Table of Contents

Retirement Lifestyle: 3 Tips to Financially Care for Your Loved Ones

Stan Haithcock
May 16, 2024
Retirement Lifestyle: 3 Tips to Financially Care for Your Loved Ones

So, we all want to take care of our loved ones financially. That's a goal. I'm Stan The Annuity Man, America's annuity agent, licensed in all 50 states. What I'm doing is kind of answering the questions of how do I do this? How do I take care of my loved ones financially? Now, there's a myriad of ways to do that. One of the best ways, and I don't sell this product, is life insurance, the best wealth transfer to your beneficiaries. I have a ton on myself, but I don't sell it. So, that's the best one. But we will talk about annuities because they have their place when caring for your loved ones, and we will talk about that now.

Ways to Care

All right, so talking about life insurance. It's a great product. The downside is you have to qualify for it, be underwritten for it, and get medical tests and all that stuff. But if you can pass that, I guess there's some guaranteed issue stuff as well. But for the high death benefit, you must undergo an underwriting process. But with annuities, you don't have to do that. They're guaranteed issues. So, let's talk about a couple of ways to take care of your loved ones using annuities.

One of the ways that I like using them with my clients is that annuities were put on the planet during Roman times as a lifetime income stream gift to the dutiful Roman soldiers and their families. Annuities have a monopoly on lifetime income and have been sold in this country for hundreds of years for just that. It's a transfer of risk that you can never outlive the income stream. Annuities are the only product that can do that. Now, in saying that, you can also take care of your loved ones with that contractual guarantee. Let me explain a couple of scenarios and examples.


Number one, if you said, you know what? I want to leave a legacy of income, and you can buy what's called a period certain. In other words, Stan, I want income for 30 years, or I want income for 35 years, or I want income for 20 years. So, after that time period, money goes poof, and it's gone, but you're not going to lose a penny. It's going to be paid out to somebody. But for a lot of my clients who are late in their years, they want to provide an income stream to their family because the joke I always tell people that your kids are going to show up to your funeral in a Ferrari anyway, so why not just have them making payments on it?

With annuities, you can structure it so that the guaranteed income stream goes to the list of beneficiaries. And by the way, you can list as many beneficiaries on the policy as possible with most carriers. We can certainly help you with that if you buy an annuity from us at The Annuity Man, because we're licensed in all 50 states, and I'm the top agent out here. But I'd love to talk with you about structuring a lifetime income stream to take care of your family.

It doesn't have to be a period certain. You could say, Stan, I want it for my lifetime with a 30-year certain. What does that mean? It will pay for your life regardless of how long you live, but if you die in year five, there are 25 more years of payments, or if you die in year 11, there are 19 more years of payments. So, there are at least 30 years of payments going to somebody. But if you live forever, it's still going to pay you. To understand this, lifetime income streams or period certain income streams or any type of income stream is a customizable strategy that you and I need to talk about. Just schedule a call with me at The Annuity Man.

Annuities are contractual guarantees; they're commodity products. They should be shopped with all carriers to find the highest contractual guarantee for your specific situation. But when you're taking care of your loved ones, think income stream. It's not a bad play.

Lifetime Income Streams

So, talking about lifetime income streams, you can use Single Premium, Immediate Annuities, and Deferred Income Annuities, which are pretty much the same product, just the difference is the starting date. With Immediate Annuities, you can start the income as soon as 30 days from the policy being issued up to a year. With Deferred Income Annuities, that income can start as soon as 13 months and out to at least 30 or 40 years. We can structure and customize it the way you want it to work. So, Single Premium Immediate Annuities, Deferred Income Annuities are the same product. No moving parts, no annual fees. It's just easy to understand. A nine-year-old can understand, no offense, nine-year-olds.


Another product that works from the standpoint of taking care of your loved ones is a new product, the newest annuity type called a Qualified Longevity Annuity Contract. Now, you're saying to yourself, what the heck is that? Well, in 2014, the IRS and the Department of the Treasury developed this product so that people could take their traditional IRAs and some employer plans, but most people using QLACs today are using their traditional IRAs to set up a guaranteed lifetime income stream. But here's the catch, and here's the good news. You can take your personal IRA, and you can attach a lifetime income benefit for not only you but you and your spouse or partner. You can take your traditional IRA and add them as a lifetime income benefit guarantee, which is really good. It's a way for you to take those assets and then have your spouse or partner attached to them as a pension-type income, as another Social Security type payment.

To me, for people who hate annuities, never would buy an annuity, never would consider an annuity, or hate annuities, you need to look at a QLAC because I'll guarantee you that your spouse doesn't like the stock market as much as you like it or doesn't want to put the money at risk like you want to. In most cases, and I know with my wife, whom I've been married to for 32 years, she could care less about investments. All she cares about are kids and hopeful grandkids down the road. That's all she cares about. She just wants money hitting the account. So, Qualified Longevity Annuity Contracts work in conjunction with Immediate Annuities and Deferred Income Annuities. And by the way, a QLAC, just for definition purposes, is a Deferred Income Annuity. It can only be used in your traditional IRA or employer-sponsored plan. Hopefully, they'll start putting QLACs in those plans more. But for now, if you have a traditional IRA and want to take care of that spouse or partner, you can add them as a joint lifetime income benefit recipient, which is good.

Death Benefit

Okay, the last way to take care of your loved ones using annuities is using an annuity as a death benefit. Now, once again, life insurance is the best death benefit strategy on the planet if you can qualify for it. But if you're one of those people who does have some health issues and you can't qualify for that, remember annuity companies, life insurance companies, love, love, love, love to insure young, healthy people. But for the rest of us who may have health issues, you can buy an annuity with an attached death benefit rider. In other words, if you draw a line down the middle of a page, two separate calculations, the annuity accumulation value here on the left, you can attach a death benefit rider. Currently, there are less than 20 of these death benefit riders out there, but we'll shop them all for you to find the best one for your specific situation. But in essence, it will grow by a specific percentage that you can leave to your heirs.


Now, unlike life insurance, it's not tax-free. I know you're saying, wait a minute, Stan, annuities are issued by life insurance companies. I understand that. There's a little bit of confusion there, but with annuities, that death benefit is taxable to your beneficiaries. But you know what? You're dead. And the other thing, too, is if you can't qualify for life insurance, you really don't have any other choice. And I like those death benefits attached to annuities because they're guaranteed issue. You don't have to go through any medical testing or nurses coming into your house; it's a guaranteed issue. Once again, the downside is that death benefit is taxable, but in many situations with these death benefit riders, your beneficiaries have the choice to take it lump sum, or they can take it over a five-year period to lessen that tax hit.

With all these quotes, remember that annuities are like a gallon of milk. The quotes are like a gallon of milk. And what do I mean by that? When you get an annuity quote from us or use our proprietary annuity calculators at The Annuity Man, understand that quotes will change every seven to 10 days. That doesn't mean you have to buy one or should be pressured into buying one. But understand that in those seven to 10 days, you have to decide and have the application processed by the carrier to lock in that rate. That doesn't mean you have to do that, but if, for instance, our conversation, we have one-on-one, if it's a two to three-week conversation, that means I'm going to be re-quoting those numbers for you every seven to 10 days. Just understand that annuities are commodity products, and we will quote all carriers for the highest contractual guarantee for your specific situation.

Thank you for joining me today. I'm trying to educate everyone out there to make a good, informed decision, and I encourage you to go to The Annuity Man and set a time to speak with my team. 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.

Learn More