Date the Annuity Rate…Marry Lifetime Income: Shootin' It Straight With Stan
Welcome to Shooting It Straight With Stan. I'm your host, Stan The Annuity Man, America's annuity agent, licensed in all 50 states. I am glad that you joined me for a topic that I have coined the phrase. I've coined this phrase, and it's being used across the country, which is a good thing because it's informative. It's easy to remember and explains a lot when it comes to the annuity category. The topic is Date the Annuity Rate, Marry for Lifetime Income. We've all done this. I dated the lovely Christine, wife of 35 years, for four years. I gave her the chance to opt out, and she didn't. She should have, but she didn't. She's been with me for 35 years and counting, and I really appreciate that. She's been fantastic and is the rock of The Annuity Man. She's not a big fan of the annuity goatee.
People said the other day, "Stan, you keep talking about the annuity goatee that you have. We can barely see it." I know. It's gray. Why don't you grow a beard? Then it wouldn't rhyme with annuity. I'm Stan The Annuity Man, America's annuity agent. There's got to be an annuity goatee. But when we're talking about annuities, and there's many different types. Well, I don't know. You already own one, Social Security. You know that. If you have a pension, you own two. There's an argument that you actually own three, which is the RMDs from your IRA, which is a forced annuity, but when I say that, the gurus of the world start, "You don't know you're talking about, Stan." I'm like, "Yeah, I do. If you think about it, it actually makes sense."
But when we're talking about lifetime income, and you go to my site, there are four ways to do lifetime income, which are Single Premium Immediate Annuities, Deferred Income Annuities, Qualified Longevity Annuity Contracts, and Income Riders attached to typically Indexed Annuities. We don't look at the Indexed Annuity caps and sprays and participation rates and upfront bonuses. We don't look at any of that. We just look at the contractual guarantee of the Income Rider, and the Index Annuity is nothing more than a delivery system for that. That's how we do lifetime income, but when we're looking at lifetime income, 99.9999999% of the time, we're choosing A+ or better carriers.
I love these statements I get. Now, before I even start the conversation, I don't get a lot of calls. If you schedule a call with us, there's about a 5% chance you get me if my schedule's open. The other calls will go to my team, who's much smarter than me anyway. But before they even start speaking, I'm like, "Listen, do not say the following phrase to me. Stan, don't put me with a crap company. I want a solid company."
It's A+ or Better
Listen, I'm not going to put my license on the line for you. Nobody in my team's going to do that. They're all licensed. I'm just saying if we recommend it to you for lifetime income, it's A+ or better. Now, there might be an exception here or there. There's a recent one, and I won't name the company. They were purchased by a huge, huge company. Their ratings are going to go from A- up from there. We're looking at that. We are constantly doing our analysis on the Claims Paying Ability of the carrier, but to make it very, very, very, very, very, very, simple for lifetime income, A+ or better, period.
After we say we run the quotes, we run the quotes with all carriers, and you see A+ at the top and A++ and A+, and then say, "Well, what happens if they go out of business?" I'm going to blast you with some fun. I'm going to say, "Well, I guess we'll be in the grocery store fighting for bread, and there'll be no power because there'll be no power grid." Don't come to me and say, "Well, nothing's too big to fail, Stan." A+ rated carriers can back up your lifetime income stream period. They just can.
I know you have the tendency to compare it to banks. Annuity companies aren't banks. There's no window to run to for liquidity like you can at a bank. There's just none, and the products aren't structured that way, like a money market or a checking account where you can go get all your money out and put it in the backyard where it can be eaten by bugs and things like that. No, you just can't do that. A+ plus or better for lifetime income, it's a no-brainer.
Now, fortunately, we pretty much represent every single carrier out there, licensed in all 50 states. You can run those quotes yourself. We have a MYGA live feed, SPIA, DIA, QLAC, and Income Rider calculators. You can run lifetime income quotes 24/7/365, and you'll see the listings of those companies. And in our opinion, A+ or better for lifetime income. That's how you filter it, and if it's a company you've never heard of, that's because they didn't spend a lot of money on TV ads, which is probably a good thing.
Multi-Year Guarantee Annuities
Let's talk about the other side of that. Right now, at the time of this blog, a lot of people are buying what's called Multi-Year Guarantee Annuities, Fixed-Rate Annuities, the annuity industry version of a CD. Don't make it any more difficult than that. I love it when people say, "Wait a minute, but is it triggered for annuitization?" No, it's not triggered. "Well, what happens at the end? Just the money goes poof?" No, you control the money. We can send it all back or move it to another one. It's a CD, Chester. It's a CD. It works just like that. The life insurance company that issues the MYGA, issues the annuity. They're the issuer instead of a bank or a brokerage firm issuing the CD. You're locking in a guaranteed interest rate for a specific period of time that you choose. Right now, you can get 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10-year lock-ins. Those are not callable. That's a great part about Multi-Year Guarantee Annuities. They're not callable, meaning the life insurance company can't call that money back in if interest rates go down.
