Are Fixed Annuities A Good Investment?

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Are fixed annuities a good investment? Boy, is that a loaded question.

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Hi there. My name is Stan the Annuity Man, America's annuity agent, licensed in all 50

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states and Puerto Rico. Behind the camera, Big C was talking about my shirt and blah,

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blah, blah. So, I'm going to kind of step back without losing where I'm standing.

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Annuity World Tour. There was a time I was young and vibrant,

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and I traveled the country and gave speeches and all kinds of stuff. Maybe that'll happen

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again. I don't know. It depends on how much money people are wanting to pay me to do it

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because I ain't doing it for free, okay? There's a cost, especially at this age.

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So, we're going to talk about if annuities are a good investment, as only I can break that down

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because that is a loaded question that you should only ask me. And I'll talk about that after this.

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All right. Are annuities a good investment? First of all, I'm glad the question was annuities

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because there are a lot of people out there, including a lot of financial journalists, that go,

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“Well, I don't know about annuities because when you die, the annuity company keeps the money.”

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I mean, there are at least eight types of annuities. The financial journalist

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people that should know better— I was going to call them a name, but that wasn't going

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to be good— they need to know that, you know, immediate annuity is what they're talking about,

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life only. But you can structure it a myriad of ways so that the evil annuity company doesn't

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keep the money, period, and they're on the hook to pay as long as you live.

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But that misconception proliferates the fruited plain, as they say, Dr. C, behind the camera.

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But the thing that bothers me a little bit about this question,

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“Are annuities a good investment?”— I don't think they're investments at all. They're contracts.

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They're transfer-of-risk contracts that you buy for the contractual guarantees of the policy.

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In other words, buy the Armageddon. Don't buy the birds chasing the flowers. Don't buy that part

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that you're going to hear at the bad chicken, expensive steak dinner seminar where they go,

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“Well, you don't own this one, son. You got a bonus upfront.”

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And I saw a bonus the other day, by the way, of 50%. And I know you're saying,

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“Well, tell me about that one, son. That sounds pretty darn good.”

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You can't be that stupid. Please tell me you're not that stupid. Please tell me

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you're not that dumb. You might be, because if you fall for that one, then don't go to Vegas,

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okay? Because they're waiting for you there. You know, as they say, if you don't know who

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the sucker is at the table, it's you. Annuities are transfer-risk products.

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You ask two questions when you want to consider buying annuities:

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What do you want the money to contractually do?

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And when do you want those contractual guarantees to start? That's it.

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There's an acronym that I've come up with called PILL that explains the four primary things that

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annuities contractually solve for. P stands for principal protection.

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I stands for income for life. L stands for legacy.

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The other L stands for long-term care. I get a lot of hate mail, and I love it.

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Bring it. [email protected] from, you know, the Johnny Appleseed agents that say, “Well,

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I think it's a market growth product, son.” My opinion, having worked for Dean Witter,

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Paine Webber, UBS, and Morgan Stanley, so I know what I'm talking about: if you want market growth,

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don't do annuities. Do annuities for the contractual guarantees of the policy.

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Never buy based upon a hypothetical, theoretical, projected, or back-tested illustration. If you're

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doing that, then you get what you deserve. Every single week, I'm available to you if

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you want to talk to me. I get emails and calls from people that say, “Well, you were right about

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that. You know, I bought that index annuity, and they promised me 7 to 9%, and I'm getting like two.”

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Well, it's too late now. You're two years into it. There's a nine-year surrender charge.

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So you might want to listen to me now. Don't think that you're the person on

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your street that's figured it out and got a product that nobody else has.

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“Boy, you know what? I'm smarter than Jim. I went to that seminar, put all my

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money in that thing, gonna get a bonus.” Listen, you just got taken advantage of.

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Alright? Index annuities and RILAs, the brokerage form of index annuities— and by the way,

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I had that securities license forever don't need it— because there's not a product out there,

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including RILAs, that makes me want to go get it. If you want stock market returns, stock market

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growth, real upside, then don't do annuities. Annuities are contracts.

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So, are they a good investment? They're not investments.

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You're transferring the risk for principal protection. You're transferring the risk to the

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life insurance company that issues the annuities for lifetime income as long as you're breathing.

