Are Fixed Index Annuities A Good Investment?

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Hi there, Stan the Annuity Man, America's annuity agent, licensed in all 50 states. Big C behind the

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camera is like, "Coming on the shirt." What I didn't show him was the back. So this is

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obviously Stan, right? Let's do the back. Okay. You can handle the annuity truth. Big C and

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Dr. V. So that's the— what is that? A Few Good Men. You can't handle the truth. You can. I mean,

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you need to. It's about retirement, right? It's about chapter 2 of your life,

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which leads us to the topic: Are fixed index annuities a good investment? Well,

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you need to know the answer to that because every single person that you run into— banker,

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advisor, IRA, broker— somehow, "Hey, I got this really good idea. It's called an index annuity." Wonder

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why. Wonder why. Wonder why. Really, you think it's that? You think it's commission?

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You might be right. We're going to cover all of that after this.

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So, are fixed index annuities a good investment? First of all, they're not an investment. They're

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a transfer of risk. Okay? Investments are market stuff. Okay? I guess a better question:

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Is it a good place to put your money? Which it really comes down to what your goals are. If

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your goals are market returns, the answer is no. If your goal is to mimic stock market returns,

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the answer is no. And if you're under the delusion from some sales pitch that, well,

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you can get market upside with no downside— you can protect the principle while still getting

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market returns. Okay. If I have to tell you that it sounds too good to be true,

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it is every single time. I'm going to smack you. Okay? Stop falling for this nonsense.

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Stop thinking that you found this product, this strategy, that your neighbor has it. Man, that

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sounds really good. I can't believe I found this. It's been around since 1995, player. Where have

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you been? And by the way, if it did provide market returns with no downside, what do you think?

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Everybody in the world would be buying index annuities— and they're not. Last time I checked,

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Goldman Sachs and Jamie Dimon at JPMorgan— they're not taking their institutional money and buying

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indexed annuities. Alright? They're not advising their top clients to buy indexed annuities.

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Unfortunately, index annuities have turned into this product that annuity agents prey on people

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that trust them and that aren't sophisticated in the markets or with investments in general.

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Let's talk about what a fixed index annuity is, and then you can make the determination if

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that's a good place to put your money. Now, full disclosure: We sell them, but we only sell them,

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at the time of this taping, with income riders attached to them. Income riders are contractual

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guaranteed lifetime income attachments that you can attach to an index annuity at the

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time of application for lifetime income. At the time of this taping, we do not recommend

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index annuities as a standalone for you to buy. Why? Because multi-year guarantee annuities,

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which are the annuity industry version of a CD, beat them— beat them historically from a return

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standpoint. And those returns are contractual. With index annuities, there's no guarantee of any

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return. What they do— meaning the life insurance companies that issue the index annuities— they have

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what's called an index option. So, in other words, let's just say you bought it on January 1st. The

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next January 1st, with most index annuities, you get to lock in the gains— just that one day.

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You're a slave to the day. The other 364 days, not much to do. And if anyone says, "You know

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what? I'll manage that index annuity for a fee." Get up, walk out. Okay? That's just garbage. Bring

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it. [email protected] if you want to be flayed like a flounder, factually, on that one. Okay.

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But they are a good place to put your money if lifetime income is the goal. Remember,

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there's two questions: What do you want the money to contractually do? When do you want

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those contractual guarantees to start? And if you say, "I need lifetime income

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for me and the spouse starting in maybe six years." Then it's an income rider attached to

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a fixed indexed annuity. Drawing a line down the blank sheet of paper visually:

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indexed annuity over here, income rider over here— two separate calculations. We're only

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focused on the contractual guarantee. CD returns, CD returns, CD returns if you're

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lucky. CD returns, CD returns, CD returns if you're lucky, if the planets align themselves.