Spoiler alert: they're going to go down. The bell doesn't ring at the top or the bottom, but right now, at the time of this blog, check the date and then go to my site, pull up the MYGA rate feed, put in your state and put in the durations and look around. You're going to see some good yield numbers. But when we're looking at MYGAs, we're not marrying those companies. We're dating them. We're dating them for that duration. In other words, let's say you say, "Okay, Stan, I want a three-year MYGA and a five-year MYGA." We're dating the carrier for the three-year MYGA. We're dating the carrier for the five-year MYGA. At the end of that term, we're going to be in touch with you right before the duration ends and say, "What do you want to do with the money? You want to send it back to the IRA, Roth IRA, or wherever it came from, or do you want to roll it to another one, non-taxable event?" We're dating the company, meaning that it might not be A+, it might not be A, it might not be A-. It might be B++, but we're dating the company. We're basing our decision and recommendation on the Claims Paying Ability for that duration because we're not marrying them.
It's hard for Southerners to say marrying for some reason. I don't know why. I think it's because all of our words kind of run together. Anyway, we're not marrying the MYGA, we're dating the MYGA, but we're marrying lifetime income. It's an easy way to figure it out. Once again, if we're talking on the phone and you say, "Well, what's the best five year? What would you recommend?" We say, "XYZ company, and they're B++," please don't come back to what if they go out of business?
Maximize the Yield
Listen, we've looked at it. We're not perfect. We've looked at it, but we're dating the rate. We're not marrying them for lifetime income. We're dating the rate. In pretty much all cases, we're not going to sell a lifetime income product with a B++ carrier; nothing against them. We're selling A+ or better for lifetime income, but we are going to date the rate, and we are going to try to maximize that yield for that specific duration, knowing that we're not going to be there.
These are little verbal hacks to put in your brain. For example, there's no ROI until you die. People love that one, which is all about transfer risk, lifetime income. You can't look at the return on investment but date the rate. You're dating the rate, and you're marrying the lifetime income. Marrying the lifetime income means A+ or better. Dating the rate can mean any rating we deem appropriate and have looked under the hood of their financials for that specific duration.
Your Terms, Your Timeframe
I had a guy the other day who started the conversation off. He had heard me say this in a previous conversation with him and held onto it: hey, we're dating the rate. We're looking at these other companies. He goes, "My wife and I talked about dating the rate and all that stuff, but we feel comfortable. We're not going to do that. We're going to do A++ carriers or A+ carriers for MYGAs." I'm like, "Whatever. It's your money." One of the things you're going to find out by working with The Annuity Man is that we're very respectful of your money. We're very respectful of the decision you're going to make, whether to buy or not to buy from us. You're going to make it on your terms and your timeframe without pressure. I know you're saying, "I don't believe that."
Try us. We're not going to chase you down, but it really comes down to what you feel comfortable with. I have many people say, "I'm just going to go with A+ or better, A++ or better on the MYGAs too. Not only will we do that on the lifetime income, I will also do that on the Fixed Rate Annuities." That's fine, that's fine, but what I'm saying is we can maximize the interest rates on MYGAs because we're dating the rate. It doesn't mean you have to, but that's my take, and that's my strategy.
As America's annuity agent, licensed in all 50 states, people call me as they see me walking through the airport, "Hey, Annuity Man. Hey, Annuity Man." I had a nice lady the other day. I was flying into San Francisco for other business, as they say, and she stopped me. "Hey, aren't you Stan The Annuity Man? I was incognito. I wasn't wearing all the garb. Can you believe that? She was a nice lady, and I took a picture with her. If you ever see me in the airport, stop me. Don't punch me. Well, you can punch me. Actually, don't do that. I'm fragile, and I'm old. You can see by my goatee that it's gray. It's not coming in auburn anymore. I don't know who to blame for that. Do I blame my great employees and staff at The Annuity Man? No. No. I don't do that. Do I blame my wife? No, not my wife or kids. That doesn't work, either. It's me. I'm just getting older. I know you're saying, "I know, Stan. No way. You're getting older." It is. It's true.
Hey, by the way, that's Shootin' It Straight With Stan. My name is Stan, The Annuity Man, and 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.