Annuities Explained Simply

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Hi there, Stan The Annuity Man, America's annuity agent,

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licensed in all 50 states and Puerto Rico. I say that for Dr. V here. He

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speaks fluent Venezuelan and Puerto Rican. Did you know that, Doc, Big C? He does.

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Annuities explained simply. Somebody, please, God, explain these things simply. Please, I beg of you.

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Well, you came to the right video because that's what I do. I'm the

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annuity whisperer. I can explain this stuff simply so that you understand them.

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We're going to go product by product, and I'm going to put it in Stanglish, Stanisms. It's going

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to be fun. I'll try not to use curse words. That's the cool part. Can't make that promise because you

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never know what will trigger me, because there are some triggers. There are some little things

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living in the back of my head that try to come out sometimes, and they do, and that's okay.

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But today I'm going to be happy, happy, joy, joy, is what they're going to say. Happy,

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happy, joy, joy, Stan. And I'm going to do annuities explained simply. I'm going to have

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a happy face, a joyous face, for as long as I can hold it. After this.

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Alright, annuities explained simply. I'm going to do as many as I can think of.

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How about that for preparation? You know what I'm saying?

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Multi-year guarantee annuities, the annuity industry version of a CD.

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MYGAs. All of these, you can go to my site, theannuityman.com.

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You can pull them up, look at the best contractual guarantees for your state.

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And once again, I am the founder of CGO, Contractual Guarantees Only,

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which means that you own an annuity for what it will do, not what it might do,

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not the hypotheticals and the theoreticals. So that's MYGAs.

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Now let's go through the four types of annuities that provide

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lifetime income for as long as you're breathing. It's the only product type

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that will pay for as long as you're breathing. And don't come at me like,

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"What about a 30-year bond?" My answer to you is, "What if you live 31 years?" Duh.

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Okay? So don't hit me with that. Used to manage bonds with Morgan Stanley, so I understand that.

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Alright? So, Single Premium Immediate Annuity, the grandfather of all annuities, put on

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the planet in Roman times for the dutiful Roman soldiers and their families as a pension. That's

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where it all started and came from and has been sold in this country for a couple hundred years.

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No moving parts, no annual fees, no market attachments. It is a straight

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pension that's primarily based and priced on your life expectancy,

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or if it's joint life expectancies, at the time you take the payment.

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Payments can start as early as 30 days from policy issue date up to a year.

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Next one, Deferred Income Annuities, DIAs. It's an immediate annuity that's deferred. Same thing:

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no moving parts, no market attachment, no nothing, no fees. It's primarily

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based on your life expectancy or joint life expectancies at the time you take the payment.

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Interest rates play a secondary role on all of this. Secondary, very minor role. But a

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Deferred Income Annuity is when you want to defer past one year. A SPIA magically becomes a DIA.

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Now the next one is a Qualified Longevity Annuity Contract, put on the planet

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in 2014 by our friends at the IRS and Department of the Treasury. It's a

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SPIA. It's a DIA. It's a QLAC. They're all the same product.

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No moving parts, no annual fees, no market attachments. Life expectancy

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drives the pricing train. The key here, though, is qualified. You can only use it

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in a Traditional IRA with Traditional IRA money to create a pension. And the IRS and

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the Department of the Treasury want you to use that IRA money to create pensions that

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can combine with the other pension that you own called Social Security.

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Alright? Now, SPIAs and DIAs can be used in Roth IRAs, IRAs, Non-IRAs.

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QLACs, only Traditional IRAs.

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And then the other lifetime income product is an income rider. Rider

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means it's riding on top of a policy. You can either attach it to a variable annuity, a RILA,

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Registered Index-Linked Annuity, or an indexed annuity. Indexed

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annuity historically provide the highest contractual guarantee for income riders.

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Income riders, once again, Roth, Traditional IRA, Non-IRA, are for income in the future. So

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if you answer the two questions that I always ask, what do you want the money to contractually do,

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and when do you want those contractual guarantees to start? If you said after one year, two years,

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three years, four years, seven years, we're going to quote income riders in addition

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to DIAs and possibly QLACs, depending on what type of account you're using.

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But income riders are contractually guaranteed products. Ninety-nine percent of them are not

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annuitized, meaning you're not ripping the knob off the water faucet, even though it's

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a lifetime income guarantee. They can be set up single and joint.

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The next product is a fixed index annuity. We only look at that as a

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delivery system for the income rider. It's a CD product that was put on the planet in

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1995. It is the most overhyped, oversold, overpromised crap sales pitch of all time.

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If you're going to the bad chicken dinner, expensive steak dinner seminar, they're going

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to be pitching you a one-size-fits-all indexed annuity because that's the highest-commission

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product on the planet. Okay? Don't have anything against them. We sell more than anybody,

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but we only sell them as a delivery system, at the time of this taping, for income riders.

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Next product is a RILA, Registered Index-Linked Annuity. It's the brokerage version of an indexed

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annuity. Okay? Has a little bit more upside, but I don't believe you should be buying

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that either. If you want market growth, buy the market. Don't buy an annuity.

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Same thing goes with the next product, which is a variable annuity. In essence,

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a variable annuity is nothing more than a bunch of mutual funds wrapped with an

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insurance policy. The insurance industry calls the mutual funds separate accounts,

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for whatever reason, but they're mutual funds to me and you.

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And the typical annual fee for a variable annuity is 3% for the life of the policy.

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Kind of a dinosaur, kind of being replaced by the RILA at this point in time by brokerage industry

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people that are selling annuities. They probably shouldn't be selling annuities, but they are.

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But those are the primary types. You also could have a group annuity that's involved with your

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company that pays a specific interest rate, kind of like a MYGA. Those are semi-dinosaurs as well.

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That's about it. Annuity world is very small and very simple if you break it down to the

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contractual guarantees. We represent pretty much every carrier out there at theannuityman.com.

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You can email me at [email protected]. No, that wasn't... Again, Dr. C, when I touch my face,

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that doesn't mean some subliminal thing. It means there's a booger right there and

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I'm trying to push the booger. It's a booger. Booger, booger, booger.

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So go to my site at theannuityman.com. You can email me at [email protected].

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You can book a call. You're probably going to get me.

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But one last thing.

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Above my head, I did a really good video that really talks about what we just talked about,

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the commoditization of annuities. There's not an annuity that's better than the other.

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I know every single company wants you to believe that. They have really nice brochures and logos.

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I represent them all. I have nothing against them, but they know I'm right.

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These are commodity products. You should shop all carriers for

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the highest contractual guarantee for your specific situation.

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So, we look at the number. Okay? Then we look at the rating and the financials. And

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then you look to me for my recommendation. And that's the trifecta. And that's how it works.

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How about that for annuities explained simply? Only by me,

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Stan The Annuity Man. See you next time.