401(k) Guaranteed Lifetime Income

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My name is Stan the Annuity Man, America's annuity agent, licensed in all 50 states. Today's topic

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is 401(k) guaranteed lifetime income. Can I get that in my 401(k), Stan the Annuity

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Man? You're the guy that can tell me that. You can tell me the truth, and I will after this.

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So 401(k) guaranteed lifetime income, that's a pretty hot topic right now, and most of you out

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there in the 50 states that you're in, the lovely state you're sitting in, if you're working for an

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employer, they typically have a 401(k) or 403(b) or 457, something that's deferring taxes. If it's

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a 401(k), hopefully your employer is matching what you're putting in. They're putting in more

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for you. I know that, I do that, the Annuity Man, and my people are so happy. But what's happened

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in recent years with, let's say, 14,000 people turning age 65 every single day, they're looking

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for lifetime income. You say, "Well, why are they doing that?" It is because most companies don't

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offer pensions. They offer 401(k). So at the end of your time with that company, you're going to

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take that 401(k) asset and you're going to roll it to an IRA somewhere, bank, big brokerage firm,

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whatever, and you're going to manage it or you turn it into income with annuities,

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etc. Now the 401(k) machine out there, and it is a big massive machine, big companies involved,

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they have seen the trend of people like me having people with 401(k)s transfer their money to the

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contractual guarantees that I offer with the carriers that I show, which are all carriers. And

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they're tired of that. They're saying, "Stan, you're just pulling up in these fancy cars,

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and you know, this isn't right. We got to figure it out." And what they've done is they've now

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started putting inside of 401(k)s choices for lifetime income, which I think on a conceptual

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basis is fine. Because what they're doing is they're validating what I've been screaming

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out here for the last couple decades, that annuity lifetime income guarantees are great. But there is

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a difference, however. What I'm seeing with the 401(k)s, big machines out there that are offering

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the income products inside your 401(k), so instead of you choosing mutual funds or whatever, you can

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choose an annuity for lifetime income at a future date. Great in concept. Okay. Here's the problem

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that I see. Annuities are commodity products. You have to shop all carriers for the highest

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contractual guarantee. For lifetime income, we say A+ or better, but shop all A+ or better companies

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out there. That's a bunch. And annuity quotes are like a gallon of milk. Every 7 to 10 days,

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they change. And carriers are setting their contractual guarantees to attract certain age

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ranges. That's how it works. Interest rates play a very, very, very minor role in the pricing. It's

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all about life expectancy at the time you take the payment. But what I'm seeing in the 401(k)

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world is there's only a couple of choices. And typically from what I'm hearing, those carriers

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are typically very big and they pay a shelf space or some type of fee to get in the platform.

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That's typically how it works. I'm not saying it works like that all the time, but typically

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that's how it works. My problem with that is in the annuity world, since it's a commodity product,

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you should be shopping all carriers, not the two or three that's on the shelf. Now,

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I don't know how the board of directors at that company sign off on that. I don't know how that

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is a fiduciary way to do it. Because according to the fiduciaries, you have to show all choices.

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You have to quote all carriers. You can't point people to just a few. But let me be very clear.

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I'm very happy that 401(k)s are starting to include that because what that tells me is what I

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already know. People want lifetime income. People want an additional pension to Social Security,

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which is the other annuity that they have. They want lifetime income. They want a consistent flow

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of income into their account for chapter two of their lives. So fortunately, the 401(k) world has

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figured that out. The defined contribution, that's what 401(k)s are called, defined contribution

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plans. Okay. Defined benefit plans are pensions themselves. Don't see those much anymore. Defined

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contributions. So the 401(k), you do have those choices, but you're limited to those choices.

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And I don't know the perfect answer to this. My opinion, 401(k)s should be for growth. You're

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working. You want the assets to grow. Once you stop working is when you then need to pivot and

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lock in lifetime income guarantees. In other words, keep your powder dry and then lifetime

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income shop, hopefully with us. But to lock it in there during that time period, I'm just not sure

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that's the right move for you. Maybe for a small portion of what you do as an asset allocation is

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fine, but also understand you're only getting quotes from a couple carriers in most cases.

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I'm not seeing a 401(k) that has all choices. I'm sure it's administratively impossible, but

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that doesn't mean it's right to just put two. So the 401(k) lifetime income planning out there is

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happening right now, and the reason is the 401(k) companies want to hang on to that asset. They want

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to get compensated for that asset. They don't want you to transfer that asset to XYZ company using

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the Annuity Man to quote. They don't want that to happen, even though it happens all the time.

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What I'm telling you as a consumer is be careful over here. Have them send you a specimen policy

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if you're looking at one of those annuities inside the plan. Read that specimen policy. If you want,

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to go to my site at the Annuity Man and schedule a call for us to give you a second opinion on it,

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we will. And most likely we'll say, "Hey, if you're good with that, here's the limitations.

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If you're good with that, go for it. Good company. It's got to be a good company."

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But we're also going to say also consider keeping your powder dry and then shopping all carriers for

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the highest contractual guarantee. Because what they can't say on the 401(k) side is these are

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the best. They can't say that. These are the best products. They can't say that. These are the best

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guarantees. They can't say that. What they can say is we have approved these carriers because

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they're strong and they're on our platform. That's true. But that doesn't mean you lock that in. Do

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your homework. There's no mulligans in retirement or chapter two of your life. You have to really

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dig in and educate yourself on what you're doing. Okay? So, again, conceptually, 401(k)s and

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having annuity-type lifetime income options inside of this, it's a good start. It's not where it's

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going to finish. It's a good start. And I'm glad that they've acquiesced and said, "Okay, yeah,

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we're going to put those in there, too, because there's a demand for it." There's a demand for

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pension-type lifetime income because there are no pensions existing anymore unless you work for the

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federal government, state government, military, I guess the federal government, a good labor union,

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etc. And some small handful of companies still offer pensions, defined benefit plans. But defined

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contribution plans, you're starting to see it. Don't let some guy at some luncheon say, "Yeah,

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you should do that." No. Dig into it a little bit more. Okay? Find out liquidity provisions.

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Find out pivot. Can you pivot out of it? Find out what the contractual guarantee is before you

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lock in. You can do that and then shop it and see if it's even in the ballpark. What

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we found a lot of times is some of the things that are being offered in the 401(k)s aren't

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even in the ballpark of contractual guarantee, the highest contractual guarantees that we can offer,

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shopping all carriers. And typically the carriers inside of those 401(k)s, we have them, too. So,

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it'd be neat to just see what this is doing apples to apples. Doing apples to oranges. Do it apples

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to apples and see what it is. Key word, educate yourself. Slow the game down. There's never an

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urgency to buy an annuity. The urgency is for you to understand what you're potentially going to

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buy. One last thing. Do me a favor. Above my head, there is a video link. Need you to click that

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because that explains how the process works at my company, The Annuity Man, based in Las Vegas.

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All of the agents that are all licensed in all 50 states, not on commission, they are located, they

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are all under one roof. We don't have any remote agents, okay? Everybody's under one

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roof. My policy delivery team's under one roof. So, take a look at that. Make sure that you run

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quotes. You can email me at [email protected] and I will respond. See you next time.