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What Is the Purpose of Reverse Engineering Annuity Quotes?

Stan Haithcock
April 7, 2024
What Is the Purpose of Reverse Engineering Annuity Quotes?

Today's topic is a good one. What is the purpose of reverse engineering annuity quotes? He's saying, "Reverse engineers. Stan, you don't look like an engineer. You don't act like one." I'm not an engineer. My wife said the other day at the Hoover Dam, "One of the worst jobs ever for you would be an engineer." And she was thankful that I didn't have any part in building that, which makes sense.

But we're going to talk about reverse engineering annuity quotes. Now, the background to that, and at The Annuity Man, we have the best calculators on the planet. You can run lifetime income quotes and reverse engineering for them, meaning solving for a specific number. The reason that that's important is that my take on annuities is you use as little amount of money as humanly possible to solve for the contractual goal. I know what you're saying. The annuity gods are looking down upon me, going, "Stan, get all the money possible. Take it all." No, you use as little amount of money as humanly possible to solve for the goal. That's what reverse engineering quotes are all about.

Lifetime Income

Okay, let's talk about reverse engineering annuity quotes for lifetime income. Yes, you can do a period certain type income quote with Deferred Income Annuities. That's not what we're talking about today. If you want to do all those fancy things and you're the unicorn out there, go to The Annuity Man and hit, Book a Call. You'll get a very smart person that would not be me. There's this scant chance you get me on the phone, which I always tell people, "You either won the lottery or you lost." I guess we'll find that out after the call.

But the point is on reverse engineering and the quotes; we're looking for lifetime income. And remember that annuities, plural, are the only strategy on the planet that solves for lifetime income. As long as you are breathing, there's no ROI until you die. People love that. They're like, "What's the return on that Stan? I can do better in a mutual fund." Of course, you can just because it's a mutual fund. That's apples and oranges. But if you live to 150, wouldn't that lifetime income stream be good? I mean, no one ever asks, "What's the return on investment on Social Security?" It's a pension. It's a lifetime income. We're talking about pensions and lifetime income.

The 4 Annuity Types

Now, there are four ways to solve for lifetime income. You can go to my site and run these quotes 24/7, 365. No one will call, pester, bug, or show up at your doorstep. You can run them at your leisure, and you can do a lump sum or reverse engineer. The four types are Single Premium Immediate Annuities, Deferred Income Annuities, Qualified Longevity Annuity Contracts, and Income Riders attached to either Variable or Index Annuities. We don't sell Variable Annuities, and we ignore the Index Annuities when we're looking at Income Riders because those are the contractual guarantees. And you own an annuity for what it will do, not what it might do. The will do are the contractual guarantees of the policy.

The Two Questions

Now, going backwards a little bit, because this is foundational. I always ask, and my team always asks two questions. What do you want the money to contractually do? And when do you want those contractual guarantees to start? Let's just say your first answer is lifetime income. We're talking about reverse engineering lifetime income quotes. Lifetime income is the first answer. The second answer determines the product type. So, if you say, "Okay, Stan, I want lifetime income, but I need it to start within a year, or 30 days or within a year," we're going to reverse engineer the quote for Single Premium Immediate Annuities. If it's past a year, it could be Deferred Income Annuities, Qualified Longevity Annuity Contracts if you're using an IRA, or qualified money or Income Riders.


For example. You say, "You know what, Stan, income floor." The income floor, to me, means all the money that hits your account every single month. That's Social Security. That's a pension if you're so fortunate. By the way, spoiler alert: if you have a pension, that's an annuity. Dividend income, rental income, whatever's hitting that bank account, you might have a gap. Let's say you have $4,500 coming in from Social Security, rental income, and dividend stocks. You say, "You know what? We really need an extra $1000. If we have an extra $1000, we'll live very well. I don't have to disrupt my investments. The money's going to be hitting the bank account." Well, you can use our proprietary annuity calculators, reverse engineer the quote and put in a $1000 per month that you want to get. I paid a lot of money for the quotes, which are fantastic. And my wife's like, "Why do we pay all that money?" This is the reason. You can go in and run the quote, and then all carriers will bid on your business, and you'll see the least amount of contractual money it will take to create that $1000 per month.

