Do Fixed Annuities Provide Compound Interest?

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Hi there, Stan the Annuity Man, America's annuity agent licensed in all 50 states. You're saying,

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Stan, Stan, I've heard of a manifesto. But what is a Stanifesto? That's my first book. First book

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on Amazon, Stan the Annuity Man Stanifesto, where I kind of vomited everything I knew at the time,

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which was a ton. But after that, I've also written a lot of owners manuals

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that you can get for free on my site. And I think if you email me [email protected],

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I think there's some signed copies of the Stanifesto. And on the front is me, and a vibrant

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young— I think I was in my late 40s. Big C behind the camera, I know you're saying, man,

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that must have been incredible to— I mean, yes, there's no gray hair. I was actually wearing

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a suit. I had yet to transition to— I saw all the suits from Morgan Stanley and Paine Webber and Dean

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Witter and all that stuff. Today's topic is a good one. Do fixed annuities provide compound interest?

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Going to answer that question in a very straightforward fashion after this.

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So, annuities and compound interest, I think what we're talking about primarily are MYGAs, multi-year

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guarantee annuities. That's the annuity industry's version of a fixed of a CD. It's a fixed annuity.

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It has full principle protection, no annual fees, no market attachments, no moving parts,

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just a guaranteed rate for a specific period of time. If you go to my site, you can pull up the

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best MYGA rates for your specific state. We're licensed in all 50 states and Puerto Rico. So, you

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can see what is out there and what you can lock in. And typically with MYGAs, you

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can do one year, two year, three year, four year, five year, six year, all the way out to ten year.

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And that's an interest rate that you're locking in contractually. The vast majority of those

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MYGA rates are compound interest. Now, you can use MYGAs inside of Roth IRAs, Regular IRAs,

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Traditional IRAs, Non-IRAs, or checking account type money. They can be placed anywhere.

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And regardless, and let's just look, they're compound interest, 99% of them.

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But let's just say in a Non-IRA account, checking account type money, money market account

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type money, you can buy a MYGA and have the interest grow and compound tax-deferred. Now, you're going

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to have to pay taxes once you eventually cash it out, but you can, you know, someone asked me the

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other day, "Hey, can I just roll these MYGAs forever and then have my beneficiaries worry about the

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taxes?" Yeah, you can. That's just passing the compound interest buck to your beneficiaries,

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and they'll get over it. Well, I don't know if that's a good thing for them. Screw them.

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You've been taking care of them your whole life. You know, my daughter's going to have to deal

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some things because, you know, I'm not going to do everything. I say that, but I probably will. But

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the point is it's compound interest. Now, there are some companies out there that have MYGAs,

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multi-year guarantee annuities, with simple interest, but we will point that out to you.

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And a lot of times it looks like a higher interest rate, but it's simple interest. So, if you really

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run the numbers, the compounding numbers are a better contractual deal for you. But I'd say

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about four years ago, a lot of the companies were playing games like that, and they were doing

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simple interest instead of compound. And I would call them up. I'm like, lawyer up, player, because

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these people are being solved not by us. Of course, we're telling the truth, but a lot of

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agents don't even know compound from simple. So, you're getting this higher interest

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rate. Well, it's simple interest. Okay? What's compound? Somebody called compound interest, like,

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the eighth wonder of the world. Yeah. I mean, it truly is. And in the annuity industry,

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the cool part is in a Non-IRA account, you can have money grow and compound tax-deferred,

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which is pretty cool. Especially in the confiscatory— is that the word? Is that the word?

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You know what I'm saying. They're coming and getting it. Your money from a tax standpoint.

