Making Yield Great Again: Shootin' It Straight with Stan®
The Red Hat of Annuities
We are all familiar with the red hat MAGA, Make America Great Again. We know all the baggage that comes with that. Some people are in it. Some people hate it. I don't care, I'm not political. I'm Stan, the Annuity Man®. But instead of MAGA, Making America Great Again. I have a new red hat. It's MYGA, Making Yield Great Again. I am here to tell the American people that yield can be great again. Yield is back. Yield is here. Yield can provide the comfort, security, interest, the income needed without touching the principle. It's MYGA, Making Yield Great Again. How's that for a catchy phrase?
But it's true. I know what people say all the time. They say, "Stan, I hate annuities. Annuities are all expensive. Why would I ever buy an annuity?" They're uninformed. It'd be like me talking about ballet or creative dance, which is not good. Because I don't know anything about it.
Making Yield Great Again. Right now, there are good contractual yields available. Short term two year, three year, four year, five year, seven-year. You can lock in very good rates. Go to my site at theannuityman.com and you'll see live rates. Pull it up, pull your state up, pull the duration and see for yourself. MYGA's come in all shapes and sizes, types, and durations. Some allow you to take the interest out. Some don't allow you to take the interest out, choose which one you want. If you want to just peel off interest and never touch the principle, you can do that. If you just want to lock and load and let it compound, you can do that. There are no annual fees. There are no market attachments. There are no moving parts. There are no upfront bonuses. There are no caps and spreads and participation rates and all that stuff. There's no garbage.
The Annuity Version of a CD
If you've ever purchased a CD before, this is the annuity industry's version of a CD. The life insurance company issues annuities, you give them the money and then they guarantee a specific interest rate for that period of time. They are Making Yield Great Again. And typically MYGAs, Multi-Year Guarantee Annuities, let's call them Fixed Rate Annuities as well, offer a higher contractual guarantee than CDs. Why Stan the annuity man? Good question. It's because life insurance companies that issue annuities have multiple pricing mechanisms to price off of. They're not just staring at Powell and yelling at the Fed. They glance at them.
Think of a five-legged stool that you sit on. One leg of that is chairman Powell and the Fed what they're doing. There are four other legs to that stool minimum. Let me tell you what those are. Life insurance products. Lifetime income products, that they sell. They have a legacy bond portfolio, fixed income portfolio that Jimmy Carter bonds, Barack Obama bonds, Bill Clinton bonds, George Bush bonds, whatever that are getting very good yields. They probably bought them non-callable institutional-type paper. And then the last leg of the stool that no one talks about is capacity. And capacity means that annuity companies get to a point where if they've raised enough money for a specific product or a specific tranche, then they will lower the guarantees in order to not attract money. Give you an example. The last time that chairman Powell raised rates by 75 basis points, in English as three-quarters of a percent, there were three companies that lowered their guarantees that same day and be like, "Wait a minute Stan, I thought that was linear. I watched CNBC. And they told me-" They don't know. The annuity industry, the life insurance companies, that issue annuities. They glance at the Fed. Yes. Does it drive it a little bit? A little bit, but not all.
Here's the other thing you have to think about. People say, "What do you think rates are going to ghost in? You always talk about Making Yield Great Again and wearing red hats and marching around like you're a politician and that you're leading the charge." I am leading the charge for contractual guarantees. "Where do you think rates are going to go, Stan the annuity man?" I don't know. And even if they go up, I don't know if the annuity companies are going to acquiesce and follow Pied Piper-ish behind and raise their guarantees. Why? They're at the point now with 10,000 to 11,000 Baby Boomers hitting age 65 every single day, money's flowing in. It's a demographic tidal wave of premium, that's money in annuity industry-speak, coming into the annuity industry, to the annuity companies. They don't have to raise rates to attract you. Now some do some don't and that's the reason I represent pretty much every single carrier out there so that if somebody breaks out and says, "Well, we're going to raise rates." Then we are going to be able to go get them and lock those in.
But it's not linear. Not all the time. Do we see companies raising rates? At this time we're coming up against an upcoming Fed, supposed raise. We'll see what happens. We've had two or three companies send us emails and say, "We're lowering our guarantees." That's a capacity issue. That means that money's flowing in so fast that they do not need to raise rates, to attract the guarantees. And remember with annuity companies, they're just not taking all the money in that you're going to give them. And you can't buy as many annuities as you want. There is a limit and what annuity companies do. And this is good in pro-consumer, is when they offer a product, there's a specific dollar amount that they're trying to hit. And once they hit it, they're going to lower the guarantees because they know that number. If that number comes in, they can back up those claims and those guarantees for that specific product type.
So, interest rates who knows what's going to happen, Making Yield Great Again? The annuity industry is Making Yield Great Again. The guarantees for MYGAs Multi-Year Guarantee Annuities, AKA Fixed Rate Annuities, AKA the annuity industry version of a CD are Making Yield Great Again. It's bringing back times of yore. Thinking back to the Jimmy Carter days, where you could put money in the CD and peel off all this interest. Now, yes, there were higher mortgage rates, et cetera. But everyone's wanting those days to come back. Will those days of those double-digit interest rates come back? Probably not. But right now you might have already won the game and you got to ask yourself, why are you still playing?
Never Touch the Principal
You might be able to put money in a Multi-Year Guarantee Annuity but never touch the principle. And peel off the interest for the income that you need. So, you get to the end of the duration. Let's say you bought a five-year. You peeled off the interest. You put a half, a million dollars in there. You peeled off the interest. At the end of five years, you got half a million dollars. Isn't that what we want for lifetime income? We're at a point now where if you come to me and say, "Stan, I'm thinking about an Immediate Annuity, Single Premium Immediate Annuity for lifetime income, or whatever you think is best." My question to you is to tell me your income need, tell me the gap that needs to be filled. And if we can fill it by buying a Multi-Year Guarantee Annuity and just peeling off the interest and never touching the principle, that's what we're going to do. We are at that point, the annuity industry is Making Yield Great Again.
I'm the leader of that. I am the spokesperson for Making Yield Great Again for the United States of America. I am the self-appointed leader of the annuity industry to Making Yield Great Again. Yes. I will be distributing MYGA hats. And I want you to wear the MYGA hats to the MAGA things and say, "No, no, no. It's not about MAGA it's about MYGA. It's not about Making America Great Again. It's about Making Yield Great Again." I love that. Isn't that great? Aren't you motivated? Aren't you motivated to lock in guaranteed interest rate? Not hypothetical, theoretical, projected, back-tested, unicorn chasing the butterflies, crap numbers. I'm talking about contractually guaranteed yield. Hand over the heart because I'm being patriotic. Because the annuity industry is Making Yield Great Again.
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.