So glad that you joined me for this timely topic that's going to make a lot of people mad and make a lot of people question things, but it will make total sense when you hear it. The title is "When you Retire, You Need to Retire from Both Your Job, Your Work, and The Markets," so you got to retire from two things, work and the markets.
Now, this runs contrary to what every single person says on Fox Business or CNBC or your local advisor or whoever. They argue, "Well, you have to have money in the markets, you have to have market exposure, you have to go to college, you have to buy a house, you have to, you have to, you have to." Do you have to? I don't think so. I need you to hear me out.
Do you want to follow the markets? Do you want to follow the ups and downs of the Dow, the NASDAQ, and all of this stuff? Will more money make your life different? I was on a call today and asked the person; they had, I don't know, a million-five? Good for them. There are a lot of people like that. But I've had calls with people with 200,000, 500,000, and they could make the income needed with Social Security and, say, peel off interest from a MYGA, a CD, or treasuries, which is the trifecta of safe money. My question was, "Would an extra 500,000 or an extra million change your life? Would you eat differently, dress differently, drive a different car, or get a different house? Would you get a Learjet? What would you do?" 99% of the time, when I ask people that question, they say, "You know what? My life wouldn't change." Speaking for myself and my lovely wife, Christine, of 35 years from rural Nebraska, it's not the end of the world, but you can see it from there if you know what I mean. Our lives wouldn't change if we had more money. They wouldn't change a bit. We'd eat the same thing. We eat the same food we ate when we were poor for whatever reason. It tastes good. We wear the same thing. I wear the same logo gear. Nothing's going to change if I make more money in the markets.
Now, if you're addicted to that if that's what you like and you get up, and it's a passion like playing guitar or working on cars or playing golf or painting, if the markets represent that to you, stay in it because that's what you do, that's what you love, and I respect that. I have 80-year-old clients that still trade many futures and options and derivatives, and they go nuts, and good for them. But the majority of you out there need to not only retire from work but retire from the markets. When you retire from work, I guarantee you will walk out the door when you retire from work. You went, "That's it. I'm never thinking about that place again," in most cases, unless you're an entrepreneur and you sold it and you kind of care if the person's going to run it to the ground, but if they gave you enough money, it doesn't matter. But the point is if you're going to do that with work and you could walk away and cut it off, why wouldn't you do that with the markets? They're volatile. It's not just going to go straight up like it always has. Most advisors out there right now, I have cowboy boots older than them, truly. They've only seen a bull market. They think everything is going up.
Stanley Druckenmiller, a very smart person and an investor, said that in the S&P, or markets in general, it's going to be hard to make money in the next ten years. I hope he's wrong. But what if he's right?
Now, am I saying don't put money in the markets? No, you do what you want to do; it’s customizable, but if you're going to have money in the markets exposed to risk, have money there that you don't care about, that's not going to upset you and keep you up at night and wake you up in the morning and make you check and check and check your phone and check and check and check the website, check and check and check Market Watch. It's over. Retire from your job, retire from the markets. Live your life. There's no U-Haul behind hearses. You can't take it with you. Go live your life.
As I said in a recent video, there are three phases of retirement: Go-go, slow-go, and no-go. Use the money. Go live your life. Tell your beneficiaries you will take care of yourself and the spouse. You're going to travel. You’ll buy the guitar you wanted or the car you wanted. You're going to go on the cruise. You're not going to watch the Dow.
Now, how do you do that? If you have enough money just to protect the principal and peel off the interest, you can buy multi-year guarantee annuities, the annuity industry version of a CD. You can buy CDs from banks and/or brokerage firms, and you can buy treasuries at treasurydirect.gov. Two of those I don't sell. Hello? CDs and Treasuries. I don't sell those. I sell MYGAs. I know what I'm doing out here when it comes to that, and we represent pretty much every single carrier. You can find the best-fixed annuity rates on the planet and my site at theannuityman.com. But you can also go to bankrate.com, no affiliation, they're not paying me, for the best CD rates, and you can go to treasurydirect.gov, G-O-V, and find the best treasury rates. If you just did those three products right there, you protect your principal, you pay no fees, and you can peel off interest if you want to; you don't have to.
I need you to take out the pencil, and I need you to add things up. Your income floor adds up to social security. How much is that per month? Add up any type of pension that you're getting. What is that? If you have rental income, what is that? If you have legacy stocks that you'll never sell that kickoff dividend, what is that? Social Security's the best inflation annuity on the planet. Then from that, what's the additional income you need? Right now, I'm saying, "Let's see if we can never touch the principal and just take the interest off," and at the end of the duration, we look at that and say, "Okay, do we buy another MYGA? Do you transfer it to a CD? Do you transfer it to a treasure?"
So people, contrarians out there go, "Well, that sounds great, Stan the Annuity Man, but what happens if interest rates go back down? We've locked in at these really good rates, and then suddenly, rates go down. What do we do with that?"
I'll tell you what we do. Then we look at immediate annuities at that time. If our hand is forced at that time to look at annuitization, which in English means creating payments, then we will do that. If rates continue to be at these levels, we’ll stay there. Or if they're higher, we'll just continually roll them.
What's the risk, Stan the Annuity Man? The risk is that if rates go lower, we might be forced to annuitize some of the money to reach your income goals, but until that happens, we're going to ride the interest rate train, player. We're just going to take the money, not paying any fees on it, and then we're just going to peel off interest if needed.
Let's just look at rational numbers right now. Right now, in the world that we're living in, CDs, treasuries, MYGAs, MYGAs right now, Multi-Year Guarantee Annuities, Fixed-Rate Annuities, at the time of this taping, look at the date, 5% or more in most durations, or right at 5% or more. We haven't seen that in a long time. CDs and treasuries, 4%-ish, right? Let's just say, being conservative, the mixture of all three of those, CDs, MYGAs, which are annuity industry versions of a CD, and treasuries, you could average 4 to 4.5% on the money. If you have $1 million and could average 4.5%, what's that mathematically? You're right, player. $45,000 a year, and you don't touch the principle. Would that work in combination with Social Security? Do you have to be in the markets? Do you have to be volatile? Do you have to take advice from a master of the universe that's throwing darts like everyone else? Do you have to pay an annual fee for them to throw darts?
You do know that, right? You do know that you're paying fees for people to throw darts. They're good people, but they don't know. They wouldn’t be talking to you if they knew where markets are going. They'd be on the Learjet waving, "Hey, hey. Hey, how are you doing? Don't call me." But they don't know. They're doing the best they can throw darts. But we're a black swan event from this thing going nuts. You're at retirement; you’re at chapter two of your life; nod your head. Do you have to be in the markets just because people tell you? Do you have to buy another car just because people tell you? Do your kids have to go to college just because people tell you?
It's time to do the math. It's time to figure out if you can just live off the interest. I'm not talking about the variable annuity and index annuity, hypotheticals, and theoretical. I'm talking about guaranteed annual interest rates that treasuries, CDs, and MYGAs can provide. Not hypotheticals, not theoretical, not unicorns are chasing the butterflies. I want you to think about this, and this is a big one, and I'm going to get so much hate now. Bring it on. But I'm right. When you retire, you need to see if you can not only retire from your work but retire from the markets and volatility.
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.