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You're transferring the risk for legacy. You're transferring the risk for long-term care.

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You're transferring the risk. Investments— you’re shouldering the risk.

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Annuities— you’re transferring the risk. So, the question just foundationally is

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off. You should be asking yourself, “Where do I need to transfer risk?”

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You know, Warren Buffett said, “Never lose money.” Rule number one. Rule number two,

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don't forget rule number one. If that's you, then that's a MYGA.

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That's a multi-year guarantee annuity. Now, we currently use index annuities for

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income riders to deliver lifetime income at a future date. But if you're saying,

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“I just want principal protection or return,” MYGAs are going to beat them right now.

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And the agent doesn't get paid as much. And by the way, commissions for agents

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are built into the product. You never see them. But the more complex the product,

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the higher the commissions. This is common sense. I would tell you, if you're asking that question,

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“Are annuities good investments?” I would first say, “Alright, let's put on your

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common-sense hat as we go look at annuities.” I would encourage you to go to my site at

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theannuityman.com. I've written six owner's manuals on index annuities,

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MYGAs, income riders attached. I've written a book on income riders, QLACs, DIAs, and SPIAs.

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So, I got six owner's manuals. I wrote a book called The Annuity Stanifesto early in my life

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when I didn't have gray hair, that was really, really detailed about the annuity industry and

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how to use contractual guarantees in your favor. You can go to my site and run quotes 24/7/365.

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I've done a few of these videos. I do one a day. You're saying, “There's no way, Stan.”

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There is a way. You know, I'm at the

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nondescript location doing videos right now. We do bunches of them, and I release one every

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single day. Why? Because I want to suffocate the bad sales pitches that are out there.

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My mission in life after doing this for over three decades— it's not a money thing anymore.

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It's a game-on, annuity-game-on issue. I want to squash all this BS out there.

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I want to squash it at the local level first. Then I want to squash it at the

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regional level. And then I'm going to squash it and continue dominating at the national level.

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Licensed in all 50 states and Puerto Rico. Annuities are not investments.

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The reason that brokerage firms and most IRAs don't want to deal with

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annuities is because they can't morally, ethically, and fiduciary-wrap it with a

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fee. And it's all about wrapping it with a fee. And anyone that wants to wrap an annuity with

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a fee— get up and run out. That's a joke. That's an absolute joke.

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So, are annuities a good investment? No. Annuities are good transfer-of-risk strategies.

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You transfer the risk. So, the question is:

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What risk do you need to transfer? Do you need to transfer and buy another

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lifetime annuity like you have with Social Security or, if you're so fortunate, a pension?

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Do you want to add to the money on those two things in addition to RMDs that you're getting?

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What is your income floor? That is a transfer of risk for lifetime income.

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You say, “What do you mean by that?” Well, I don't know the return on

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investment until you die. And once again, I will come

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to your funeral freestyle rapping and/or sing. And I do play a little Ming Flying V guitar and,

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you know, Marshall stack. We'll do the whole thing. If you want me to do ROI, but

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I can't do that until your funeral, and you better serve lasagna. Because I love lasagna.

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That's the only time I get to eat it. So, annuities are not investments.

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Annuities are transfer-risk strategies and a contract between you and the issuing life insurance company.

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Got me?

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I know that's not what you're going to hear, but this is the truth right here. This is

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what they call evergreen content. This will survive after the nuclear war. People will

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pull this up and go, “Yep, annuities are transfer risk. They're not investments.”

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Hey, do me a favor. I do a few videos, and above me, spinning clock, there's a video I did that's

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going to be controversial, it's already been controversial since I've been talking about it.

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But I wanted to do a video specifically on it for my YouTubers, YouTubians out there,

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it's on artificial intelligence and how artificial intelligence— AI— will

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change the game in the annuity industry. Remember, I'm not political, I'm contractual.

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And there's talk right now of me running in 2028 under the

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“Contractual Guarantees Only” mantra and party. It'd be fun. I mean, wouldn't it be fun to have

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me on the debate stage at least? I don't think the press

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would be ready for that. But you never know what happens. You know, I take one day at a time.

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Life is good. My name is Stan the Annuity Man.

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Might be on tour soon in a city and town near you. See you next time.