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How Much Do You Really Need to Retire?

Stan Haithcock
March 17, 2024
How Much Do You Really Need to Retire?

Hi there, Stan The Annuity Man, America's annuity agent, licensed in all 50 states wearing the Stan swag, the Stan sweatshirt, and the Stan hats. By the way, for all you people out there that are wanting the hat, first of all, that's cool that you'd wear the Stan The Annuity Man hat. We have run out, but I will let everyone know when we are back in stock.

‌Today's topic is how much do you need to retire? In this case, we're talking about money, but I will cover other things because that's what I do. I can free form this, but how much money do you need to retire? I'm going to tell you how to do that. It's very simple. I always say the only thing complex about the financial services business, and especially the annuity industry, the only thing complex are the agents and the advisors selling it and how they present it. Annuities are contracts; this is very, very simple. It's like Social Security, the other annuity you own. You have to decide when you turn on the income, right? Nod your head, and it will increase the best inflation annuity on the planet. But when we look at annuities, we're going to look at the contractual guarantees of the policies. How much do you need to retire? We will cover the money portion of that and other things right now.

‌All right, so how much do you need to retire? Now, before we get into annuities, let's talk about retirement. That's a tough word. In fact, that word really hasn't even been used except in America. It's like a retirement industry now, but my wife is always fearful, saying, "How's it actually going to work with you with retirement?" I don't know. I'm also scared for her because I'm on, if you notice, I drink a lot of coffee. I'm up; I'm ready to go, blah, blah, blah.


‌So, how much do you need for retirement? Let's talk about clothing. Because for me, I need hundreds and hundreds of T-shirts and hundreds and hundreds of Adidas suits and shoes and things like that. My wife's like, "No, no, no, please, no more," because it's creeping into other closets. But how much do you need for retirement? I think it's a broader picture than just money and a broader picture than income. I know you're saying, "Stan, you look vibrant. There's no way that you could be anywhere close to retirement." I don't plan on retiring. I plan on doing this as long as the camera's rolling, as they say, and I have a great team in place in my primary office in Las Vegas; we have multiple offices.

‌But what do you do with retirement? A lot of you are struggling with that. My wife and I, I don't think we're struggling, but we're communicating about it. How's that going to work? How's chapter two of our life going to work? But when it comes to retirement and money, it all comes around to what I call the income floor.

‌Income Floor

‌What is the income floor? Excellent question; I'm glad you asked. The income floor is the amount of money that hits your account every single month. We're not talking about markets and we're not talking about risk. We're talking about Social Security, dividend income, pensions, which is another annuity, if you're so fortunate to have a pension, interest off of CDs or MYGAs, the annuity industry version of a CD, and income that's hitting your bank account that politics don't affect. It's that income floor. That's where annuities come in because everybody has that budget for the income floor.


‌This leads me to another story, sidebar. My wife and I were talking about retirement and things like that. She goes, "It'd be nice for us to have a budget in retirement. We've never really had a budget." I don't know if you notice this, but I'm a little wild. I have ideas. I'm like, "Yeah, I understand that," and the income floor is all about budgets. What is the budget? What is the amount of money you need to live off of, including going out to eat, traveling, being on the cruise, and buying a new car? What is that amount? And is there a gap to fill in that amount that annuities can fill?


‌You might say, "Well, I don't want an annuity because when I die, the annuity company keeps some of the money." Well, that is very uninformed, and I'm sorry that someone's told you that. That's not true. We can structure contractually and shop all carriers for the highest contractual guarantee, a lifetime income for either you or your spouse, so if you die, the income will continue uninterrupted and unchanged for their life. But we can also structure it so that when they pass away, or if both of you pass away in a fiery Learjet crash, 100% of the money goes to the listed beneficiaries of the policy, and the evil annuity company doesn't keep a penny even though they're on the hook to pay.

‌Yes, you can have your cake and eat it too. I guess it's without the icing, but the cake is the lifetime income, and the eat-it-too is the annuity company doesn't keep a penny, even though they're on the hook to pay. Don't feel sorry for them because they know life expectancy; they know when you're going to die. That's the reason they have the big buildings, the logos on the plane, and they're sponsoring sports stadiums. They know when you're going to die. That's the reason life insurance companies are profitable, and property and casualty insurance companies are not, because they don't know when the hurricane is going to hit or when the fire is going to happen.

‌Get a Pencil Out

‌Looking at the income floor and retirement, how much do you need for retirement? This was the question; the reason you clicked was because you're thinking that. How much do you need? For non-budgeteers, you need to get the pencil out and communicate with your family, spouse, etc. What are we spending? How are we spending it? What do we need? What are potential increases in the future? Then what you can do is run reverse engineer quotes using my site, meaning that, "Hey, Stan, we need an additional $722 based upon my calculations because I'm an accountant and OCD and I know to the penny what it is, you can put in. How much would it take to create a lifetime income stream for me and the spouse starting in 30 days, a year, two years, five years," that 722, whatever you came up with, "What's the least amount of money it's going to take to create that contractually and it's going to hit my bank account every single month?" That's how I want you to think. It's all about the income floor.

‌Now, let me say one thing that will upset some advisors: I'm 6'6" and about 225, so bring it on. I'm kidding. I'm very calm. I'm a harmless fuzzball. But the point is, they're going to say, "Well, you don't have to buy an annuity. You can keep the money with me. I charge you a fee annually, and I put it in the market, and you can just peel off the gains. Just take 4% off." That is garbage crap-ola. That's nonsense because the first year there's a down market, that whole strategy goes out the window. Don't believe me? Believe the smart guy in the room. Wade Pfau, P-F-A-U, pull it up, he's been on my Fun With Annuities podcast. He has factually destroyed that and didn't play basketball at UCF. He went to Princeton. I played basketball at UCF. Princeton, basketball at UCF, listen to Wade, but I'm just echoing what he said. The 4% rule is dead.

‌If you're going to do retirement correctly, and how much do you need for retirement, and we're not talking about clothes now, we're talking about money, you need to reverse engineer that quote using annuities. I always ask people two questions. What do you want the money to contractually do? When do you want those contractual guarantees to start? That will determine the type of annuity we use to solve that contractual goal, and then we shop all carriers because it's a commodity product. Yes, I've made it simple. It should be that simple. We're the leaders in the industry because we make it simple. Eventually, everyone will do it like us because they're going to find out that clients will be happier because we're not selling the whistles and bells and the hypotheticals. We're selling the contractual guarantees.

‌The big question of the day. How much money do you need for retirement? It's pretty simple when you reverse-engineer quotes and use contractual guarantees to solve for that income floor. Got it? Good. My name is Stan The Annuity Man. I'll see you on the next 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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