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You can just keep pushing the tax puck down the ice. Hockey analogy. So you're saying,

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"Wait a minute, Stan. What if the government comes in and then says, 'Well, that compound interest,

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that's no more. We're not allowing that.'" Good luck with that. There's not a politician

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that's going to step on that rail because the life insurance lobby, they are the hammer

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in DC. It's not going to happen. I mean, tax deferral is not going anywhere. And if it does,

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boy, we are in some serious straits at that point in time. I'll tell you, if that happens,

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all bets are off. But it could happen. I mean, we're in a stage right now in the

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country where people without money are voting for people that have the money. They're vote not

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for them. They're voting for their money. They want to get their money, confiscate their money,

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tax their money. It's common. There's nothing that people that's worked hard and scrimped and saved

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and done it the right way, there's nothing you can do. You can't hide. All you can do is play by the

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current rules. And the current rules are compound interest is tax-deferred in a Non-IRA account

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using multi-year guarantee annuities. Now, a lot of you out there going,

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"Wait a minute. You hadn't really talked about index annuities. Unless this boy down the road,

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man, he telling me this right now. You can get lots of good return on index annuities."

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Please, please, please, please don't fall for those sales pitches. Please buy contractual

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guarantees. There's no guaranteed return on indexed annuities unless you choose what's called

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the declared rate, which is very, very, very low. All of the spreads, caps, and participation rates

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that you being pitched, those aren't guaranteed returns. Those are maybes.

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In my world, there is no maybes with annuities. There's guarantees with annuities.

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Okay? Just remember that. Don't fall for any of that. Well, this is a better deal, and this one's

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going to compound at a much higher rate because of the index. No, there's no guarantee there. And

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with index annuity returns, they typically go in this sequence. You know, 6%, 4%, 0, 0, 2, 3, 7. That's

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typically how it works. RILAs as well. Registered index-linked annuities, same thing.

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Okay? If you want growth, go get market growth. If you want growth, don't buy an annuity. If you want

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contractual guarantees, buy the contractual guarantees of the policy. Because

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if you buy hopes and dreams, you're going to own the contractual guarantees. You're going to find

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that out, that the hopes and dreams that were sold never come true. Never, ever, ever come true.

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So, compound interest, yes, absolutely. All day long with multi-year guarantee annuities.

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All day long. Okay? That's real yield. I'm going to go in the weeds a little bit here.

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Income Rider rollup rates, that's not real yield. So, we're not talking— that's the reason

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we're not talking about that. That's monopoly money that can only be used for lifetime income

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guarantee calculations. That's not real yield. So, Johnny Appleseed says get a 20% bonus and

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8% compounded. That's not real money. MYGAs, multi-year guarantee annuities, real money,

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real yield, real interest rates, okay? That can compound, or you can take out that interest if you

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want. It's your call. You know, it depends on the carry, depends on the specific MYGA. But remember,

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typically three years and out, MYGAs beat CDs historically. Okay?

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So I hope that answers the question. Go to my site at theannuityman.com, and there's a live MYGA feed.

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You just put in your state of residence and then the duration, and poof, up it comes. And then

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we're going to advise you if we— we're going to show all carriers, then we're going to advise you

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if we're recommending those specific carriers. Some we are, some we aren't. We have our own

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risk mitigation group that determines what we're looking at. If it's A+ or better,

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we're recommending it. Anything below that, I'm taking a case-by-case basis, especially with MYGAs.

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Hey, do me a favor. Above me, spinning clock is a video I did on lifetime income. You need to take

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a look at that if you're looking at building your income floor, adding to the annuity you already

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have, which is Social Security, you know, getting beefing up that money that's coming in every

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single month. That video will explain how it all works and how it all is priced. There's

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a lot of misconceptions out there, not only by the consumers, but a lot of the agents don't know. So,

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if you're an agent watching this, A, I don't know why you're watching this because I'm not going to

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hire you, but B, you might learn something since you're here, do that. But if you're consent,

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it's made for the consumer. So, please take a look at that and shoot me an email if you want to

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send— I think we have a few Stanifesto. I think we have, like, a hundred copies left. They were going like

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hotcakes a long time ago, but I had fun writing it a long time ago, but I now I'm writing these

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owners manuals. And by the way, I'm doing a video every day until I drop dead. So, look for it.

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Every Monday through Sunday, there's a video. I think it drops at the same time every single day

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of me talking about annuities and educating you and edutainment, have making it a little

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bit of fun and a very boring topic, but a topic that you need to understand because it

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might help you with chapter 2 of your life. My name is Stan the Annuity Man. See you next time.