Does the 4% Rule for Retirement Income Still Work?

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Hi there, Stan the Annuity Man,

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America's annuity agent, licensed in all

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50 states. Glad you joined me today for

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a topic that is needed to be addressed.

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Is does the 4% rule still work for

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retirement income planning? We're going

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to talk about the 4% rule. We're going

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to talk about very very smart people

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that has factually and academically is

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that academically destroyed it. And I

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can do that because I used to be on that

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side of the table. I know you're saying,

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"Stan, what are you talking about? You

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you wear the the Stan the Annuity Man

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logos, the hats, the whole thing. I used

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to work I started with Dean Witter. Then

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I went to pay then it turned into Morgan

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Stanley. Then I went to Payne Weber and

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that turned into Union Bank of

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Switzerland known as UBS. Love all those

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firms. But I'm now in the contractually

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guaranteed only space. Will do not might

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do. But I was in the world of the 4%

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rule. I understood it. I was taught it.

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Um, I talked about it, but at the end of

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the day, I've got a different opinion

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from when I worked for those ivory tower

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firms all over this country, New York

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City and all over um, in my previous

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life before I became the mythical figure

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of Stan. Not mythical, it's actually

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real. Stan the annuity man. So, we're

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going to get into that 4% rule because

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you need to hear what I'm getting ready

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to say after this.

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[Music]

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Okay, so let's talk about what is the 4%

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rule. Stan, sounds good. Sounds

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interesting. Tell me more. Tell me more.

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As I said, was that Greece? Tell me

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more. Tell me more. Okay, let's talk

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about the 4% rule. In the world of

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stocks and ETFs and bonds and markets

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and all that stuff, what advisors are

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taught is don't buy an annuity. Don't

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buy a contractual guarantee. Don't buy

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something like that. Let me the advisor

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manage it. Let me manage it because I'm

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master of the universe. And we'll just

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peel off 4% of the gains for the income

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that you need, sir. And that, you know,

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they'll run Monte Carlos simulations.

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No, that's not the race car. That's

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showing you, well, you know, we ran a

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thousand Monte Carlo simulations showing

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markets and blah blah blah, and this is

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how it's going to work. Life doesn't

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work that way. I mean that's like

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showing me a exercise plan. I got to

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implement the exercise plan. That's not

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going to happen either. The point is

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when you're coming toward retirement

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chapter two, you're, you know, three

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laps out of four, four being retirement,

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you're at three and a half. You're

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rounding the corner. You can see the

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finish line. The 4% rule works in a like

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a charm in a bull market. But when it

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doesn't work in is when it's choppy and

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there's things happening in the world

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that can make markets go up and down and

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you don't have time getting toward

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retirement in chapter two of your life

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to recover from a market loss. Period.

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Okay. Had a conversation today before

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the filming with a a person. He was

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talking about annuities. He said,

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"Should I own an annuity?" I said, "How

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old are you?" And he said, "He's in his

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40s." No, you shouldn't. You should you

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should own stocks and all those things

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and all the growth things because you

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have time for it to recover. The 4% rule

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in my opinion and I'm getting ready to

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tell you who else's opinion which

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matters is dead because of the

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volatility of the markets. If you have

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one or two years where you've lost a lot

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of money in the markets, the 4% rule is

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killing you because you got to take

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money out as you're losing

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money. Don't trust me on this. the smart

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people in the room with the ascots and

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and the got the jackets with the elbow

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protectors and they're in the ivory

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tower and really nice offices with the

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with a receptionist that brings them

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coffee every morning. Those people like

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Wade Fowl, okay, who's been on my Fun

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with Annuities podcast, PF AU, if you

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want to pull it up, he has factually

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destroyed the

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4% sales pitch, the 4% rule. He's like,

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does work. If you want to deep dive into

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and listen to the podcast and how he

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explains it, I would tell you to do that

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or buy his books. Wade Foul, go to

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Amazon, buy his books. The 4% rule is

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dead in my opinion and WDE's opinion and

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others

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opinion. You say, "But wait, but why why

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are why am I still hearing this? Why am

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I still hearing yes, the 4% rule works?"

