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How I Really Feel About Variable Annuities

Stan Haithcock
March 14, 2024
How I Really Feel About Variable Annuities

Hi, there. Stan The Annuity Man, America's annuity agent, licensed in all 50 states. Arguably the top agent on the planet. People always say to me, "Hey, Stan, do you wear anything that doesn't have your logo on it?" The answer is no, except underwear, but that's another story. But we're talking about how I feel about Variable Annuities, which comes down to one thing. The Will do. What does that mean, Stan The Annuity Man? It means you own an annuity for what it will do, not what it might do. That's the reason that I only sell Fixed Annuities. I do not sell Variable Annuities, but that doesn't make them a bad product. I will tell you the details about Variable Annuities so you can make an informed decision about them.

Is a Variable or Fixed Annuity better? You're going to find out how I feel about Variable Annuities. Stan The Annuity Man, America's annuity agent. I have to weigh in on Variable Annuities even though I don't sell them. In this blog, I'm going to give you the keys to Variable Annuities and what you should look for so you can make an informed decision on your terms and your timeframe.

‌Brief History

‌When did Variable Annuities start? When did they land on the planet? When did those alien products hit the United States of America? It was in the fifties. I believe it was 1955, but don't hold me to that, you Variable Annuity police out there, by TIAA. A long time ago. And why were they put on the planet? For tax-deferred growth in a non-IRA account. That's still the benefit proposition of a Variable Annuity. But back in 1955, that's when they first were introduced, and they've been around ever since. That's your history lesson, the annuity history lesson for today.

With Variable Annuities, you can break it down to one statement. Using a Variable Annuity in a non-IRA account is really to have tax-deferred growth using mutual funds. Now, for some reason, the annuity companies call mutual funds separate accounts. Don't ask me why, because I don't know. Let me and you call them mutual funds because, in essence, that's what they are. So, in a non-IRA setting, Variable Annuities are fantastic for tax-deferred market growth.

‌High Fees

‌If you put the word fees right above my head, that would mean they're high fees because I'm six foot six, but I digress. High fees with Variable Annuities is one of the biggest complaints I hear, but that does not make them bad. Yes, Variable Annuities have the highest built-in contractual fees of all annuity types, and there's a reason for that. There are benefits attached to that. You can attach riders, etc. There are fees on the mutual funds, i.e., separate accounts.

But also understand that there's such an animal out there called a no-load Variable Annuity, and some of those have no fees. Some of them have teeny tiny fees on the separate accounts, but the bottom line is there are no surrender charges, etc. Don't let the one-sentence mantra you hear from people, "Well, I wouldn't buy a Variable Annuity because of the high fees." That's crazy. You always have to look at the contractual guarantees. What's the benefit proposition? Shop all carriers, both Fixed and Variable, for the best contractual guarantee for your situation. But yes, a Variable Annuity does have high fees.

‌No-Load Variable Annuities

‌So if you said, Stan The Annuity Man, America's annuity agent licensed in all 50 states, everybody loves me. Why? Because I tell the truth about annuities. What is the type of Variable Annuity that Stan The Annuity Man likes? There are no-load Variable Annuities. Why is that important? Because agents don't sell them. There's a hundred percent liquidity on day one. You still have the mutual fund growth inside; remember, they're called separate accounts, but mutual fund growth inside the variable annuity in any non-IRA setting is tax-deferred growth, which is a good thing.

Now, there are good no-load variable annuities out there. I think you need to look for the ones with a lot of mutual funds and separate account type choices. That's where you need to head because one of the bad things about the no loads that I see out is that many of them have limitations on the choices. So go out there and shop for the no-load Variable Annuity if you want tax-deferred market growth with many options. That's Stan The Annuity Man's take.

Disclaimer, alert. It's like a duck call but for disclaimers. The disclaimer is that I don't sell Variable Amenities. I only sell Fixed Annuities. So, remember that, yes, I'm writing a blog on Variable Annuities, but I'm letting you know the brutal truth about them. But Stan The Annuity Man, America's annuity agent, only sells Fixed Annuities.

"Why are you talking about Variable Annuities, Stan The Annuity Man? You don't sell variable annuities." No, I do not. And I don't give advice on the internal mutual funds and separate accounts. But the reason I'm talking to you about them today is that I do understand them. Back in my previous life, when I worked for Dean Witter, Morgan Stanley, UBS, Paine Webber, and all those really high-falutin places on Wall Street, I sold Variable Annuities. So, I understand how they work: the good, the bad, the benefits, and the limitations.

Now, when I decided to become the mythic superhero Stan The Annuity Man a long time ago, which is good for the country, I'm America's annuity agent; I decided at that time I was only going to sell contractual guarantees. The will do, not the might do, and Variable Annuities are might do products. I'm not saying they're bad, but that's what I do. I only sell contractual guarantees. I can't when you say, "Hey, Stan, look at my Variable Annuity." I can't do that. I don't have those licenses to do that. I don't want those licenses to do that because I fully cover the Fixed Annuity planet. But you can always give me a call and say, "Hey Stan, can I get a higher contractual guarantee?" I'll run that comparison for you; maybe that's the conversation you and I should have.

Hey, for all you angry Variable Annuity sellers out there that you're mad that Stan The Annuity Man, who only sells Fixed Annuities, is making a blog for the world to see about Variable Annuities. I got four words for you. This is my opinion. That's it.

All right, so we covered Variable Annuities. I encourage you to visit The Annuity Man, where you can do three important things. Get my books, use our proprietary annuity calculators, and you can schedule a call with me, Stan The Annuity Man, America's annuity agent. I will listen to what you have to say, answer all your questions, and, if suitable and appropriate, create a customized plan for you. I'll see you on the following Stan The Annuity Man blog.

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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