Annuity vs Pension: Which One’s Better for Retirement?

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Hi there, Stan the Annuity Man,

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America's annuity agent, licensed in all

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50 states. Thanks for joining me.

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Question of the day, is an annuity

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better than a pension.

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Tough question, loaded question. I'm

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going to have to break that question

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down just like your English teacher

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broke down sentences. Remember that you

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had to diagram sentences? I don't think

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they do that anymore, but I had a I had

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a I had a teacher in like junior high

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school. We had a diagramming sentences

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class. I'd rather kill myself than do

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that. Seriously. But that's what we're

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going to do is annuity better than the

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pension because it's a little bit

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broader than that. It always is in the

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annuity world. There's a lot more

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details that you need to know. So, I'm

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going to channel that English teacher. I

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can still see her sitting back there and

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looking at me with that glaze like, you

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know, because I, you know, I speak

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southern. I don't diagram sentences too

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well. But I'm going to break this

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sentence down after this.

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I guess in the south the better way to

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say it would be I don't diagram

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sentences too good right is an annuity

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better than a pension first of all you

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can't say the word annuity it's like

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saying the word trucks saying the word

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restaurant or saying the word shoes or

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saying the word coat whatever an annuity

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can be many different types I hate all

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annuities really social security d for

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no you don't of course you don't Um,

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annuity can mean principal protection.

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Annuity can mean lifetime income.

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Annuity can mean solving for long-term

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care. Annuity can mean solving for

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legacy annuity. There are many annuity

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types. Single premium immediate

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annuities, deferred income annuities,

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qualified longevity annuity contracts,

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multi-year guarantee annuities, fixed

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index annuities, charitable gift

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annuities, variable annuities. I can

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keep going, but I ran out of breath. The

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point is annuity

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means a lot of things. So, is an annuity

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better than a pension?

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Well, um, a pension is an annuity.

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That's Here's where I'm starting to

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diagram the sentence right here. A

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pension is an annuity.

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Okay. Single premium immediate

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annuities, deferred income annuities,

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qualified longevity annuity contracts,

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and income writers are pension

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guaranteed lifetime income products.

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Okay. So, those annuity types are are

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pensions. So, is annuity better than a

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pension? One and the same with those

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four. Is an annuity better than a

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pension if you need principal

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protection? Yeah. Uh or yes, formally

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because an annuity can provide principal

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protection. So you don't lose any money.

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You just get an interest rate, etc. Is

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it better than a pension? It would be if

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you answered the two questions, what do

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you want the money to contractually do?

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And when do you want those contractual

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guarantees to start? And your answer

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was, I don't need income, I need

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principal protection. Well, then it's

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better than a pension because you can

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get principal protection with c certain

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types of annuities. So, the question

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that I get and I get this all the time

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is should I do an annuity or a pension?

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And

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an annuity is a pension. What's the goal

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of the asset? Just when you start

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thinking annuities, okay, and not many

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people wake up in the morning thinking

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about annuities, but with 10,000 baby

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boomers hitting the age of 65 every

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single day, a lot of them are thinking

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about guarantees. And what are annuity

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types? They're they're guarantees.

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They're transfer of risk contractual

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guarantees. Now, I have a easy to

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understand and remember acronym. It's

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PIL. P stands for principal protection.

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I stands for income for life. Um L

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stands for legacy. and the other L

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stands for long-term care confinement

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care. I'll do it again. Principal

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protection income for life, legacy,

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long-term care, confinement care. If you

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do not need to solve contractually for

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one or more of those items in that pill

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acronym, you do not need an annuity.

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Okay? If you're looking for market

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growth, you do not need an annuity. I

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know that's not what you hear at the Bad

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Chicken Dinner seminars and some of

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these crazy things you see on the

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internet and some of the ads like,

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"Check out our 11 point 11.8% 8% return

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on annuities. I mean, I covered that in

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a recent video and had to go get

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counseling afterwards because I went

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into this dark hole of depression

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because of the fraudulent nature of

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those ads. It's ridiculous. So, you

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really can't answer the question, is an

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annuity better than a than a pension?

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The question that you can't answer is

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what do you want the money to do? What's

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the goal of the asset for you, your

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family, your spouse? you know, what are

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you trying to achieve? And if it's

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lifetime income, then let's go let's go

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shop for lifetime income. What's

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lifetime income? It's a pension. What's

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social security? It's a pension. Is an

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annuity better than a pension? Annuity

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is a pension with some types. But with

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some types of annuities, you can protect

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the principal and they're not income

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products. Okay. The other thing that I

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want you to put in the back of your head

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and bring it out when you need it is

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that a lot of people say, "I never buy

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an annuity because when I die, insurance

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company keeps the money. Why would I

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ever do that, Stan?" And if you're

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saying that, "Yeah, Stan, you're

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pointing at the screen right now. You're

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wrong. Slow down." Because you can

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structure the lifetime income pension

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payment so that 100% of the any unused

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money when your Larjet hits the mountain

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will go to your beneficiaries. even

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though the annuity company's on the hook

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to pay as long as you are breathing. All

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right? So, let's get rid of all these

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misconception crap. When people say the

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word annuities, when journalists say the

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word annuity, when the money manager

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says the word annuity, when your master

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of the universe says the word annuity,

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just say, "Listen, master of the

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universe." Stan the annuity man says,

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"Hey, there's more than one. Just that

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there's seven different types of

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annuities or more. Which one are you

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talking about, master of the universe?"

