How To Calculate Future Value Of Annuity Due

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

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how to calculate the future value of annuity due? I got to talk

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my handlers, my consultants, and all those people that help me choose these topics because

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I do a bunch of these, but this is a goofy one. I mean, this is absolutely goofy. By the way,

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Stanifesto is the first book I ever wrote on annuities. I got seven of them out there. That's

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the first one. It's on Amazon. If you want a copy, you can, you know, shoot me an email:

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[email protected]. I think we have some left over that I can send to you. But

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the annuity Stanifesto — found this shirt. So send me that. But we're going to talk about annuity due

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and all this due-due. I don't know. I got to have a meeting with my consultants.

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Okay. Annuity due... due, due, due, due, due, due, due.

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In the world that I live in, I mean, these are structured annuity dues structured like

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immediate annuities. So why not — let's just look at immediate annuities. You know, we can look at

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future valuations and all that stuff and use formulas that have letters in them as well as

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numbers, which sometimes eliminates me. But honestly, this topic has come up,

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and eventually my, you know, sitting around the round table — you know, I've got the lawyers, I got

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the handlers, I got the bodyguards, and then I got the consultants — and the consultants are like, “Why

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don't you do a couple topics on annuity due?” And I'm like, “Because they're immediate annuities,

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and why are we calling that and making people get confused?” If someone said to you, “Hey,

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you need to buy an annuity due.” First of all, I need to meet that person — that's the first thing.

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Second of all, let's just look at an immediate annuity, because that's in essence what you're

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structuring with an annuity due that has periodic payments. And typically those payments start,

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like, immediately. But immediately for immediate annuities is 30 days from the policy issue date.

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So to me, I'm doing you a service to say forget annuity due unless every carrier starts quoting

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them, which means it becomes a true commodity product, which means it becomes competitive.

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Until that happens, then we need to focus solely on immediate annuities — single premium immediate

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annuities for lifetime income — because you can structure them to pay monthly,

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or you can say I want a quarterly payment, or you can say I want a semiannual payment,

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or you can say I want an annual payment. So both can be structured very similarly.

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The reason that I want you to focus on SPIAs, single premium immediate annuities, instead

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of the mythical unicorn annuity due is because so many carriers quote it. It's a commodity product,

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and you're going to get the highest contractual guarantee by shopping for SPIAs. If that changes

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in the future, I come on the video and I say it's changed. Things have changed. The due is due, and

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it's due and due-due-due. But right now, the due-due-due and the da-da-da — and that's not what we're saying.

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It's about immediate annuities. If you need lifetime income to start as soon as 30 days or as

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long as a year deferred, that's a single premium immediate annuity that was originally developed in

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the Roman times. The word annua, I've been told by my Latin friends — do I have Latin friends,

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Dr. V behind the camera? Anyway, they said that means payment. Okay? So that's where it came

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from in the Roman times, and it's been sold in this country for hundreds and hundreds of years.

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I got a good friend, Mosh Malefki, who's been on my podcast, fun with annuities. He's

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literally gone over to England in the basement of churches and researched what's called tontines,

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which are similar to annuity dues. They don't really exist, but they are what they are. But

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in essence, today's version is a single premium immediate annuity. It's a payment.

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It's a pooling of risk with people your age so that you're going to get paid as

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long as you're breathing. And the primary pricing mechanism is your life expectancy,

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or life expectancies if joint. At the time you set the payment — you start the payment.

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And we can structure it so that the evil annuity company doesn't keep a penny. So let's just say

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you bought a single premium immediate annuity for life, and two years into it you and your wife die

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in a fiery Learjet crash. That's not good. Sad. But we structured it so that 100% of any unused

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money goes either lump sum to your beneficiaries or goes in payment form to your beneficiaries.

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You say, “Well, Stan, why would you ever do payment form to your beneficiaries?” That's

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called lovingly handcuffing your beneficiaries. If you have children that fall under the category

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of wandering ambiguities — they really haven't gotten their shiat together — you can say, “Okay,

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you're just going to get payments of that money, not a lump sum.” Now, they're still

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going to buy the Lamborghini or the Ferrari. Just understand that. But they're going to be

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making payments on it instead of buying it with a lump sum. And that's what you're trying to do.

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You're trying to create a payment stream, making sure the annuity company doesn't keep a penny.

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So, you could do life with cash refund, life with installment refund,

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or joint life with cash refund, joint life with installment refund. As long as you're breathing,

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it's going to pay. So, in the joint life scenario, if one of you dies,

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the income continues uninterrupted and unchanged for the second person's life. And when they die,

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it's either a cash refund or an installment refund.

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You know, I'm glad the annuity due-due came up. You know, can I get you those quotes? I

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can call. I certainly can. And they will take my call because I'm the annuity man. But it's not

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a competitive world. The competitive world is in single premium immediate annuities,

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and that's important because you're going to get the best pricing. You're going to

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get competitive pricing. They're going to be bidding on your age ranges to lock

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you in and to fill in that life expectancy tranche at that specific annuity company.

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So, you learned a couple things today. You learned about annuity dues,

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and that's not like paying your dues. “Pay my dues, son. Give me my annuity.” No,

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that's not what it is. You learned about tontines, which is from my friend Mosh Malefki, that he's

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been really researching those. And actually, I guess I can do a video on those down the road.

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All of this makes sense. The question really comes down to, what are the carriers doing?

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Where are the carriers focusing? Where can I get the best contractual guarantee? And right now,

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for immediate income starting within 30 days up to a year, single premium immediate annuities.

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Do me a favor. Go to my site, run quotes. You can go to my site. There's calculators there, and you

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can run single premium immediate annuity quotes till the cows come home, as they say in North

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Cackalacky, North Carolina. You can also download my single premium immediate annuity owner's manual.

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You can actually ask for the Stanifesto. I'll send you that as well. And if you're really nice,

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I might even send you a hat. You know, we offered the hat the other day, the light blue Carolina

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blue version of it, and we offered it on a live event. Oh my goodness — we got thousands of people

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wanting hats. That's fine. We shipped them out. So if you're nice to me, maybe I'll do that.

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One last thing. Do me this favor. Above my head's a box, and that box has a link

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to a video that you need to see. And that video explains how the process works with the annuity

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man — the application process, dealing with my policy delivery and application team in my

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Las Vegas office. You need to see that because that's where the rubber meets the road in the

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annuity business right there. They're fantastic. They do everything from start to finish. But

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take a look at that video, I think it's 10–12 minutes where I'm just freestyling and telling

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you how it works. Proud of those people, they're great employees, and they will take care of you.

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My name is Stan the Annuity Man, author of The Annuity Stanifesto.

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See you next time.