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Volatile or Contractual: Shootin' It Straight With Stan®

Stan Haithcock
November 23, 2022
Volatile or Contractual: Shootin' It Straight With Stan®

Today's topic is, and it's a good question, is your retirement plan volatile or contractual? Are you at the whim of the markets, at the whim of wars and dictators and crazy people and missile launches and Bitcoin fraud? Are you volatile, or are you contractual? And I guess the better question is, which one do you want to be? Which one would you prefer to be going into chapter two of your life? It's a big question. And recently, I've just been pounding the drum on calling into question the comment, "Well, you have to be in the markets. You have to have exposure. You have to have market exposure." Who says? Do you have to go to college? No. The majority of multi-millionaires and billionaires never went to college. That's a fact.

To Risk or Not to Risk

So to say that you have to be in the markets, you have to deal with volatility, you have to see risk, you have to deal with markets going up and down, you have to see your account values fluctuate downward, really occasionally? Do you? I don't think so. At the time of this taping, look at the date; we’re at a place with the contractual guarantees available that I don't think you have to do that. I just did a video called the Safe Money Trifecta, which is CDs, treasuries, and multi-year guarantee annuities, the annuity industry version of a CD. What do all three of those do? They protect your principal, you never lose a penny, you never pay an annual fee, and you get a contractually guaranteed interest rate for a specific term. Hello?

Never Touch the Principal

To me, if you have enough money or just looking at your lifestyle and your lifetime income needs, your income floor, whatever that is, maybe you can pull it off by just never touching the principal and taking the interest out, just like our grandfathers did during the Jimmy Carter era when they were getting these huge interest rates. I don't think we're going back to that because we didn't have $30 trillion in debt back in the day. But going back to the topic, is your retirement or your retirement plan volatile or contractual? You could have a lifetime income stream using an annuity, like a single premium immediate annuity, a deferred income annuity, a qualified longevity annuity contract, or an income rider. I always ask people two questions: what do you want the money to do contractually? And when do you want those contractual guarantees to start?

Lifetime Income

If you say lifetime income, then we're in the annuity category. There's not just one annuity. I love it when people go, "What's the best annuity out there?" I don't even know if you need one, A. And B, you must answer a few questions to determine which type will provide the highest contractual guarantees. So at the time of this taping, we have these high-interest rates, high for us recently because, in the last ten years, we haven't seen these types of rates. And then question, the curmudgeon question, the glass half full question, everybody, "well, these are great rates now. But what happens when they go down?" Well, we'll just deal with it. And the way we deal with it at that time, let's just say we're peeling off the interest in not touching the principle and just living off that interest; if interest rates go way down again, then we might be forced to buy a single premium immediate annuity or deferred income annuity, some lifetime income product at that time.

But why not enjoy the interest rates now? Why not take some volatility out of your portfolio? Why not take it out, period? Now, I know the masters of the universe and the financial architects and the portfolio managers that you're sitting with will say, "Well, you need a blend of this and that. And you need to stay the course. And if you'd own the stocks during these 13 days, in the last seven and a half years," or whatever the crap stat they're bringing up. But do you still want to do that? Do you still want to be volatile? Do you? You might be. Let's just say you say to me, "Stan The Annuity Man, America's annuity agent®, I disagree vehemently," great word, "with the fact that you want just to say, 'Retire from the market and retire from your job. Retire from it all. Just do contractual guarantees.'" Okay, let's take that side of the argument. Let me listen to you.

If you're going to be in the markets, then that money in the markets can be volatile; you should not care about it. It should not keep you up at night. You should not be checking the Dow or listening to Jim Cramer. By the way, do the opposite. I love him, but he's been wrong here recently. Bless his heart. But he takes shots. Good for him. But the point is if you're going to be in the markets, have it at a proportion or a percentage level of your portfolio that it doesn't hurt, that you're worried about it. For all you 60s and 70s, and 80-year-olds out there that are retired, even you 50-year-olds that retire early, do you want to check markets? "Well, historically, Stan, they go up. Historically, it's what they do, Stan." I understand that. But do you want to do that for the rest of your life? Me, I drink the Kool-Aid. I don't want to do that. I don't want to follow it.

