Guaranteed Investment Contract vs Annuity

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

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Today's topic is guaranteed investment contract, aka GIC, GIC, versus annuity. Boy,

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I haven't heard the GIC thing in a long time, and I've been in the business for decades.

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Older than dirt. I got cowboy boots older than most advisers, as they say. So, we're going to

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talk about GICs versus annuities. It's many types, but we're going to do that after this.

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Occasionally, I get the question, "Hey, Stanny, you guys offer GICs?" And a lot of times that's

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because the person calling is trying to flex a little bit to see if I know what a GIC is. Hey,

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you know what a GIC is, Stan? You've been around the block. Yeah, I've been there. Dean Witter,

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Paine Webber, Morgan Stanley, UBS. GICs are typically inside of retirement plans currently,

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if they have them. And they also can be negotiated with specific institutions and/or life insurance

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companies, but not as much as they used to be back in the day. And a GIC is just a fixed instrument.

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Provides liquidity. Typically, the rates are pretty good, but they're just like seeing

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a UFO. There's just not a lot of them out there. So, when you compare them to annuities — and the

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title was annuity, but annuities — there's many different types of annuities. A GIC compared to,

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say, a MYGA, multi-year guarantee annuity, the industry's version of a CD. That would be the

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closest, I guess, correlation. You can go to my site and look at the best MYGAs for your state.

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They're fixed annuities, so each state regulates them. So, you have to pull up your state and

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then pull up the duration and look for the best interest rates that you can get, similar to a CD.

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But that would be the easiest correlation. Once you start comparing a GIC to, like,

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an immediate annuity or deferred income annuity, a qualified longevity annuity contract, or an income

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rider — and all of those are for lifetime income — GIC is not a lifetime income product, okay? It's a

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principal preservation product that it's hard to find, but you can find them. And a lot of times,

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it's for really, really high-level, you know, big-time institutional-type numbers where it's

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a negotiated contract. But like I said, they can be found in retirement plans as well.

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So, it really all comes down to the two questions that I ask everybody and my team asks everybody.

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Number one, what do you want the money to contractually do? And then the second question is,

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when do you want those contractual guarantees to start? We also use an acronym called PILL.

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P stands for principal protection. I stands for income for life. L stands for legacy. The other

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L stands for long-term care. If you do not need to contractually solve for anything in that PILL, you

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do not need an annuity. There's no S for stocks. There's no M for market. There's no B for Bitcoin.

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There's no G for growth. If you need growth and all that stuff, do not buy annuities. And I

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know what you're saying to me. But my advisor and Johnny Appleseed, Asian, at the good steak dinner

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seminar where I had a really good medium-rare filet mignon, they told me I could get growth with

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annuities. They showed me the numbers. I watched the video on it. Those are non-guaranteed

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numbers, okay? And I know the sales pitch. Well, you protect your principal, and you can get market

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returns. Well, if that was true, don't you think Goldman Sachs and JP Morgan, that's all they would

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buy? If you could get real returns and protect the principal, then why would you ever buy a stock,

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a mutual fund, ETF, whatever? If it sounds too good to be true, it is every single time.

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Now, the cool part about GICs, GICs, contractual — that lives in my world. It's

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just really not available to the consumer at this point. Maybe that changes in the future, but right

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now, that's not something that, if you go to my site, there's quoting on GICs. There's quoting on

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MYGAs, which are baby GIC — I'm going to call them baby GICs — but they do the same thing. They protect the

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principal. There's no market attachment. There's no annual fees. And they give you a guaranteed

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interest rate for a specific period of time that you choose. And with MYGAs in non-IRA accounts,

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that interest can grow and compound tax-deferred, which is also good. You can kick the can down the

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road. Kick the IRS can. I'm not saying you're kicking the IRS and the can. I'm saying there's

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a can with IRS on it, and you're just kicking it. You know, you're not paying the taxes on

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it. Just don't want to offend my friends at the IRS. We're on good terms at this time.

