In the annuity world, there are no good answers, just bad sales pitches. On the internet, you see things like, "Oh, get up to an 18% return with market protection, with principal protection." Give me a break.
As I always say, every single time, if it sounds too good to be true with annuities, it is, without exception. What I want you to be is not the stupid person that they are looking for. “They” being the annuity agents and advisors who literally target people that are not sophisticated in finance and are not sophisticated with money, but happen to have this lump sum because they've worked their rear ends off. They've saved. They've scrimped. They put money in the 401(k) and then all of a sudden, they have hundreds of thousands of dollars. And then some sociopath tells them something that sounds really good.
I always tell people, "If the annuity sales pitches that you hear were true, then the country's financial problems would be solved." I would go up to Janet Yellen and Mr. Powell at the Fed and say, "Hey, I've got it solved. This product here can give you full market participation and protect the principal." And they'd be like, "Great. That's where we're going to put all the money." You can't be that stupid, can you?
Or the person this morning says, "I want to buy an Immediate Annuity, from my sister, but I want it to adjust for inflation. I want the flexibility to get out of it. I want, I want, I want." It doesn't work like that. Annuity companies have big buildings. You solve for four primary things with annuities: Principal Protection, Income for Life, Legacy, and Long Term Care. The acronym is PILL. You can't have your cake and eat it too. There is no cake. There are only contractual guarantees, but that doesn't stop the sales pitches. And I blame the industry. This could be cleaned up.
I spend a lot of my day explaining to people that what you bought isn't going to do what they promised, or what you're considering buying isn't going to do what they promised at the bad chicken dinner seminar. There are no perfect answers. There are no good answers. There are just bad sales pitches.
We're at a time when there are interest rate movements. There's a war in Ukraine. There are mid-terms coming up. There's a lot happening, but there's always a lot happening. I get questions all the time. "Is it the right time to buy? Should I time it? Are rates good? Are the actuary tables at the right time?" If you ask that to anyone, other than me, and they say "Yes," to any of that, it's garbage. Annuities are commodity products. You shop all carriers for the highest contractual guarantee.
There are no perfect answers. There's no perfect timing. Annuity companies have big buildings for a reason. Why? The annuities are issued by life insurance companies and life insurance companies know when we're going to die. Because they know when we're going to die, they price their products accordingly. They win. That's the reason life insurance companies have big buildings, and property and casualty companies do not have big buildings. They're always coming and going because they don't know when the hurricane's going. That doesn't happen in the life insurance business. They know when you're going to die. Those are called actuaries. Life insurance business, with all these computers, they come out and they go, "You're going to live 18.6 years. You're going to live to 87.3." Whatever. And then they price things accordingly.
My point is this. When you go to look at annuities and there are many different types, but if you say, "I hate all annuities," or, "All annuities are expensive," or "I wouldn't touch any annuity," you are a moron. I always tell people, "If you don't know the answer, don't bluff. If you don't know the details, don't spew." I'm not out there talking about cooking. I can't cook. But I know annuities and I know them backward and forwards. I know enough to know that if someone's out there saying, "All annuities are expensive," or, "Don't ever buy an annuity," then they haven't really thought it through. Social security is an annuity. Pensions are an annuity. Multi-Year Guarantee Annuities are the annuity industry of a CD. So there's a CD-type annuity. Hate CDs, do you? No, of course, you don't. Let's get educated before you say, "I hate all annuities." Seriously.
When you hear the sales pitch, say to that person, "Show it to me. Just the contractual guarantees. Show it to me at zero. Show it to me at Armageddon. Show me what the policy says it's going to do. Period. That's what I want to see. Don't show me hypotheticals. Don't show me back-tested. Don't show me projected. Don't show me your mom's made-up statement." You don't need a friend for an advisor. You need someone who's going to shoot it straight.
The other thing too about there are no perfect answers, just bad sales pitches. If the sales pitch sounds too good to be true, write down exactly what that agent has said. All that too-good-to-be-true yumminess and then sign it, date it, and flip that page around and have that person sign and date it too. Have them own the sales pitch that sounds so great. Guess what? That pen's going to weigh 10,000 pounds and if they do sign it and they are the Ted Bundy of annuity sales, then you've got them. There are sociopaths in the annuity industry that you have to be very careful of.
Remember this. If you can't explain it to a nine-year-old, do not ever buy it. A lot of these products are so convoluted and they're so messy and they're so complex, that you'd never buy them. If you have any type of questions, like, "I wonder how that really works," ask the agent for a specimen policy.
Obviously, if you're working with us at theannuityman.com, we will provide you as much information as you can imagine. Specimen policy, copies of applications, all that stuff. Even though we take care of the application process from start to finish, if you want to see the policy, we'll send it to you. There's no urgency to buy an annuity for a bonus or some type of big-time deal. There are no big-time deals. These are contracts. There's no urgency to own an annuity. The urgency is for you to fully understand it and feel comfortable with the contractual guarantees and make that decision on your terms and on your timeframe.
So, be careful out there. Obviously, we would love to have you as a client, but you might say, "You know what, Stan? You're drinking too much coffee. We're not sure. You're not calm enough." I can do that if you need me to do that, but I'm a glass-half-full dude. I'm Stan the Annuity Man. I'm America's annuity agent. I'm providing contractual guarantees across the fruited plain for some of the greatest people on the planet. Those people are called American citizens. I like providing contractual guarantees. I like providing things that don't go down in value. When people call, they never call and say, "Hey Stan, how's it going? How's it going with the account?" It's going with the account just like we talked about. It's a contractual guarantee. They know because they bought it for the contractual guarantees of the policy. They bought it for what it will do. Not what it might do.
That's annuities in general. Anything else is a bad sales pitch. There are no perfect answers. The answers revolve around two questions. What do you want the money to contractually do? And when do you want those contractual guarantees to start? And then to follow that up is the acronym, PILL. P stands for Principal Protection, I stands for Income for Life, L stands for Legacy and the other L stands for Long Term Care. Those are the four things that annuities contractually solve for. If you don't need to solve for anything in that PILL, you don't need an annuity. Notice there's no G for growth or M for the market. It's PILL.
Most agents out there unfortunately are selling one product. And if they sell enough of it, they go to Bora Bora or Italy with their wife, husband, and/or girlfriend or boyfriend. I mean, that's what drives the train most of the time, but just be smart out there. If it sounds too good to be true, it is every single 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.