CDs, money markets, or treasuries. You want guarantees.

‌You've done hypothetical; you've done that. Chapter two of your life should not revolve around hypothetical returns. It should revolve around two things; contractual guarantees and lifestyle, period. You can add family, but family is kind of a subset of lifestyle. You ask, "Well, Stan, you talk all that junk about annuity and guarantees, what are you doing?" That's what I do. Everything, every penny that I have, every penny is contractual. And now you're saying, "Well, that's not smart, Stanley, because you're missing out on the potential market returns and Bitcoin and all these great things and AI." Yeah, I'm going to miss out, but it's okay. I'm okay with that. I'm okay with going to the cocktail party, which I don't drink anymore, but the cocktail party holding my Perrier with a lime and saying, "Yep, missed that one. Yeah." And then following up with, "Yeah, but I pay no fees on anything and everything's contractual. Or if I pay fees, they're so minuscule, you can barely find them. You have to bring out the magnifying glass."

‌So, to wrap this thing up in a nice bow, put a bow on it; post-Christmas, annuities will do what you contractually need. The question is, what do you contractually need? Is it principal protection? Is it income for life? Is it legacy? Is it long-term care, confinement care? If it's not one of those four, you don't need an annuity, period. Go to my site at The Annuity Man . Schedule a call with us. We will listen to you using our ears and mouth in proportion two to one, and we will tell you if you don't need an annuity, we'll tell you if you're off base. We'll tell you if you're dreaming, we'll tell you if the sales pitch you've heard is crap, respectfully, and we will tell you how to position them properly in your portfolio.

‌My name is Stan, The Annuity Man. That is Shooting It Straight, or Shootin' It in the south, Shootin' It Straight With Stan. I'll see you next time.

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.

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