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Annuity Strategies For Cognitive Decline: Shootin' It Straight With Stan®

Stan Haithcock
December 21, 2022
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Today's topic is a tough one, a real one, and one you will have to address eventually. It's cognitive decline annuity strategies. I want you to listen to me closely here because I'm talking to all of you A personality kickers out there. You know who you are, male and female, that's hitting on all cylinders. You might be 70 or 80 years old, and you're just hammering it. Your brain is clicking. But eventually, it will not be, and that's a tough one.

I've got so many things going, and my brain's all over the place, and I'm going a hundred miles an hour and never shut it down. In fact, I'm one of those people who get the flu if I ever stop working or take time off during the holidays. I get the flu so bad they have to hospitalize me. It's like when I shut my body down, my body doesn't know what to do with it. All those defense mechanisms they've been putting up for all this time, they say, "Okay, all the diseases come in, and just take him out." So if you're one of those people, and you might be, I want you to think about the future as my friend Bill Black says, "You know, Stan, one out of one us is going to die." I'm like, "You think?"

The Three Stages

I always talk about the three stages of retirement preached to me by a recent podcast guest: Go-go, Slow-go, and No-go. You might be in Go-go right now, which means you're just hitting on all cylinders. It doesn't matter what age you're at. You might be 70, but you feel 40. You're just hammering it. You're in shape. You take care of yourself. And then you get into Slow-go, and you say, "Wait a minute, things are starting to hurt. I'm a little slower. I forget things, kind of." And then the No-go is, you can see the finish line if you know what I mean. Or the finish line's coming up sooner than later. I am imploring you to, encouraging you, and leaning on you to start considering cognitive strategies from a turnkey standpoint. Whether it's for you or your spouse or for both of you, it doesn't matter. You need to do that.

Fast or Slow?

Now, this is tough. From an ego standpoint, this is a hard one for all of us, but it has to be in place. The challenging part is, do you take investments in the markets that have the potential to grow and do well? Do you take those and start slowly or quickly, depending on where you're at, putting them into lifetime income products or guaranteed interest products long term? I got a call today that was interesting. It was the impetus of this video, even though I talk about it a lot. I wanted to hammer it again because when they said it, I was like, "That makes sense." I had a son and his mom on the phone today; she was 85 or 86. I can't even imagine myself making it that far. I went hard at it early on, and as I said to my daughter, "I don't want you to be like me because I burnt the flame at both ends. But boy, what a flame that was." I mean, I burnt it at both ends. The point is, the son is like, "Stan, the annuity man®, America's annuity agent® licensed in all 50 states." Yes, he said that as a joke. "I think we want to lock in a 10-year MYGA for my mom at 85." And I know all of you are going, "Wait a minute! That's not suitable! She'll be 95 when that MYGA matures." That's not the point. The point of the strategy was we could get a very, very good interest rate, and she could lock in a high-interest rate for ten years and not worry about it. Think about it now. She didn't need a lifetime income stream. She didn't need to annuitize the money. She just needed to protect the principal, not pay any fees and get a great interest rate. And people say, "Well, I would never lock in for ten years." Okay, great. Then lock in for five or three or seven or whatever. But you see my point, and you see their point.

Lifetime Income

Most of the calls I get are for lifetime income. And the tough conversations I'm having with A personalities, probably like yourself, is, this is tough to annuitize the money. And when you annuitize with Immediate Annuities, Longevity Annuities, also called Deferred Income Annuities, Qualified Longevity Annuity Contracts, Income Riders, or Lifetime Income. When you're doing that, you're saying, "I'm not going to get market growth. I'm not going to participate in Jim Kramer, CBNBC, Fox Business Up world, or whatever markets are going to do. I'm not going to do that. I will lock in a guaranteed lifetime income stream as part of my income floor in combination with Social security."

There will come a time, the Slow-go and the No-go years, when not only do I not want to worry about it, but I won't be able to worry about it. Or because I can't worry about it or I won't be able to worry about it. I want to ensure my spouse, who doesn't care about the markets, doesn't have to worry about it. I've been in the financial business since I got out of college. Dean Whitter, Morgan Stanley, Payne Webber, UBS. My wife could not care about markets, volatility indexes, annuities, or any of it. She could care less! She's a clinical psychologist by trade who's working on me as a lifetime project, bless her heart, but she doesn't care. All she cares about is her lifestyle. And if she can see our two daughters and eventual granddaughters and grandsons, that's all she cares about.