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First, when you say the word annuity,

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it's like saying restaurant. I love all

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restaurants. That's crazy, right? I hate

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all restaurants. That's crazy, too. I

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hate all annuities. Even more crazy. So,

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is your annuity better than a pension?

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Only you can decide what the money is,

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what what you're trying to do with the

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money, what the goal is with the money.

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And if it's a pension, then let's go

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shop all carriers for the highest

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contractual guarantee for your specific

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situation. And buying annuities of any

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type is like buying a plane ticket.

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They're commodity products. You have to

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shop all carriers for the highest

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contractual guarantee for your specific

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situation. So, let's take an example. I

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got a call the other day and the person

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was wanting to put in a pension

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guarantee uh using an annuity and

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annuity types. And there's there's four

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different lifetime income types. SPIA,

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single premium immediate annuities, DAS,

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deferred income annuities, QLAX,

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qualified longevity annuity contracts.

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And then there's it's not an annuity,

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but it's an attachment to an annuity

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called an income writer, which is also a

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pension guarantee. And the question was,

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Stan the annuity man, America's annuity

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agent. Which one of those lifetime

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income guarantees gives me the most

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control? Because I'm a control freak,

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Stan. I want to control the asset. I do

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not want to give up any control. I do

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not want to anuatize an annuitize in

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southern speak is you know you got the

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water spet outside you rip the the the f

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the knob off the water faucet and the

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water just flows in this case anization

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spds and kilax that's annutization the

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income's going to flow it's going to

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flow there's no off switch off switch is

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death and that's not a good strategy by

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the way so so the answer to this

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gentleman's question was you're a

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control freak you want a lifetime income

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stream you want to control it from from

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the start to finish income writers

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give you the most control even though

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it's a guaranteed lifetime income

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pension as long as you are

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breathing. That doesn't make income

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writers better than immediate annuities

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or deferred income annuities or

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qualified longevity annuity contracts.

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But the specific question was to stand

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the annuity man America's annuity agent.

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Which one gives you the most control?

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It's income writers. Now, income writers

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can be attached to variable annuities at

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the time of application or index

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annuities at the time of application and

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in some cases multi-year guarantee

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annuities at the time of application.

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Let me do kind of a a basic visual. If

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you draw a line down a blank sheet of

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paper, okay, accumulation value, this is

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my lefth hand side, your right hand

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side, that's that's the with variable

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annuities, that's the mutual fund,

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separate accounts, with index annuities,

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that's the call options and migas,

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that's the interest rate. On this side

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is the income writer. Once again, draw a

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line down a blank blank sheet of paper.

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The this side, my right, your left, is

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the income writer. It's the contractual

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guaranteed lifetime income pension

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amount

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that you can turn on when whenever you

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want to turn it on. You can turn on one

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year or immediately or 10 years or seven

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years. And one of the things I'm going

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to ask you as we get deeper into the

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income writer discussion, if that's what

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you want, if you want to control that

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asset yet have a pension, is when do you

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want to what's the projected time you're

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going to turn on that income stream? And

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based upon that answer, we're going to

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shop all carriers for the highest

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contractual guarantee. If you give me a

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range, if you say, "Yeah, I don't know.

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It's between five and seven years."

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We'll quote five year, six year, and

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sevenyear deferral. And then choose an

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income writer that's competitive in all

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three of those tanches. But the bottom

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line is that you can control that income

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writer guarantee, that pension

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guarantee. Let me give you an example.

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If you bought an indexed annuity, which

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is a great and efficient and

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cost-effective delivery system for an

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income writer for future pension income

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needs, and you bought it and say 10

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years later you didn't need the income

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writer, you don't need the lifetime

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income stream, then you can get all your

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money back. If it's a 10ear surrender

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charge type product with an index

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annuity, you can get the accumulation

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value back. That's called controlling

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the asset. And that was the question

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this gentleman had to me. So just put in

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the back of your head, lifetime income

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doesn't always mean irrevocable. And

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irrevocable isn't bad, but you can get a

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lifetime income stream and have full

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control. It's called an income writer.

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So getting back to that really weird

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question that we started this whole

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thing off with is is an annuity better

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than a pension? An annuity is a pension.

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An annuity doesn't have to be a pension.

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It comes down to what you want the money

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to do. I encourage you to hit the

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subscribe button, go to my site, use my

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proprietary um retirement calculator,

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Speedia, QAC, Income Writer. They are

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fantastic. Get my book, schedule a call,

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do the whole thing because I'm out here

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trying to educate and help you make a

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good decision. Hey, with that being

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said, hit the subscribe button, you

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know, share it with your friends and not

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friends, and I'll see you on the next

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Stan the Annuity Man YouTube video.

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Heat.

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Heat.

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[Applause]