Don’t Be an Annuity Hypocrite: Shootin' It Straight With Stan
Welcome to Shootin' 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 Don't Be an Annuity Hypocrite. I keep pounding the table all the time about this. I'm growing weary of the stupid people out there that are saying, "I hate all annuities, annuities are all bad, annuities are all expensive, or never look at an annuity." Those types of things.
That's an Annuity Too
Let me point out why that's hypocritical, and I'm going to do it with facts. Number one, you already own the best inflation annuity on the planet, Social Security; it's an annuity. It pays you as long as you're breathing. So, if you hate annuities, if you truly do and you're going to put your foot in the ground and put your flag of hate down, then call the Social Security Department and cancel the payments.
If you're an advisor out there, aka master of the universe, and you hate all annuities and never let your clients ever buy an annuity of any type, I mean, there are 10 to 12 types, however you want to count them, then do not as an advisor advise your clients on Social Security payments because you're a hypocrite. If you have a pension payment from your employer, if you work for the state, local government, federal government, or a good labor union, etc., you have a pension. That pension is an annuity, a lifetime annuity. So, if you hate annuities, don't be a hypocrite. Take the lump sum. Don't take the payments from the pension because that's an annuity.
Let's go further. If you say, "Listen, I hate all annuities because I don't need the income. I don't need lifetime income, and the evil annuity company keeps money when I die." That's crap too, because we can structure lifetime income so that 100% of any unused money goes to the list of beneficiaries, and the annuity company doesn't keep a penny even though they're on the hook and contractually obligated to pay as long as you're breathing.
But if you say, "I don't need lifetime income; I still hate annuities." Do you hate CDs? Do you hate those guaranteed interest rate payments? Do you hate bonds? Do you hate those guaranteed interest rate payments? Because if you're going to, again, be an annuity hypocrite, then you need to cancel all your CDs and all your bonds because there's an annuity type called Multi-Year Guarantee Annuities that have a guaranteed interest rate, protect the principal and function very eerily similar to CDs. The difference is brokerages and banks issue CDs, and life insurance companies that issue annuities issue Multi-Year Guarantee Annuities MYGAs, Fixed-Rate Annuities. So once again, don't be an annuity hypocrite.
Here's another annuity that you own, and there are some arguments against if this is even an annuity but let me explain it. Everyone that has an IRA-qualified type asset at the age of 73 at the time of this blog, the IRS lovingly taps you on the shoulder and says, "Oh, by the way, whether you need the money or not, you're going to have to start taking payments." Those are called Required Minimum Distributions, RMDs from the IRS Internal Revenue Service. It's going to happen. Every year, with the RMDs, you have to take payments from your IRA, so every year, it's a payment. Sounds very similar to a forced annuity to me. Now, it could be for life, depending on if you outlive the assets, or it could be for a period certain if you draw it down to zero. But regardless, it's a payment that will happen every year, whether you want it or not.
So, it looks like to me, if you don't have a pension and you hate all annuities, you have two annuities. Social Security and then the RMD payments that's the forced annuity payment on you at age 73 at the time of this blog.
Do You Know What You're Talking About?
Here's my point to all of this. If you don't know what you're talking about, don't talk about it. I do not do color commentary on ballets. I went to a recent Broadway play. I don't comment on that. I don't know anything about it. There are a lot of people and a lot of advisors that don't know anything about annuities yet, they comment on it, which is interesting. But they're making fools out of themselves.
Now with 11,000 baby boomers hitting age 65 every single day, looking for guarantees, whether it be lifetime income or principal protection, legacy-type guarantees, or long-term care. I have an acronym I've come up with for what annuities solve for PILL, Principal protection, Income for life, Legacy and Long-term care, P-I-L-L. There are a lot of people looking for that. Every single person with a Social Security number already owns the greatest inflation annuity on the planet, and that's Social Security.
Don't Broad Brush the Industry
One of my goals out here as Stan The Annuity Man, and I'm doing all these videos and writing the books and going on TV and radio and all that stuff, is to say to people, let's stop with the knee-jerk broad brush, 30,000-foot nonsense comments about annuities. A good friend of mine, John Olsen, who is a thought leader in the annuity space and a good friend and a great man, always says to me, "Stan, anytime someone starts a sentence, 'Annuities are,' and then whatever they put, most of the time what they're saying is incorrect." Annuities are expensive. Annuities are all bad. Annuities are bad because the annuity company keeps the money. All that's not true. All of it. You can't broad brush the industry.
It's like saying all restaurants are bad; some are. Some annuities aren't that good, and you shouldn't look at them. But when you're looking at annuities, they're contracts. You should buy them for the contractual guarantees of the policy, what they will do, not what they might do. So I just wanted to remind all you haters and hypocrites because I know that this topic attracted a lot of you, and a lot of you are still going to put comments down below, and that's fine, please do because we'll factually come back at you nicely and professionally and point out that you're wrong. But hopefully, people are starting to hear this, and they are by the droves because I got a call the other day, and this is great.
A person calls me and says, "Stan, I met with my advisor. They manage my stocks and bonds, and I asked them about annuities, and the person said, never buy an annuity." That advisor lost a lot of credibility because that's a dumb statement. That's similar to if I said, and I would never do this, "Never buy a stock, never buy a mutual fund, never buy a bond, never buy an ETF." If I said those things, I would lose credibility. That's garbage.
So, the reverse is true if someone says, "Never buy an annuity," and I love that they say the word annuity, and it encompasses everything, all types of annuities. "Never buy an annuity." Really? Hypocrite much?
Let me tell you something. Things are changing in the annuity industry. I'm personally changing it because of my videos, my books, and my website, that's talking about the facts of the contractual guarantees and the transfer of risk nature of these strategies that are good for people. That's going to be my legacy. But don't be an annuity hypocrite. I'm talking to not only the consumer out there that for whatever reason, when you go to the cocktail party, you start blabbering like that, "I'll never bond annuity." Shut up. You're making a fool out of yourself. For the advisors that are doing that, please be quiet. Please be quiet because you do not know what you're talking about. I mean, there are some big names out there that need to be quiet, and you know who I'm talking about. I've pointed a few out in some videos, very kindly, of course, and professionally, but if you don't know what you're talking about, don't talk about it. The thing is though, I'm Stan The Annuity Man; I do know what I'm talking about when it comes to annuities. I am not a hypocrite on other investments. Annuities aren't for everyone. But many people are benefiting from the contractual guarantees and the transfer of risk. So, with that being said, that's Shootin' It Straight With Stan. See you next time.
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