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There’s No ROI Until You Die With Lifetime Income Annuities: Shootin’ It Straight With Stan

Stan Haithcock
May 29, 2024
There’s No ROI Until You Die With Lifetime Income Annuities: Shootin’ It Straight With Stan

Welcome to Shootin' It Straight With Stan. I am your host Stan The Annuity Man, America's annuity agent, licensed in all 50 states. Today's topic is: There’s No ROI Until You Die With Lifetime Income Annuities. It's a great little quippy rhyme: there's no ROI until you die. ROI is the return on investment. Now, for all you Wall Street types out there, and hopefully most of you are, because you've got to put your money somewhere, you can't put it all in annuities. You need growth. And a lot of the chatter is, what's my return on investment on that mutual fund or that stock or that ETF or Bitcoin or whatever you are buying non-annuity, what is that return on investment? I mean, it's a big question that everybody asks, but they carry that question over to the contractually guaranteed annuity side, which is a mistake.

The people always ask, "Well, what's the ROI on that lifetime income, Stan The Annuity Man?" I don't know that, Chester until you die. Until that point, you have transferred the risk to that life insurance company issuing the annuity to pay for as long as you are breathing. Let me give you an example. You probably said, "That'll make sense. Explain it." Here we go.

Let's say you bought a Single Premium Immediate Annuity, and the payment starts 30 days from now, and you live to be 150 years old. It could happen. You never know. You could stop smoking, stop drinking, stop carousing, stop being crazy out there and eating all the McDonald's, which is good, by the way. Eat the fillet of fish. I really like the fillet of fish. But let's say you cleaned it up, or there's a medical breakthrough out there, and you've lived forever, 150, 160, 170, whatever. That's a pretty good return on investment worth lifetime income.

Annuity Types

Now, the big point here is that you need to understand. With lifetime income, all types, and there are four primary annuity types, not just one type of annuity. Single Premium Immediate Annuities, Deferred Income Annuities, Qualified Longevity Annuity Contracts, and Income Riders attached to products like Index Annuities and Variable Annuities. Those four, Single Premium Immediate Annuities, Deferred Income Annuities, Qualified Longevity Annuity Contracts, and Income Riders, all provide lifetime income for as long as you're breathing. If you set it up, joint life for as long as one of you is breathing. You're transferring the risk.

Understand lifetime income with annuities, plural; those four types are a combination of return of principal plus interest. So, if any Yahoo agent advisor says, "I got the annuity that you're going to get a lifetime income stream, but in the end, the potential growths can all set..." Garbage, crapola, walk away, screaming and yelling with your hair on fire because it's nonsense. When you buy lifetime income, it's a combination of return of principal plus interest.

On the Hook

Now, if you're running the math out there and you say, "Wait a minute, Stan The Annuity Man, you've said in the past that lifetime income is primarily based on life expectancy or life expectancy is a joint, and interest rates play a secondary role, and it's a combination of return of principal plus interest. I'm drawing down, Stan," in the South, that means subtracting. "I'm subtracting from the total, and there is a possibility, Stan, that if we live or I live forever, there's going to be zero in the account." You're correct. You are correct, and that is the nature of the transfer risk. That's the true value proposition of a lifetime income stream with an annuity. Of those four types, it's really that simple. You could be at zero in your account, and the annuity company is contractually obligated and, on the hook, to pay for as long as you're breathing, even if you're on a ventilator. Call them ventilator annuities.

Let's say you went into a coma, and they kept you on a ventilator for seven years. Don't worry about it because you won't know if you are. You're still going to get paid. Why? Because you are breathing. It's that simple. I have thousands of clients who are at zero in their lifetime income account, whatever annuity type they bought, and the payments are still showing up, which leads us back to the title. There's no ROI until you die.

Now, if you're obsessive-compulsive and you just got to have that number, then project when you're going to die or plan when you're going to die. And as I've always said, death is not a good strategy because you can only use it once. Think about it. That's like a, "Hmm. What? Huh?" Yeah, that's actually true. So, when you're buying lifetime income, whatever, you always ask two questions.

What do you want the money to contractually do, and when do you want those contractual guarantees to start? If your first answer to the first question is, I want lifetime income, and I want to start now, two years from now, three years from now, seven years, whatever, then we at The Annuity Man, you can run your quotes yourself if you want to on our proprietary calculators, you could schedule a call, and we can put together a plan for you. But you have to go into that lifetime income stream as this is not an investment. This is a contract, a transfer of risk contract. I'm transferring the risk to solve for what they call in the upper ivory towers of the education system.

Longevity Risk

Let's talk about longevity risk. What's longevity risk? The fear of outliving your money. I strip everything down into southernisms because I'm from the South and draw down equals subtraction. Longevity risk means the fear of outliving your money, and you already own the best inflation annuity on the planet, which is Social Security. If you have a pension from your employer, you have a second annuity. The question is, how much more do you need of lifetime income guarantees to fill in that income floor?

But what I want you to do when you go to The Annuity Man and run quotes on our proprietary calculators, you'll love it 24/7, 365, and if you want to have a conversation that's not salesy where we use our ears and mouth and proportion, 2:1, then do that so we can put together a plan. Still, come to the table knowing that it's a transfer risk. Come to the table knowing that this is not an investment. This is a pension, whether you're starting it now or in the future, and understand it will pay until you're not breathing. But the key is understanding there's no ROI until you die.

That's pretty much it. Isn't that beautiful? That really should be a song, like a love song, kind of a country song with a bit of rock in there. I'm thinking about it. But hey, that's it. No ROI until you die with lifetime income annuities. My name is Stan The Annuity Man. I'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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