Are Fixed Annuities A Good Investment?

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Hi there, Stan the Annuity Man. America's Annuity Agent licensed in all 50 states and Puerto Rico. Today's topic is a good one. Are fixed annuities a good investment? Pretty broad, but I'm going to give you an answer that is factual, but probably not one you're expecting after this.

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>> [music] >> So, when you you say fixed annuities,

0:26How Fixed Annuities Are Regulated

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that's a pretty broad topic. First of all, fixed annuities are regulated at the state level. So, National Association of Insurance Commissioners, they're overseeing each state has a commissioner of financial regulation, insurance, etc. They oversee and approve all annuities

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that are sold in that state. There are many types of fixed annuities.

0:51Different Types of Fixed Annuities

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There's multi-year guarantee annuities, the annuity industry version of a CD. There's a fixed index annuity, which is very complicated CD. There's QLACs for income in an IRA. There's deferred income annuities, there's immediate annuities. Um there's a lot. There's a ton.

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But, here here's where I'm going to pivot a little bit. Fixed in fixed annuities as a whole, so MYGAs, SPIAs, QLACs, index annuities,

1:24What Fixed Annuities Really Are

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fixed annuities are not an investment. They're transfer of risk contracts. You're transferring the risk to the life insurance company that's issuing the annuity to solve for four things, contractually. I come up with an acronym, easy to understand and remember, PILL. P stands

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for principal protection, I stands for income for life, L stands for legacy, the other L stands for long-term care. That's it. That's what they solve for, contractually. Never buy an annuity for growth. Never buy an annuity for potential. Never buy an annuity for back tested returns.

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Never a buy an annuity for hypothetical returns, non-guaranteed returns. Buy them for the guarantees. If you buy the dream, you're going to own the contractual realities.

2:09Key Questions To Ask

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So, are they a good place for your money from a transfer risk strategy? That's answered by two questions that I came up with. Number one, what do you want the money to contractually do? Number two, when do you want those contractual guarantees to start?

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From those two answers, we can determine A, if you don't need an annuity and we will tell you that. And B, if you do need an annuity in our opinion, kind of taking a fiduciary approach, putting your best interest at at hand, we're going to tell you the annuity

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types or type that provides the highest number, the highest contractual guarantee number. For lifetime income, it's A plus or better. We don't care about the logo, the name, where they're located, the product name, could care less. There's sites that they're doing, you

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know, showing brochures and who cares? These are commodity products. You shop them all for the highest contractual guarantee for your specific situation. For lifetime income, it's A plus or better. MYG is we can do a little bit lower on the guarantee because we're dating that

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carrier for that term. For lifetime income, we're going to marry them forever. So, they have to be A plus or better. So, the question was,

3:25Why Fixed Annuities Are NOT Investments

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are fixed annuities a good investment? Number one, they're not an investment, they're contracts. Number two, you're transferring the risk with those contracts to solve for something specific. Investments are non-annuities. Stocks, bonds, crypto, ETFs, whatever.

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Whatever your poison is out there. They're not investments. Never have been, never will be. And once you cross the line to thinking they are is when you make mistakes. Once you cross the line to thinking they're investments and they're kind of like the market, they're kind of like real

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growth, that's when you're getting ready to sign the paperwork and make a mistake. They're contracts. When someone talks about upfront bonuses, it's part of the contract. Who cares? There's not There's There's 100 pennies in the dollar. No one's giving

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away money. Be smart. So, going into

4:17How To Build Your Income Floor

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chapter two your life with what? 15,000 people turn 65 every single day looking for guarantees in a world where there's only 9% of the companies that offer pensions, you got to create pensions. You got to create what I call your income floor. That's the income hitting your bank

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account every single day. All of you own the best inflation annuity on the planet, which is also a fixed annuity. It's called Social Security. But think about your income floor, all the money hitting your account, dividend stocks, whatever. What's the addition you might need?

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That's when annuity comes in. Or you say, "Stan, I don't need lifetime income. I just want to protect the principal." Great. Multi-year guaranteed annuities. Most agents and advisors advisors will try to sell you index annuity, but again, index annuity returns are not

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guaranteed. MYGAs are guaranteed. The annuity industry version of a CD. I call them annuity bonds. Guaranteed interest rate for specific period of time that you choose. Don't make it difficult. Don't cross the

5:17Important Advice About Investments & Annuities

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line. Let's put the line here. Investments on this side, contractual guarantees on this side, okay? Annuities. Non-annuities. So, when you use the word investment, non-annuities. Use the word contract, annuities. If you buy the annuity for what it will

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do, not what it might do, the contractual guarantees, you're going to be happy. If you cross the line and buy it for potential, you're not going to like it. There might be anomalies out there. I get emails occasionally where well, kind of worked for me. Great. You're one out

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of a grillian. I've told index annuity people for the longest time, all these hypotheticals and back testing numbers, send me and I say this, no one's ever sent it to me. Send me the hypothetical that you ran for someone 10 years ago and it worked either the same or better. Never

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received it. Think about that. Are fixed annuities an investment? No, fixed annuities are contracts. You have to think to yourself going into chapter two, how much how much in contractual guarantee should I have? How much in non-contractual guarantee should I have?

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How much in the investment side should I have? How much in the non-investment contractual guarantee side should I have? There's no overlap. That's where the sales pitch comes in. They want to overlap it. They want to blend the guarantees with market return.

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No. No. And I know what I'm talking about. I was with Morgan Stanley Dean Witter Paine Webber UBS. I know the growth side over there. Been did that did that a high level for a long time. So when I got out here to the annuity industry to dominate as I have as the

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number one agent cuz someone needed to say what I'm saying, I could not believe the blending of the lines. People calling them investments. I'm like, wait a minute. They're not investments because every single policy that we that we get done for the clients, that's a contract.

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It's a contract. Give me a break. So don't get confused out there. Don't let the lines be blurred. Do me a

7:29Next Steps and Helpful Resources

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favor. Go to my site. I've written on all fixed annuities. I've written owner's manuals you can download for free. They're quick and easy reads. You can also go to my YouTube channel and type in which annuity type that you want to go down the rabbit hole and and really

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learn about, you can email me Stan The Annuity Man. I will answer the email or you can schedule a call. We are available. We want to earn your business. We want to be part of that conversation. I have a full team in Las Vegas, Nevada headquarters. We're open 12 hours a day.

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8:30 in the morning to 8:30 at night, 5 days a week. Um 9:00 to 5:00 on on uh Saturday. 68 hours a week. Nobody's even close. Nobody's even close to our staff. Nobody's close to our hours. Nobody's close to anything. No shade against them. We're just pro-consumer. That's what we do.

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And I hire to make sure that people are going to be taken care of. Everybody in my office is licensed. They're just not on commission. We do it a different way. We do it the right way. Eventually, it'll be done this way. One last thing, above my head spinning clock, you'll see a video

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that I did on inflation and how annuities can factually, pragmatically, objectively, and contractually address inflation, the gorilla in the room. See, it's the only way. Anything else you hear is a sales pitch and non-guaranteed. This is a contractually

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guaranteed way to do it. My name is Stan The Annuity Man. See you next time.