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Planning Lifetime Income for Your Spouse: Shootin' It Straight With Stan

Stan Haithcock
December 13, 2023
Planning Lifetime Income for Your Spouse: Shootin' It Straight With Stan

Welcome to Shooting It Straight With Stan. I'm your host Stan The Annuity Man, America's annuity agent, licensed in all 50 states, including the one that you're sitting in, which is a beautiful state, may I add, as I look over your shoulder into the backyard. It's beautiful. It's just totally beautiful.

‌Today's topic is planning lifetime income for your spouse. This is a big one, so planning lifetime income, using annuities, and doing that for your spouse. Now, the lovely Christine, you've heard of her before. She's been married to The Annuity Man for over 35 years. She met me in college, was enamored with me if you can only imagine that, and she has put up with me and my shenanigans and just who I am, which is a handful for all these years, and I've been in the financial business the whole time we've been married. Dean Witter, Paine Webber, UBS, Morgan & Stanley, and then the infamous Annuity Man. As I left UBS, I'm going, "I'm going to go be Stan The Annuity Man." She did a Scooby-Doo. I'm like, "Yeah, yeah, it's going to work." She's like, "Huh?"

‌Anyway, she has no interest in finances. She has absolutely no interest in stocks, bonds, annuities, math around finance, etc. She is very smart, with a master's degree. By the way, just keeping score. She has a master's degree in clinical psychology. I really believe that I am a long-term project of hers, of which she's writing a book that she's not telling me about. It'll be a bestseller, and she'll cut me out of the royalties, but I digress. But because she's put up with me, I'm planning lifetime income for her when I die, and there's a lot of you out there that are in the same conundrum, and I get these calls a lot. "Stan, I need to set something up for the spouse." And there's a lot of females out there not to be sexist because I'm not. A lot of females run the finances, and they're trying to set something up for their husband, who doesn't care, and all he does is play guitar and work on the Corvette.

‌When My Learjet Hits the Mountain

‌So, regardless of the situation that you're in, if you have a spouse who's not interested in finances, there are a couple of ways to go about setting up lifetime income for them. Here's the best way, and you won't believe this, but it doesn't involve selling annuities right now. The sales gods are like, "What? What are you doing, Stan?" Here's how you do it. Here's how I've done it for the lovely Christine.

When I die, when my Learjet hits the mountain. There is a trust set up and within that trust, something in there reads something like this. When Stan dies, and after everyone cries and they sing the song, and Nine Inch Nails plays the funeral, it's a band. Look it up. And they play the funeral. There will be an Immediate Annuity purchase for the lovely Christine for life and a cash refund. So, my daughters will get the cash refund, but it'll be set up for her to get a lifetime income stream. Now, what I've done in the trust is I've laid out, here's a lump sum to use, or here's the projected income that she's going to need on a monthly basis.

‌Run the quotes, quote all carriers, line it up, and buy it for her. So, I'm not throwing darts at the lifetime income. In other words, a lot of people go; what can I buy right now for Margaret so that she gets a lifetime income when I die? And I'm like, "Hey, Fred, when are you going to die?" "Well, I don't know that Stan, but I want to buy it now so when I die, she has it." I'm like, well, you haven't told me when you're going to die. And by the way, for the record, death is not a good strategy. You can only use it once. I need you to think about that. As Bill Black says, the life insurance guru I have on my Fun with Annuities podcast, "Hey, Stan, one out of one of us is going to die." I'm like, "Thanks, Zig Ziglar, Mr. Motivation, but it's true."

‌Lovingly Handcuffing Beneficiaries

‌So that's what I've done for my wife. I've also done similar things for my kids when I lovingly handcuff them. It's called lovingly handcuffing your beneficiaries doing the same thing. When I die, an Immediate Annuity is to be purchased for them to pay for their life, so they don't get the lump sum and buy the Lamborghini with cash, but with the spouse, that's what you do. Yes, you can buy a Deferred Income Annuity and defer it out. Yes, you can buy a QLAC and defer it out. Yes, you can buy and set it up joint life. Yes, you can buy an Income Rider, defer it out, and set it up joint life. That's called throwing darts at death, and that's okay. You might say, I know for a fact, Stan, that I'm not going to live to age 85. I'm going to push the queue to age 85, and she can change the start date if she wants to, but I'm going to put her on here for lifetime income.