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Still stick with the 4% rule. Think

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logically. the person managing your

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money is making a fee for managing the

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money, right? Makes sense. Nothing wrong

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with that if if it's up disclosed, etc.

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When annuities for lifetime income are

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put in place that replace the 4% rule,

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you cannot charge a fee on immediate

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annuity. You cannot charge a fee on a

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deferred income annuity, you cannot

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charge a fee on a qualified longevity

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annuity contract, you should never

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charge a fee on an income writer, and

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some people do. for lifetime income.

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Those are contractual guaranteed

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transfer of risk for as long as you are

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breathing. You do not charge fees on

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that. That's the reason that's not being

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recommended because those assets then

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are taken out of what they're charging a

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fee on. The other thing, and this

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nothing against, you know, the masters

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of the universe that are managing money.

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When you're in that world, you you

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believe that you know, you believe that

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you can do it. You believe that you are

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the man. You believe that you are the

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master of the universe. You have to

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believe it to go into it and to do it.

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And historically, there's arguments for

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it. There's aristo historically great

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returns in the stock market. Great

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returns. I have nothing against that.

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And you should keep some of the markets

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if that's what you want to do. But when

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you get to close to chapter two and

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retirement and go and and pivoting and

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going and doing your thing and taking

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care of yourself and taking risk off the

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table, to me, that's when you need to

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pivot away, fork in the road moment from

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the 4% rule and put that lifetime income

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guaranteed floor, that income floor in

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place to combine with the income you're

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getting from the other annuity that you

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own, which is social security, which is

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the best inflation annuity on the

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planet. And if your employer has

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provided you a pension, that's the

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second annuity that you have for

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lifetime income. Do not depend on the 4%

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rule. Here's another reason why. If you

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have the income floor in place

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contractually with lifetime income

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annuities, there's four different types.

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Immediate annuities, deferred income

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annuities, qualified longevity annuity

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contracts, income writers, and not just

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one annuity. I hate all annuities. And

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we can set it up so that 100% of any

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unused money goes to your beneficiaries,

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not the annuity company. So the annuity

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company not going to keep the money. I I

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hate it when people say that. When

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people say, "Well, I'd never buy a

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nudity because annuity company keeps the

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money." It's one of 40 ways to structure

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it, Chester. Okay? We're going to

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structure it so that that money that you

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worked hard for is not going to go poof.

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Okay? It's going to go to your

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beneficiaries. But what I was going to

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say, and this is very important, if you

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put that income floor in place

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contractually that you know is going to

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be there, you know it's going to happen,

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it has nothing to do with the markets,

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guess what? you will be a better

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investor because you don't have to

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disrupt the investments to take the 4%

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out in a down

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year. Makes

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sense. It should make sense because it

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does make sense. Period. So, put the

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contractual guaranteed floor in place

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and then go invest the money. You'll be

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a better investor. Trust me. Trust me on

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that. Think about it. And when you need

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the income floor, look at what you need

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and do you can do a reverse engineer

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quote on my site at theanuityman.com

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using our calculators to use as little

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amount of money as possible

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contractually to solve for that goal.

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And if you need if there's inflation in

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the future, you need to fill in another

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gap, you go in and do it again. You do a

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reverse engineer quote to solve for that

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specific dollar amount.

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So, let me declare right now as Stan the

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Annuity Man, America's annuity agent,

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licensed in all 50

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states with the backing of Wade Fowl,

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smart guy in the room, the 4% rule is

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officially dead. The 4% rule is done.

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The 4% rule needs to be buried. The 4%

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rule needs to be replaced by contractual

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guaranteed lifetime income using annuity

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transfer risk strategies with A+ rated

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carriers or better for lifetime income.

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And if that happens, and it will happen

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because I'm going pound the table out

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here to make sure it happens, you'll be

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a better

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investor. All right. Boy, I got going,

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didn't I? Yeah. And the caffeine's

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wearing off. So, I mean, think about if

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I was really rolling on caffeine. It was

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like

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It's all good. My name is Stan the

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Annuity Man. This is the Stan the

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Annuity Man YouTube channel. Thank you

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so much for joining me. Hit the

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subscribe button and I'll see you next

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time.

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[Music]