And, if you think about it, that's what we should be thinking about in the Slow-go, No-go, and Go-go years. Family and health first. All these other stuffs irrelevant. I've been saying it for a long time and getting a lot of blowbacks. If you won the game, why are you still playing? If you have it, would more money change your life? Can you just put it on a contractual path and, as the bad TV commercial says, "Set it and forget it"? Maybe that makes sense to you.

I want to pound into your head the eventual cognitive decline of that incredible brain that you have. That brain that has built this net worth that you've created, that brain that has gone from probably lower middle class or lower class to where you are now. That brain that got you through college or got you through a trade, or got you through a business idea that you've built and scraped and taken risks. That brain that has brought you here, that brain that's letting you listen to this with an open mind, knowing that eventually, that engine's not going to be firing on all cylinders.

Transfer of Risk Products

Annuities are transfer of risk products. They solve for four things, Principal Protection, Income for Life, Legacy, and Long-Term Care (PILL). If you don't need to solve those contractually, you don't need an annuity. But in the Slow-go and No-go years, the PILL acronym makes sense. You're either going to protect the principal and turn it on and just lock and load, get that guaranteed interest rate. Or you're going to get a lifetime income stream for either you or you and your spouse as long as you're breathing, even if you're on a ventilator. And if one of you dies, the income stream continues uninterrupted and unchanged. And we can structure that policy so that 100% of any unused money goes to the list of beneficiaries in full. And the evil annuity company never keeps a penny, even though they're contractually obligated to pay as long as you're breathing. Those are cognitive strategies. Another cognitive strategy would be if you can't qualify for life insurance but buy a fixed annuity with a built-in contractual death benefit that's a guaranteed issue product. Meaning you don't have to go through any medical underwriting. That's a cognitive strategy. Protecting the principle and Long-Term Care is a cognitive strategy, but Lifetime Income is the ultimate cognitive strategy.

Chapter two is an interesting time period. With 11,000 baby boomers hitting age 65 every day, chapter two of your life is managing your retirement and the assets you have grown. You are managing your lifestyle and skating to where the puck will be. Wayne Gretzky always says, "Don't skate behind the puck. Skate where the puck's going to be." What that means in English to people that don't know hockey, prepare for the future. Prepare for the eventualities of your cognitive decline. I hate to be Mr. Non-motivation, Mr. Anti-Tony Robbins, but we all know that if you live long enough, it will happen. If you know that, and I'm sitting here reminding you very gently, let's plan for it. Let's plan for future income.

Client Example

I'll leave you with this story; you don't have to implement it now. I was on a phone call the other day, and the gentleman said, "Stan, as long as I'm hitting on all cylinders, I can handle it." And I'm like, "Fine. Fine." And he was against taking money out of the markets and moving them to boring and contractual annuities and the fear of missing out and all that stuff.

I said, "Well then, put in your trust that upon your demise, a lifetime income annuity needs to be purchased for your spouse to solve for a specific income amount." You can do it like that, and you can do it based on you dying. But what I want you to think about is, what if you're drooling and haven't died yet? I mean, that's tough, but what if! We all know somebody that was hitting on all cylinders that either had a stroke or an accident or a fall, hit their head or something, and all of a sudden, it's game over. They can't make those decisions anymore. Having been doing this for three decades, this is my comment to you, my encouragement to you, me leaning into you, me professionally nudging you. I've been to the rodeo and seen some horror stories. I'm begging you not to have the horror story. I beg you to consider and connect with us to have that discussion. Let's have the discussion about your cognitive decline. I have thousands of clients with a cognitive decline strategy in place. Whether it's immediate or down the road. That sounds morbid. That sounds like I'm the grim reaper of annuity truth, maybe. But I'm a pessimistic realist, is what I am. I'm a glass half full, but I know that the glass could fall and break, right?

I hope this helped. I hope this helped smack you a little bit, hitting you with a two-by-four in the forehead to say, "Wake up!" And stop putting things off, saying, "Yeah, it's going to happen, but I'll get to it later." No, get to it now. Get to the cognitive decline strategies now. If you don't do it for yourself, do it for your spouse, significant other, or family. Do it for them. They'll thank you for it if you have 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.

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