So, we're using as little money as possible to create and solve that contractual goal. Now, you're saying, "Wait a minute, Stan. What about inflation?" Listen, if you want to solve for inflation, you'll have to come up with more money because the annuity companies don't give that away. I'll do a visual. Let's say you needed $1000 a month, and it costs $400,000 to create that $1,000 a month, joint-lifetime income with cash refund. I'm pulling that out of the mid-air, so don't write it down. There are 40 ways to structure it.

If you say, "Stan, I want it to increase with inflation." Then we'll have to come up with a lot more, say $100,000 more to make up for that. Remember this: if it sounds too good to be true, it is. And annuity companies are for-profit businesses, so they won't give anything away. When you reverse engineer the quote, in my opinion, it solves that income gap. You're still yelling at me. Stop. You're saying, "What to do, you still haven't talked about inflation. How do we do inflation?" Here's how we do inflation, Chester.

Don't Throw Darts

We solved for the $1000, right? And four years from now, you call me up, and you say, "Stan, I need another $575 because of inflation and the gap, and me and the Mrs. are taking the cruises." Fine. What do we do? You're right, we go back into the quotes and the calculators, and we solve for that $575. You see? You don't throw darts at inflation. You solve for inflation right now. You don't say, "Well, I think in the future we're going to need X." No, solve it right now. If you want to solve it right now, we buy an Immediate Annuity solving for that specific amount and reverse engineer the quote. Four years from now, "Stan, we need $575 more dollars." Single Premium Immediate Annuity, reverse engineer quote, solving for that, contractually. Not hypotheticals and theoreticals, that's what sets us apart.

These Are Contracts

Our whole saying is, "Will do, not might do." You own an annuity for what it will do, not what it might do. Unfortunately, everyone's talked about hypotheticals, theoreticals, and backtested nonsense in our business. These are contracts. We're buying them for the contractual guarantees of the policy. And I love that we offer reverse engineer quotes so that you don't have to use all the money for annuities. And, in fact, you should not. The annuity industry suggests that you use 50% of your investible assets. That does not include your home, car, guitar, and all that stuff, investible assets. But it doesn't matter because we're always looking to use as little amount of money as humanly possible to solve for the goal, and that's what reverse engineering is all about.

Remember, when looking at lifetime income, these companies are looking at your life expectancy or joint-life expectancies; interest rates play a secondary role. I'll repeat it again. Interest rates play a secondary role. Let me say it one more time. Interest rates play a secondary role in lifetime income. It's life expectancy. Now, for the curmudgeons, they're going, "That's not true. Prove it." Here's how I'll prove it. Social Security, which payment is higher, when you turn it on at 70 or if you turn it on at 65? Correct. 70. Why? Because you're older. Why? Because there are fewer projected payments, which means there are fewer payments, which means those payments will be higher.

Same thing with the annuity world, because why? Social Security is an annuity and is life expectancy based. I had a guy the other day go, "I really didn't like that quote. It was low." You're young. Get mad at yourself for being young. These companies fill tranches of age ranges when they bid on your business and are commoditized quotes. What does that mean? That means we shop all carriers for the highest contractual guarantee for your specific situation. In one week, it might be XYZ company. The other week, it might not be XYZ company because they filled that gap for you.

So, reverse engineering quotes are the way you do it. You can do it at The Annuity Man . And we will show you those quotes 24/7, 365. No one will call you, show up at your door, bug you, etc. Do me one favor; in addition to going to The Annuity Man, hit the subscribe button on our YouTube Channel. Thanks for joining me today and I'll see you on the 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.

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