It’s OK to Hate Annuities but Love Social Security

Today’s topic is a fun one that might surprise you. It’s OK to hate Annuities, but you have to love your Social Security. And you’re probably thinking, wait a minute, Stan, haven’t you said that Social Security is the best inflation annuity on the planet? Yes, it is. But it’s still OK to hate annuities.

You’re probably thinking, wait another minute, you’re Stan The Annuity Man, you don’t even have a last name. Your last name is The Annuity Man, which is a whole other story. I tried to convince my wife early on to change our family name to The Annuity Man. That didn’t go over well. We’re still married, thirty-seven years strong, but yeah, that was a funny conversation.

So, why is it OK to hate annuities?

The Reason People Hate Annuities

It’s simple. most annuities are sold horrendously. They’re sold as the best thing ever. The best pie, the too-good-to-be-true deal, the product that has an upfront bonus, market upside with no downside, and all that garbage. They’re sold horribly.

Social Security isn’t sold. You earned it. Nod your head. It’s an Annuity. You get it for life, as long as you’re breathing, you’re going to get paid. And it has an inflation component built in.

There is no commercial Annuity that can truly address inflation. And if there are agents out there yelling, “I’ve got one,” no, you don’t. Because if it existed, I’d know about it.

Anytime there’s a potential increase in income from commercial Annuities due to inflation, the company adjusts the numbers. Picture this: here’s the income without the increase, and here’s the income with it. The Annuity company isn’t a philanthropist. They make up for it by severely lowering your initial payment.

So yes, you can love your Social Security, but it’s OK to hate annuities and how they’ve been sold.

The Real Truth About Annuities

If you really dig into that hate part, you’ll find out that annuities are commodity products.

What do I mean by that? It means you shop all carriers for the highest contractual guarantee. You own annuities for what they will do, not what they might do. You do not fall for hypothetical, theoretical, unicorn-chasing sales pitches from the “Johnny Appleseed” agents who promise bonuses and pie-in-the-sky returns. You shop carriers for the highest contractual guarantee.

At The Annuity Man, hundreds of thousands of quotes are run every month. We’re probably approaching a million by now. You can run quotes to your heart’s content and see the best contractual guarantees for your specific situation.

Annuities for lifetime income can be customized. We also have a live feed of the best fixed-rate, CD-type Multi-Year Guarantee Annuities (MYGAs).

It’s a commoditized world.

The Best Annuity on the Planet

People always ask me, “Stan, what’s the best Annuity on the planet?” That’s an easy one. The best Annuity on the planet is Social Security. That’s the one you love right now.

And I laugh when people call me and say, “I hate all Annuities, but man, I really love Social Security.” OK, hypocrite, much? Seriously.

Everything we do at The Annuity Man is built around those contractual guarantees. You go to our site, run the quotes, check the live MYGA feed, and educate yourself. Everything is informational.

When you talk to someone on my team, they’re all licensed, they’re all salaried, and they’ll tell you the truth. They’ll tell you if what you’re looking at makes sense, or if it doesn’t.

If a carrier has a high rating but isn’t performing well administratively for our clients, we won’t recommend them. We have a proprietary scorecard system that we update regularly.

If an insurance company starts slipping, one of our team members calls them directly and says, “You need to fix this, or The Annuity Man will stop recommending you.” And believe me, they listen.

That’s how we protect our clients.

Why the Hate Exists

It’s OK to dislike annuities because they’ve been sold so poorly for so long. It’s also OK to dislike certain types of annuities because some are just bad products.

There are some types we simply won’t sell. I won’t name them here, but they’re too complicated, and the rules can change after you buy them. That makes no sense.

If you can’t explain an annuity to a nine-year-old, don’t buy it. No offense to nine-year-olds, but if you can’t describe it simply and clearly, it’s too complex.

Unfortunately, most of the hate comes from those high-commission products that have been oversold with hype.

The solution is simple. Take away the sales nonsense and focus on the contractual guarantees.

What to Focus On Instead

Look at annuities only for their guarantees. Forget the hypothetical illustrations and the “what if” charts. Annuities should be evaluated the same way you’d evaluate a CD—based on the guarantee.

If you focus only on what’s contractual, you’ll see how they can solve four key problems: Principal Protection, Income for Life, Legacy, and Long-Term Care. If you need to solve for one or more of those, we can help. If you don’t, that’s fine too. Either way, the process should be simple and straightforward.

The Bottom Line

It’s OK to hate annuities and how they’ve been sold. It’s also OK to dislike certain Annuities that don’t make sense. But you have to love Social Security, because it’s the best inflation Annuity you’ll ever own.

If you take away the hype and focus on guarantees, you’ll see that annuities can serve a purpose one based on math, not emotion.

My name is Stan The Annuity Man. See you next time.