Surfing Beside a Cruise Ship

I always tell people when you invest in the stock market; it’s like surfing beside a cruise ship. Think about that for a second. There are times you're going to catch the wave beside the boat. But most of the time, you’ll get sucked under the boat. And right now, many people are getting sucked under the boat and don't know what to do. If you have losses, a lot of the things I'm hearing now is, "Well, Stan, I'm going to have just to wait it out and recoup those losses, Stan." Well, what if that doesn't happen? Well, what if that doesn't happen? Why not get a guaranteed 5%, 5.5%, whatever the rates are at the time of this taping, and make it back slowly with bunt singles or bunt doubles, whatever you want to say? Why not do that? Can you afford a nuclear war on your portfolio if something happened like that? Can you afford a true mess in this economy, wherever it's headed at the time of this taping? Can you afford that? Can you stomach that? Can you emotionally deal with that?

Your Portfolio

I'm telling you to think about what I just said. Is it volatile, or is it contractual? And then, if you want to break it down, how much of your portfolio is volatile, and how much of your portfolio is contractual? And do not come to me, "Well, my advisor said 60% equities and 40% in bonds." If that's the case and you have bonds, you've found out that doesn't always work because underlying bond values can go down. Hello? That's bonds. Yes, bonds are contractual. If you hold them to turn and you have triple-A, triple-A, I get that. But it's volatile. And who knows when those are going to return? Some of the most conservative bond mutual funds and ETFs have been hammered this year because of interest rate movement. Going back, how much of your portfolio is volatile? How much of it is contractual? How much do you want it to be volatile and/or contractual? I hate it when people call me, schedule a call, and go, "Well, let me tell you exactly what my advisor said."

Stop. Just stop whatever sales pitch they heard. I don't care about what they say. I don't care about the sales pitch. I don't care about the seminar or what you went to. I don't care about the ad you read. I don't care about the radio show you heard on a Saturday morning. I don't care. All I care about is what you want and what you and your spouse want, and what you're trying to achieve. And I need you to stop not caring. I need you not to care. Stop not caring? I need you not to care what people think, including your master of the universe advisor, of which most of them, I have cowboy boots older than they are. They've never seen a down market. I have. You probably have. Are we there again? I don't know. But boy, is it messy. And you're at a time when you could decide to take some volatility, some or all, out of your portfolio and make it contractual.

What Do You Want?

Why wouldn't you do that? And I'm not talking about, "Well, you got to buy all annuities. You got to buy annuities because of annuity, annuity." No. Yes, I'm Stan The Annuity Man. I'm America's annuity agent. I'm the biggest proponent of contractual annuity guarantees on the planet. But you don't need all your money in annuities. Hello? Hallelujah. Amen. I just talked about the trifecta of principal protection: CDs, treasuries, and MYGAs. Well, I only sell one of those. And you can go to my site at and check out live MYGA rates. The point is, you don't have to follow the crowd. Be a contrarian. Think for yourself. Decide on chapter two of your life. And I will guarantee you this if you're married, and one of you, one of you, is anti-risk, one of the spouses is contractual 100%. It might be the male; it might be the female. There's nothing sexist about it. It is what it is.

But one of... In my relationship, my wife and I are both contractual guarantees. Okay? We both came from poor America. Not a middle-class, lower-middle-class America. So we love where we're at and that we can protect the principal and get a guaranteed interest rate. And yes, it's spread around with treasuries, CDs, MYGAs, income streams, et cetera. Just food for thought. I'm now at the place in my career where I want to educate people on annuities, number one. But I also want to make you think in a contrarian fashion, but common sense about where you're at with your retirement and where you're at with your portfolio and to just throw all this crap stuff of 4% rule and 60/40, 60% equities, 40% bonds. That's garbage. That's crap, and you're riding it down with them. I love the television world, "Well, we make money when you do."


Yeah. They also charge a fee when it goes down. Okay? I think there are a couple of platforms that they don't, but most of these fee-only advisors bless their hearts; I love them, but they're charging a fee when it goes down, too. Wouldn’t you want a part of your portfolio with no fees, no gotcha fees, no account fees, and no management fees? Why? Because it's contractually guaranteed. So going back to the original premise, I want you to think about this. Contractual or volatile. Volatile or contractual. You need to find a balance or go all in on one or the other. Okay? But most of you right now, when you're listening to this, you're saying, "You know what? I'm probably a little bit too volatile right now." Hallelujah, right? Well, it's time to look at contractual.

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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