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So, are they a good "investment"? Are they a good place to put your money? You have to be

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specific with the goals that you're trying to achieve. Just don't say, "Well, I just want

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a reasonable rate of return, Stan. That's all I want." Then don't buy it. Okay? Because you're

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not going to get that. Because most of you think reasonable is 8 to 9%. Listen, if you could get

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8 to 9% every single year, they'll build a statue of you on Wall Street. And don't come back, "Why,

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I've been getting that for 35 years." Then why are you watching the video, player, gecko?

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Do not fall for the too-good-to-be-true sales pitch. Like, "Well, you get an upfront bonus." Candy

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for the stupid. "And you get market upside with no downside." Ridiculous. "And you get free long-term

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care." Impossible, because long-term care is a health insurance product. So I've just taken a

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big, fat, juicy dump on that sales pitch. I want you to envision that. It's not pretty,

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but that's what I just did because that's what it is. It's crapola. Alright.

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I'm hoping somehow that the index annuity sales pitch machine and army that's out there gets put

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in their right place and they stop allowing this to happen. They meaning the annuity industry. If

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I was czar for the day, it'd be cleaned up pretty darn quick. But do we sell a bunch of

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index annuities with income riders on top of them? Probably more than most. I'm the number

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one agent in the country. Period. It's not even close. So, yes, we sell them appropriately when

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the income rider is attached, but we don't look at the index side. We don't look at the caps,

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the spreads, the participation rates. On that side of the ledger, there's over 800 currently,

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at the time of this taping— 800 index options to choose from. Guess what? Every single one

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of them— every single one of them— designed to create CD-type return. Why? Because in 1995,

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index annuities were put on the planet for CD-type returns and the hope of a little bit better than

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CD-type returns. But don't buy hope. Don't buy hope with annuities. Don't buy hope with index

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annuities. Buy contractual guarantees. Own them for what they will do, not what they might do.

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And I encourage you, if you don't believe me or if you want to just get educated,

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go to my site. You can schedule a call with one of my team members. You can send me an email,

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[email protected], and I will walk you off the index annuity cliff— factually.

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Or you can just download the index annuity owner's manual. It's like 70, 80 pages of facts.

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I actually go into caps and spreads and all that stuff just so that you understand it. But they're

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complicated. Remember, if you cannot explain the annuity that you're considering to purchase to

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a nine-year-old— no offense to nine-year-olds— then never buy it. That's it. If you cannot explain— if

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you can't get off the phone and then walk over to your spouse and go, "This is what we're doing.

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This is how it works. These are the contractual guarantees." If you have to start saying, "Well,

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it's got a cap and it's got a spread and it's got a participation rate." If you have to do that,

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stop. Just stop. You're not smarter than the next guy. These things have been around since 1995.

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My hope— my hope, if there is hope, there is hope— Big C behind the camera— is that there

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will be index annuities that, the accumulation value, in my opinion, are pro-consumer. At this

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point, I haven't seen it yet because the annuity companies can change the rules without talking

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to me, and for me trying to protect the consumer, that doesn't fly. So we look at the income rider

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contractual guarantee. Be careful out there. This is index annuity season. It's not spring. It's

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index annuity sales pitch season. Be careful. Call us first. Run it by us before you buy the dream.

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Because if you buy the dream, you're going to end up owning the contractual realities.

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My name is Stan the Annuity Man. Oh, stop, stop. See? Don't. Stop.

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You got— okay. I forgot. Forgot I was on such a roll. I was like— you know,

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I was like butter. You know what butter is? It's on a roll. Up here is the countdown clock to,

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like, I did a video on lifetime income and how it's priced. It's not priced on interest

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rates. It's priced on life expectancy. And I go through how the life insurance company does

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that. That's very important because right now, at the time of this taping, lifetime income is

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a bargain because AI— that would be artificial intelligence for all you out there— is going to

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lengthen out those life expectancies. So tables right now that you can lock in— they're a bargain.

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My name is Stan the Annuity Man. See you next time.