‌Great, you can do that. And QLACs are a great way to use your IRA and attach your spouse for joint lifetime income. They deserve it. Yes, it's going to be a lower payment because it's on two people, not one, but they put up with you for all these years. Take your IRA money, put $200,000 of it in a QLAC for lifetime income for both lives and put your spouse on there. QLACs, that's an easy way to do it and lessen your RMDs, but I really like the trust part of it. Yes, you'll have to see a lawyer, a trust lawyer. I like trust lawyers because they're actually trying to help. They really are trying to help, and the trust should be revisited every single year, but my wife knows that when I die, there's a huge life insurance policy. If I die unexpectedly, kind of look into it, if you know what I mean.

‌Client Example

‌So, there's a huge life insurance lump sum coming. The trust, the trustee executor of the trust, can choose to use that lump sum or whatever lump sum to buy that Immediate Annuity for my wife at the time of my death. Now, why is that important? Why is that something I want you to think about? A guy called the other day, and we're having this conversation, and we got to this point. I said, "Why don't you just set up a trust and do what I just said and what I just explained?" And then I said, "As long as you're alive and hitting on all cylinders, Fred, is everything okay from an income standpoint?" He's like, "Oh, absolutely. I'm on it. I got it. No problem. She knows that."

‌Great. Then, let's plan for your death. Let's plan for what happens on your death. The only caveat to that is a lot of people like to plan something for their spouse in case they have cognitive decline. Problem with cognitive decline: when you get it, you might not know you have it because you have cognitive decline. So, those are discussions that we have, but you should plan for your spouse and plan for them to have lifetime income and plan for whatever income that's coming in now while you're alive if there's something like a pension or something that's going to be reduced upon your death. We should start planning upon your death to replace that gap for your spouse, and you can do that. That can be done at the time of your death.

‌They've Earned It

‌It can be triggered by your death. Or we could throw some calculated darts, contractual darts. I guess I should do a video called Throw Contractual Darts at Lifetime Income. But that's what we're doing. You're saying, "Hey, I needed to start this income stream to start at age 75 joint life and this one at 80 joint life and this one at joint life." Or you might buy a Deferred Income Annuity or an Income Rider just in your spouse's name, knowing that they're going to outlive you just so that they have a lifetime income stream.

There's a myriad of ways to do it, but for all of you A personalities out there, this is a tough one because you've been managing money, you've been buying stocks and bonds and mutual funds and ETFs and crypto and Tesla and Apple and all these great things, and you made lots of money, more money than we could ever dream of making in the market. You're here, and you look around, and you go, "I don't think my spouse cares." They don't. They want to see the kids and the grandkids. That's my wife. She wants to see the daughters and the grandkids. That's all she cares about, along with the grand dog. I mean, that's what she wants to do, and I will set her up so that she can do that. She's earned that. Your spouse has earned that, and it's time for you to start thinking like that.

‌How do we set up that lifetime income stream for them? So, when I pass, my wife knows exactly what's in place, whether it's her life only or joint life only, that she can trigger income on some dart-throwing products that we purchase. Still, she also knows that the trust will kick in, and there'll be an Immediate Annuity purchase for them at that time. Certainly, we would love to be that source for you, but the only thing I'll say is to shop all carriers for the highest contractual guarantee. Don't have some person go, "This is the best one." No. Listen, when you buy annuities like you're supposed to just for the contractual guarantees, as I say, you own an annuity for what it will do, not what it might do. You strip it down to the commoditized contractual guarantees when you do that. Then, you can shop all carriers for the highest contractual guarantee, and you're not beholden to somebody's sales pitch or one company.

‌So, there's a myriad of ways to plan lifetime income for a spouse. I just gave you a few, but it's a discussion that we need to have. Go to my site and schedule a call to discuss the details of your specific situation. Let's take care of them. They have put up with us. Nod your head. They have, and if they're anything like my wife, they could care less about markets. They could care less about volatility indexes or annuities, or they don't care. They don't care. They just want to live a good life, which they deserve, and they want to see family and make sure that money's hitting that bank account, so they don't have to worry. And it's up to us to put those contractual guarantees in place so they won't worry. And that's a legacy that both you and me are going to do, and I hope I can help you with that. My name is Stan The Annuity Man. That's Shooting It Straight With Stan. We'll see you next time.

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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