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But GICs versus annuities, I'm not sure that's a great comparison. I just think that you need

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to know that there is such a thing called a guaranteed investment contract. It's like

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The Andy Griffith Show when they're looking for Lake Loon, and no one could find where

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Lake Loon was. All the Andy Griffith people know what I'm talking about. The point is,

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it's just a product that's few and far between. There's some retirement plans

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that have it. But when you go to the annuity side for contractual guarantees, that's where I fit in,

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okay? The baby GICs, the MYGAs — I think I just coined a new phrase, the baby GICs — the MYGAs are

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great principal protection products. You know, just along with CDs and money markets and GICs,

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there's MYGAs. Protect the principal, get a guaranteed interest rate, okay?

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But most of you out there that are looking at chapter 2, Chapter 2 of your life — some people

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call it the R-word, retirement. I think the key word in retirement is tire. We're all tired. Okay.

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Forget that. Chapter 2. Chapter 2 is about you. You need to look at what you want that money

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to do. So don't just call us up and say, "What's your best annuity, son? Just tell me the best one

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right now. What is the best one?" I don't know. How's a rainbow made? What's the best restaurant?

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I don't know. What kind of food do you like? There's no generalities. I mean, you can't say,

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"What's the best one?" And by the way, if someone answers that question with the best one,

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run away. Run away, because they are just trying to sell you something and go on a

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trip to Bora Bora if they sell enough of it. Okay, there is no best. The best is trying to

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figure out what you want. What do you want the money to contractually do? When do you

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want those contractual guarantees to start? And then running the quotes to look for the highest

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contractual guarantee with a highly rated company that can back up that quote. That's the best one.

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What's the best company? There is no best company. For lifetime income, it's A+ or

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better. So anything A+ or better that provides the highest contractual guarantee for your specific

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situation — that's the best company. Remember, annuities — there's many different types — are

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commodity products. Even in the GIC world, that's a commodity product. You're choosing the highest

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GIC interest rate, right? If you have that within your retirement plan or you can have access to

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that. In my world, you're choosing the highest contractual guarantee for your specific situation.

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For lifetime income, it's A+ or better. For MYGAs, we can go less than A+ because we're dating them,

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we're not marrying them. So it can be three-year, four-year, five-year, whatever.

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So, when you look at GICs versus annuities, yeah, I mean, there's a correlation between

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one of the annuities, fixed annuities that we look at. But do not buy annuities of any

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type — I don't care what's being shown to you — for market growth. Please don't do that. I mean,

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if you want to call me up or email me, [email protected]. What do you mean by that?

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Because this guy showed me this 10%. I'll just give you the facts, the stats. Here's the stats.

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In the biggest raging bull market of all time, with all of these too-good-to-be-true products,

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here's what they really returned. You'd be shocked. And people out there that bought

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the dream and now realize that they own the contractual reality, you're nodding your head

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because I can hear the marbles going up and down. Uh-huh. Yeah, I bought this thing, and it hadn't

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done jack. Don't buy the dream. If it sounds too good to be true, it is every single time. And if

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you can't explain it to a nine-year-old — no offense to nine-year-olds — don't buy it.

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If Warren Buffett was going to buy annuities — he's not, because he's like a hundred and he's got a

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couple billion. He's liquid, and he doesn't need annuities. He doesn't need income. But

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if he was going to buy an annuity, he'd buy it for the contractual guarantees. He'd buy it to

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understand what it's going to do. All right? So what I'm encouraging you to do is go to my site,

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theannuityman.com, shop around, run quotes, look at the fixed rates, watch the videos,

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read the articles, download the free books. There are six owner manuals that you can download for

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free, and I encourage you to do that. And then schedule a call. Free consultation. It's not

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going to cost you anything. 30 minutes. We're going to listen to you. We're going to advise

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you whether an annuity might fit. And if it doesn't, we're going to tell you that as well.

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But do me one last thing. Above my head is a link to a video that explains the process,

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that if you decided to become a client, you went to our site and ran quotes and found a contractual

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guarantee you want and want to lock in — watch that video. That's how it works, okay? Start to finish,

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soup to nuts. My name is Stan the Annuity Man, pioneer of contractual guarantees only.

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See you next time.