Are Annuities Good for Young People?

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Welcome to Q&A Friday. I am Stan the

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Annuity Man, America's annuity agent,

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licensed in all 50 states. Not 48, not

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53, all 50 states. Today's question is a

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good one. Pay attention. Should a young

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person buy an annuity?

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In other words, should that youngster

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buy an annuity? Should I buy one for the

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grandchild or the daughter or the son or

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the son-in-law, etc.?

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So, let's define young right now.

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Typically, if you're less than 50 years

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old, when you talk to us, you're going

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to have to give us a really, really,

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really, really, really, really, really

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good reason why you're looking at

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annuities. If you're 20, 30, 40 years

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old, please don't buy any annuity type.

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and anybody that's trying to sell you

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one needs to make a car payment.

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Okay, there's some tax issues with

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taking money out of deferred income

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deferred annuities

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um like a MA or index annuity or

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variable annuity pre-59 and a half that

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are they're ugly. They're IRS penalties.

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But even if there were not IRS

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penalties, if you're young, you need

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growth. You need market growth. You do

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not need to buy an annuity product. I

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don't care what any agent or advisor is

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trying to sell you and you're a

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youngster, walk away. Go to the markets.

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You need real growth. And annuities as a

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category, and there's many different

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types of annuities, they are not market

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growth products. Listen to me.

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I get calls every week and my team gets

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calls every week and we're starting to

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track them now. How many 30 year olds

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and 40 year olds are trying to be sold

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annuities, deferred annuities, index

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annuities, variable annuities, whatever,

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rias, whatever. Unbelievable. We're

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we're like flabbergasted like what in

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the world's going on? I know that too

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many agents and advisors are hammers

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looking for nails. I don't care if

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you're breathing or not, they're going

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to try to sell you an annuity. But

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there's just there's just a handful of

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cases where an annuity for someone young

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would make sense. Let me give you an

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example or examples of that. when

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someone gets in a in an accident. Um

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there was, you know, recently locally

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here, there was a young girl that was in

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a accident with with in a pool and they

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sued the pool company or whoever and the

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judge that the case went in front of,

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they awarded a settlement and that

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settlement was an annuity payment for

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for the girl that was injured. That

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happens with with most, you know,

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personal injury type stuff. You know,

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the settlement is an annuity type

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payment. Okay, that makes sense. Okay,

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that makes sense. The other way that

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I've seen it done is the grandfather

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that wants to set up a lifetime income

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stream with their greatgrandson or

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grandson, they'll do a a joint lifetime

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income annuity

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with him knowing that that payment is

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going to be based on that younger son.

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But you have to really convince me why

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you're doing that. I call that stratey

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strategy the legacy income monster. But

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what I'm talking about today and the

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question I'm answering today, should a

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young person buy an annuity? Is really

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addressing not those anomaly asked

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anomaly or asterisk special situations

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one out of 10,000. I'm not talking about

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that. There are specific times that that

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works and I've given you a couple of

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examples.

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What I'm talking about is the

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20-year-old or the 30-year-old or the

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40year-old that's being pitched packaged

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annuity products at the bad chicken

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dinner seminar or online or whatever.

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Ridiculous garbage. Okay, you should

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never do that. And you're talk I mean

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talking to I hope you do, but you're

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listening to and viewing the top agent

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in the country licensed in all 50

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states. I could sell anything to anyone

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if it's suitable and I deem it suitable

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and appropriate. But when you're that

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young, you need to be exposed to market

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growth. Unlimited upside, no packaging,

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no surrender charges, no no hidden fees,

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got you fees, all that stuff. You need

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market grow. So for all you youngsters

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out there, you can call me. I get, you

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know, when when I get on the phone and I

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do get calls occasionally I'll get I got

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one today. Guy was um I think he was 49,

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his wife was 43 and someone was trying

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to sell him an index annuity. I'm like,

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"What's the goal?" And he told me the

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goal. I said, "That's not it." Okay. He

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said, "Market growth." I went, "That

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ain't it. Don't buy it." I don't care

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what the person says, shows you, or

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promises you. Never buy an annuity for a

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hypothetical non-g guaranteed return.

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Always buy an annuity of any type for

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the contractual guarantee. What it will

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do, not what it might do. Never buy an

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annuity for what it might do, what it

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could do, what it should do, what it can

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do, what it did do for my uncle Bob when

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he owned it 20 years ago. Sure. No, you

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buy it for what it will do. The

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contractual guarantees.

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Okay. But when you're young, 20, 30s,

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40s, you should be looking for unlimited

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upside. You have the time frame to go up

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and down with markets. You need to set

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it and forget it as they say. But once

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you hit 50, we can start talking. When

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you turn 50 and have the party and Van

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Halen, current lineup plays there at

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your party. The day after, call me. Say,

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"Stan, I'm 50. Let's talk." And even

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then, I might say, "You're too young."

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depending on the goals. But do not I'm

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hoping this gets to the people out there

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that are being pitched by the

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challenged advisors trying to fit a

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square peg into a round hole selling

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this to young people. Young people need

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market growth and annuities. No, no, no,

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no, no. They're transfer of risk

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contractual guarantees. Got it? Good. My

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name is Stan the Annuity Man. That was a

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riveting Q&A Friday. Seize the weekend.

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Have fun. Don't watch television. Get

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outside. Exercise. Walk. Television.

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Kill the TV. Shut the TV off. And with

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that, have a great weekend. See you next

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week.