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How Annuities Are the Best Offense for Diminished Capacity Retirement Planning

Stan Haithcock
January 5, 2023
How Annuities Are the Best Offense for Diminished Capacity Retirement Planning

Today's topic is a good one and a sensitive one. How annuities are the best offense, the best strategy against diminished capacity as you're doing retirement planning. What's diminished capacity? When you're not firing all cylinders, you forget things. Things happen. Let's look at it from more of a planning standpoint. If we know that's going to happen, how do annuities help that and help smooth that out for you, your family, and your loved ones? We're going to talk about this difficult topic which you need to listen to because this is reality, and it's going to happen to every single one of us. One out of one of us will have diminished capacity if we live long enough.

I know what you're saying. You're saying, "Stan, wait a minute. Wait a minute, player. I'm a master of the universe. I trade in stocks and ETF and crypto and all that stuff. I know what I'm doing. I'm locked in. Bang, I can do it." Yeah, like the old athlete that tries to play in the pros when they can't play because they have diminished capacity and athleticism. All of us will reach that stage or start realizing that we're not as good with names or forgetting some things. That's just life. That's life and death, but that's life because that happens to all of us. For all you masters of the universe out there, the Gordon Gekkos of the world, the future Elon Musks of the world, and you don't need annuities. "Stan, I don't need an annuity as long as I'm hitting on all cylinders." I'm trying to tell you that you're not always hitting on all cylinders.

Annuities Are Contracts

Annuities are contracts, and if you're setting them up for Lifetime Income, Guaranteed Lifetime Income, as long as you're breathing, the annuity company's going to pay you whether you can remember the payments are coming in or not. Why is that important? It's important, especially for all of you masters of the universe, male and female, that your spouse could care less about markets, volatility, indexes, crypto, etc. They don't care. They just want to see the kids and the grandkids. They want to live that life. They want to travel. They want to enjoy the spoils. They worked hard and put up with your rear end all this time. They want to live that life. A lot of the annuity strategies, like income flooring, is the income that's coming into your bank account every month, regardless of who's in office and who's running Congress and the House and the Senate. Who cares? It's money that's coming in.

Yes, you already own one called Social Security, the best inflation annuity on the planet. Don't believe that in 2022? Check the increase, player. It's going to be there. But it's also money hitting your bank. Dividend income or Annuity Lifetime Income will hit your bank account every month as long as you breathe. You can structure that so that 100% of unused money goes to your list of beneficiaries, not the evil annuity company.

Diminished Capacity

Getting back to the diminished capacity part is very important as you get older to have that guaranteed turnkey income stream hitting that bank account every month. If you're married or with a spouse, as long as you live and as long as they live, and if you die, the money continues uninterrupted and unchanged for the rest of your life. I recently did a podcast called Fun with Annuities which comes out every Tuesday. You can also check it out on all major podcast platforms. We even have a YouTube channel FUN WITH ANNUITIES - The Annuity Man® Podcast for it so that you can see my face and the guest's face on it. I had a great guest named Steve Parrish. Steve was talking about retirement phases, and he's come up with three that I want you to think about because it's easy to remember, makes sense, and applies to every single one of us.

Go Go, Slow Go, No Go

Go-Go, it's number one. Number two is Slow-Go, and number three is No-Go. Go-Go, Slow-Go, No-go. Let's go over them. Go-Go is where you're at right now. "I'm a master of the universe, Stan. I'm firing all cylinders. My IQ is ripping. I've forgotten more than anyone ever will know. That's who I am. I don't need this turnkey stuff." That's Go-Go. You might not need an annuity. But what happens? Now you're going to transition into Slow-Go eventually. You got an eight-cylinder car, but only four cylinders are hitting. You're not as good as you once were. Physically you're breaking down because aren't we all? But mentally, you're not firing on all cylinders. That's just it, man. That's life. You got to come to those realizations, and maybe at that point where you're either planning for Slow-Go, or you're in Slow-Go, you need to start putting in that Lifetime Income stream floor guarantee. Or if it's Principal Protection, you want to buy a Multi-Year Guarantee Annuity or Index Annuity for Principal Protection, then great. That's part of that Slow-Go part of your life, that retirement phase that Steve Parrish talks about. You can re-listen to Steve Parrish's phases of retirement Steve Parrish: Decoding Annuities in the Consumer's Mind and listen to him explain better than I'm doing. So now you know what the Slow-Go is. You're phasing in these guarantees. The Go-Go, you're saying, "I'd never put a guarantee in. I don't need a guarantee." Slow-Go's like, "I kind of need some guarantees." No-Go is the place where the Michael Jordans of the world eventually are using the cane to walk. They can't jump like they used to. You can't do what you used to. You're not as mobile as you used to be, and it's not that you know where the end is, but you can see the finish line. That's No- Go. No-Go means that you probably need those Contractual Guarantees.

What Does It Solve?

Remember, annuities are contractually guaranteed transfers of risk products that primarily solve four things. The acronym that I've come up with is PILL. P stands for Principal Protection. I stands for Income for Life. L stands for Legacy, and the other L stands for Long-Term Care/Confinement Care. PILL. Principal Protection, Income for Life, Legacy, Long-Term Care/Confinement Care. When you get to the Slow-Go stage, you're starting to think about it. When you get to the No-Go stage, you got to be there, and you got to have those products and strategies in place, transferring the risk to solve for those items.

In many cases, we live in a pension-less world where less than 9% of private companies even offer pensions. It's actually down to 7%, and if you don't work for the government, you're not going to get a pension, so annuities are the only product on the planet that can provide a Lifetime Income stream regardless of your mental capacity. Guaranteed issue. You want to avoid getting to the point where someone has to buy your Immediate Annuity as a durable power of attorney because you can't get it. You can't figure it out. Be proactive. You've been proactive your whole life. You've planned, you've saved, you've scrimped, you've invested, you've gone through market ups, market downs, you've seen it all. You know what's going to happen in the future. You know it. You should take some of those profits off the table and plan for that Slow-Go and No-Go years as you're coming from that Go-Go place you are right now.

What's interesting about this is that there's little research on this topic. Steve Parrish is a groundbreaker on this, and he's onto something. He really is. Remember, annuities are transfer of risk products. At some point in time, you don't want to shoulder all the risk. You want to transfer all the risk, but you might only want to do that some at a time. You might want to do it over time. Transfer the risk. Just put that in the back of your mind.

The Hard Truth

I know this is a very hard topic to talk about and for you A personalities out there, it's hard to have that discussion with your family, friends, lawyers, and everybody to put all of these guarantees and what you want to happen in place. You want to have those conversations proactively. You want to have those conversations when you're firing on all cylinders. You want to have everything set up when you start diminishing. You want to avoid being at the point where it's diminishing and don't know that you're diminishing, and it's too late to set it up. Be proactive just like you have with everything in your life. Most of you out there started with nothing, and you've built this thing that is so great for your family. You've built up this money, assets, and net worth that you can't believe. I can't believe it sometimes. I came from rural North Carolina. I'm like, "Really? I'm here." Yes, you're here as well, but it's time for you to be proactive about what will happen in the future. I hope that you live to 115. I hope you're the medical miracle out there, but maybe you're not. Think about it and set an appointment with me Stan The Annuity Man® | Brutally Honest Facts About Annuities to discuss how we strategize putting those guarantees in place, not only to take care of you as you diminish over time but also to take care of your family. This is tough for us, but we need to do this. Are we all going to have diminished capacity? Yes. One out of one of us. Let's do it as we've done with everything else. Let's attack it. Let's plan for it. Let's put things in place that will take care of you and your family.

Never forget to live in the 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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