Do Rich People Buy Annuities

Do rich people buy annuities? Don't we hate rich people? Are you rich? I mean, evil? Are you one of those "evil rich"? I think we all are, in some ways, right? When they start collecting taxes, we all get that feeling. But do rich people buy annuities? Yeah, some do, some don’t. It really comes down to if they want to transfer risk. Many wealthy people are rich because they’re smart, and intelligent people like to transfer risk. Annuities are contracts that allow you to do just that.

That doesn’t mean that every rich person—the one-percenters—needs to buy one, but yes, they do buy them, and I’ll give you some examples. Hang in there because we’re going to talk about those evil one-percenters!

Why Do Rich People Buy Annuities?

You’re probably sitting there thinking, “I’m part of the 1%!” I like that. You’ve worked hard and made money, and now you're researching to see if you, the rich person—or even if you’re not rich, but you think you are—need an annuity. Let’s figure that out!

So, why would rich people buy annuities? Well, rich people like:

• Principal protection
• Providing a legacy to their beneficiaries
• Transferring the risk for long-term care
• Guaranteed income streams
• Protecting their money from frivolous lawsuits and creditors

And you know what? Not just rich people like that. All of us like that, too. Nod your head if you agree! These are the reasons they buy annuities.

For example, I live in Florida and spend a lot of time in Texas. Both of those states—and others—protect annuity owners from frivolous lawsuits and creditors. But there are rules. You can’t just stash your ill-gotten gains in an annuity if you're a criminal. However, for the person who has worked hard, you can protect your annuity from being seized by creditors in certain states.

So, many wealthy people use annuities to protect themselves in our litigious world, but they also buy them for lifetime income streams. Many rich people buy annuities for their spouses, kids, or grandkids.

How Rich People Use Annuities

Wealthy individuals often buy Multi-Year Guarantee Annuities (MYGAs) in Florida, Texas, and other states. These are used in non-IRA accounts, where the interest grows tax deferred.

Most rich people—and most people, in general—don’t want to pay taxes. If you wish to pay more taxes, that’s up to you. But rich people typically don’t want to. That’s why MYGAs fit their needs—they allow for tax-deferred growth.

You might ask, “Well, why wouldn’t they just buy a CD?” Well, CDs are great products. They’re FDIC-insured, etc. However, with non-IRA accounts, you have to pay taxes on the interest from CDs annually. Rich people don’t like that, so that’s where MYGAs come in.

A Story of a Rich Client

Here’s a story. A guy called me recently—he’s a futures trader, a corn futures trader, I think? Honestly, I don’t get that business, but he makes a boatload of money. He’s multi, multi, multi-millionaire. Why would a guy like that buy an annuity?

He said, “I do my thing—corn futures—but my wife doesn’t care about corn futures. I want to buy an immediate annuity or a deferred income annuity that will start at a future date so that there’s an income stream when I’m gone. She’s not going to take over my trading business.”

Here’s a guy who is ultra-rich and doesn’t need an annuity, but he’s buying one to transfer risk and provide guarantees for his spouse. And she’s happy because all she cares about is spending time with the kids and grandkids.

Why Annuities Work for Rich People

So, do rich people buy annuities? Not all of them do but more and more do because they understand the benefits of transferring risk and protecting assets.

But let’s be clear: annuities aren’t just for the rich. Everyone needs an income floor, long-term care protection, and principal protection. We all don’t want to pay more taxes, right? So, rich or not, we all face similar financial needs. So, next time you’re throwing rocks at the yachts, remember, we’re all the same!

Conclusion

Okay, rich people, future rich people, and those who want to be rich—here’s the scoop. Now, remember I just talked about MYGAs, where the rich stash their money so they don’t have to pay taxes on interest. I’ve done a video on MYGAs and the best rates available, and I’ve even written a book about it that you can download for free. There is no obligation—no one will call you, but you will get the books to continue your annuity education.

Thanks for joining me, and I’ll see you next time!