You Already Own Two Annuities: Shootin' It Straight with Stan®
Today's topic is you already own at least two annuities. You say, what? Wait. Stan, The Annuity Man®, I hate all annuities. I was told to hate all annuities. I was told that if I buy annuities, I should enter the gates of hell. Somebody told me that on TV or something to that effect. I disagree with you, Stan, The Annuity Man, person with no last name. I do not own any annuities.
Hey, before we get started with that, everybody's commenting on my scruffy face. If you're on podcasts, listening to the podcast, you're like, shut up. We can't see it. But hey, I'm going through a midlife crisis and it's looking pretty good. The only problem is it's coming in a little gray, which is not good and a reflection of the intensity and the caring that I bring to all my clients. Of course, in all 50 states.
Let's talk about the two annuities that you already own. The first one is obvious, Social Security. No, that's not an annuity. Let's then describe Social Security. It is a lifetime income stream that's going to pay you as long as you're breathing. The lifetime income stream is primarily based on your life expectancy at the time you take the payments, the older you are, the higher the payments nod your head. By the way, Social Security is the best inflation annuity on the darn planet. If you don't believe that at the time of this taping, you're getting ready to get an increase, in the next year you're getting ready to get another increase. It's not like annuity increases to your income stream where the big building annuity companies just lower the payments to make up for that. This is political baby. These are your DC wonderful politicians that care about you that are increasing it based on a formula that's pro-consumer.
See you already own one Social Security. You okay, I'll give you that one Stan. You won that argument. You're darn right I did. What's the other one, Stan? Well, the other one that you don't even know is that it's an annuity. But it is an annuity because it functions like an annuity because it pays a lifetime income stream regardless of how long you're breathing. I know there's people that are going to disagree with me on that, but they're wrong. That second annuity required minimum distributions from your IRA RMDs. And you’re like “Woah! Slow down there Sunny, what are you talking about? RMDs?” Yes, remember those at the time of this taping when you turn 72 the IRS, taps you on the shoulder and says, "By the way, we're the IRS and you've been deferring all this money all this time and we need some money, we need you to pay taxes. Regardless of if you need it, Mr. Jones, you're going to have to every single year take out a percentage of that IRA asset total to satiate us at the IRS. To satisfy us and to start paying your fair share, " according to the IRS.
Well, that lifetime income stream, as long as you're breathing, that's called an annuity. I am the first person out here that is officially declared required minimum distributions RMDs as a lifetime income stream annuity because it is. It factually is, it semantically is. It is.
So, now you own two. You say, "Well, I know what you're saying. I don't know about that one." Well, you know what, every time you disagree with me and that every year you have to take requirement on distribution, you should be like, "That Stan is right again. He's right again and brutally factual about annuities," and yes RMDs is what I call a forced annuity, F-O-R-C-E-D annuity.
Now you might even own three. What are you talking about? Three? Yes. The third one is a pension. If you work for a company, one of the few companies that offer a pension payout. A defined benefit type payout or you work for the federal government or state government or local government or whatever trade union that has set up a lifetime income stream in addition to the gold watch. Then you own three. Social Security, RMDs, and a pension if you are so fortunate. The question then is, Stan The Annuity Man, should I add another lifetime income stream annuity to those annuities that I already own? The answer is, it all comes down to what type of income you're trying to solve for.
Annuities were put on the planet and the Roman times to solve for lifetime income. It was a gift to the beautiful Roman soldiers and their families as a lifetime income stream and that's what they do. That's the primary way that people use them. You can also use them for principal protection or long-term care or those type of, legacy, those type of things. But most people are buying annuities to fill in that gap for the income flow so they can go live their life and drive around in that huge RV or the fifth wheel, and look at the mountains and drink coffee. Whatever your plans are. Chapter 2 of your life, just remember, there's no U-Haul is behind hearses. Can't take it with you. Put the income floor in and go live your life.
In addition to having all these annuities and income floor, you're going to be a better investor. Why? Good question, it’s because you don't have to disrupt your portfolio because you have a lifetime income stream coming in. But by the way, Stan, what about inflation? Good question. The answer is when you need to address inflation and Social Security, which is the best inflation annuity on the planet, doesn't address it properly or enough, then you come to my site at theannuityman.com and run a reverse-engineered quote, solving for the specific dollar amount you need to fill in that gap for the monthly income needs for inflation. That solves that.
I know what you're saying. You're saying, "Wait a minute, Stan. I'm still a little hazy on this RMD stuff.” It is a forced annuity. I'm going to rewrite this whole thing out here because I do that occasionally. I am the thought leader in the annuity space. Yes, I have a scruffy beard right now, but that still doesn't mean anything. This means I'm a scruffy beard thought leader of which my wife wants me to shave and my see he goes, "Do you really want to do the recordings with you looking like that?" Which was a really nice thing for her to say kind of. She's a motivator. But she is one of the smartest people in the annuity industry, which is the reason she runs theannuityman.com.
But here's the thing. When people say, "I hate annuities, Stan. I hate all annuities and this guy on the television told me to hate all annuities too. My advisor said hate all annuities." You already own two, hypocrite. Don't be an annuity hypocrite. Embrace the fact that you already have lifetime income. Embrace the fact that you already have two items that are going to fill in that income floor as long as you are breathing. Embrace that. Don't hate annuities. What do they say? Don't hate the player, hate the game. I don't know what that is. The point is, don't hate annuities because you already own two. Don't walk around pontificating at the cafe after you ordered the moon over my whammy or eggs over easy breakfast. Don't sit there and go, "I hate annuities. I went to a bad chicken dinner seminar and I gave that guy the ‘what for.’" No, you already own two annuities. Remember, Social Security and RMD. You might even own a third one with a pension, and you might need another one as an income flow addition so that you can go live the life that you've earned to live in Chapter 2 of your life.
So, you learned something today, and that's always good to learn. You need to make a goal every day to learn something new. Now I can fill in that gap two or three times a week. Actually, every single day we have fun with annuities, podcasts on Tuesday, I release two or three videos a week. I write two blogs. There's a newsletter on Saturday. You can learn something new every day, at least I tried to as well. But what did you learn today? That you already own two annuities? I congratulate you. You United States citizens out there for already owning two annuities. I'm assuming everyone out here listening has an IRA. If you do, that's the RMD part. That's the second annuity.
Man, we've had fun. I will tell you this right now. This is between me and you. I want you to lean in. This little scruffy beard goatee I got going on is making my brain work better. It makes me feel young and vibrant. Doesn't make me look young and vibrant, but for as long as I'm going to keep this, I think these Shootin It Straights with Stan is going to be fantastic, or even more fantastic than you could ever imagine.
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