John Lenz: The State of The Annuity Union

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[Music]

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welcome to fund with annuities where

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every single week I welcome a celebrity

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guest expert that can help you maximize

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chapter 2 of your life listen learn

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laugh and love every minute of the most

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let's get to

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[Music]

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it welcome to with annuities the number

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one annuity podcast on the planet and

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for that matter one of the best podcasts

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on the planet period regardless of

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category I'm your host Stan the annuity

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man America's annuity agent sporting the

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new popular Trend setting annuity goatee

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as you see that now the problem is this

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time is coming in Gray which I

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blame on the industry for driving me

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crazy and that's the reason we have a re

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P guest on today he is he's so smart

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about annuities he's forgotten more than

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most agents will'll ever know okay but

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he's also a personal friend and we have

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a lot of fun outside the annuity

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industry we go see concerts and things

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like that I'm going to give away some

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things his friends don't even know I

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might reveal that depending on how much

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non-payment of uh bribe money he gives

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me let me introduce to you personal

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friend soothsayer counselor all good guy

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but the smartest dude on the planet when

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it comes to annuities including yours

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truly my friend John

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lens I don't think I can I don't think I

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can say anything that would help that

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thank you s that's pretty good is it

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John I mean you can you know I've met

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your lovely wife again you like me

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married up you know in life um and so

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you probably should just record that and

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just play it or send it to her right

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before you show up yeah I might do that

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for both of our wives

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let's jump in John it's a you know at

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the time of this taping please everybody

2:05
check the date um it's a weird world in

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the annuity industry as I always tell

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people the bill don't ring at the top or

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the bottom with contractual guarantees

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but dog on it at least we can see the

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bill right John yeah what's going

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on well it's probably been what another

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record year for annuity sales uh in the

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country last year was year Yep this year

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setting all kinds of new records uh

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interest rates are high until today and

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uh so yeah it's it's a record setting

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year and lots of money moving around in

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the industry money coming in out of the

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market in and out of annuities in and

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out of banks so yeah I've been a wild

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ride well let's talk about rates heading

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down um you know people always say well

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we stand you know where rates headed and

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I always my ansers the same every time

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if I knew where rates we're going I

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wouldn't be talking to you I'd be on a

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Lear jet trading interest rate Futures

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with

3:05
John um but with 34 trillion in debt and

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Counting and for the conspiracy theorist

3:11
out there and mathematicians there's

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even more than that as you know

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um Common Sense would tell you we can't

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continue to raise interest rates

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otherwise the whole debt the whole um

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amount of money that we raise every year

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as a country would just go to service

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the debt now without all that really

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factual ual Common Sense stuff being

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laid out John add to

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that well Co sent rates

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plummeting uh and then as you know the

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economy struggled and as we've worked

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our way through that inflation reared

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its head there was a lot of money

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running around out there and so our

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inflation rate became unacceptable fed

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raised rates I believe 11 times until we

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got a 10-year treasury pushing 5%

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which is if you think about it in the

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low of Co I think it traded at sixish so

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900% increase in three years and a

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little bit so that just caused a lot of

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turmoil in the industry as people

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started to see three four then five then

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five plus nearly six% interest rates in

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multi-year guarantee annuities your

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favorite fair and mine too currently I

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mean you know at you know at the time of

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this taping I always tell and I just did

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a video called go go to the sidelines

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with contractual guarantees I mean migas

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are contractual guaranteed home run for

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side for sideline money same as money

4:39
market same as

4:40
CDs yeah but anyway this past week uh

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fed uh held rate steady today's uh

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employment data came out 150,000 new

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jobs created uh that's uh less than

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expected in in in line with the cooling

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economy that I think the fed's trying to

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Target so what's what's going to happen

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now is there's going to be a rush to

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lock in these rates because the tenure

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treasury has fallen 10% in a shield from

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five to four and a half so anyway that's

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what's going on and it's been a crazy

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year as you know your office was backed

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up with annity processing because our

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Insurance Partners were backed up two

5:19
months or more before they could approve

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applications we've never seen they

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caught up I mean let's be very clear I

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mean it's a lot better um you know and

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you know my my company being the in the

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annuity room we do have clout here and

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using John as well for that clout but um

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yeah I don't think know people are

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always trying to time it and they're

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trying to um you know find that sweet

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spot or Arbitrage moment you cannot beat

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the life insurance companies's issuing

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annuities please don't try I know that

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you think you're smart enough to do that

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please don't try um because John and I I

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I guess between us two what do we have

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70 years in the

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business we haven't if we haven't

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figured it out

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Johnny yeah there's 70 years uh between

6:05
us you're right there's a few you know

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there's a few things happening

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um I still think that even though we've

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hit record sales with annuities um I

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don't think that's going to subside just

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because of the demographic tidal wave it

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might not be migas next year it might go

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back to Lifetime income products do you

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agree yeah lifetime income products had

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record this year too uh the the the

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product line that fell I believe overall

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or had the least Improvement was

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variable annuities and you know I think

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we'd agree rightly so uh you know that

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fee structure is is more and more uh

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problematic for advisors and customers

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alike and Regulators yeah so when you

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can get into an annuity with a Miga with

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a five five and a half% guaranteed net

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net net rate why why risk your money I

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agree and I have nothing against and you

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don't have anything against um variable

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annuities we talked about it I mean heck

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we were almost around in 1954 when they

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came out with variable annuities I mean

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we're old dudes I know I look vibrant

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young and John is close by with that I

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mean actually John looks like he's he

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John I don't like John for this reason

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he does not

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age yeah might be that might be the the

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Shaving of the head I think that is that

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throws people John I got old early and

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then I've stayed old young forever oh

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that's that's what I intend to do do you

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attribute a lot of that to just knowing

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me uh that's why I don't grow a beard

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because I don't want a big white

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thing John that's the annuity goatee and

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by the way for all of you out there

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going out to trade market don't it's

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already been done um just letting you

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know there's a question on my mind

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Johnny um why do companies there's a lot

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of 1035 transfer business and for all

7:54
you people that are really bored 1035

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refers to the IRS code 1035 that would

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be 1035 that says you can transfer one

8:03
annuity to another annuity without tax

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consequences why do the renewal rates at

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the company that people are at why are

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they not competitive which leads people

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and us to recommend moving to another

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higher contractual guarantee if you and

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I were running the the it would have to

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be the lens St the the would it be Stan

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lens or lens stand doesn't matter no ego

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if we're running the annuity company

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wouldn't we try to keep the money

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well if we were running a nonprofit

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organization then we would renew

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everybody at uh current interest rates

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regardless of what our investments were

8:38
doing but you know the the truth of the

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matter is insurance companies are

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for-profit institutions and you know I

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think I want my insurance company to be

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profitable so that when comes time to

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pay a claim they can do so but

8:53
historically insurance companies have

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renewed annuities at a lower rate than

8:58
new money rates

8:59
not everybody and not all the time and

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so uh as you've taught people and then

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you know I've talked about many times

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you've got to look at your renewal rate

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dat and just keep the company honest

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right right and you know let's be honest

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and how the sausage is made a lot of

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these annuity companies are hoping that

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people lose track of it their agents

9:18
lose track of it their agents aren't in

9:20
the business they're not technically

9:22
Savvy to follow up with it like our team

9:24
is I mean that to me it seems like

9:27
that's part of the strategy they're not

9:29
going to ever admit to that except in

9:30
the board meetings that you're in but

9:32
you're you're sworn to secrecy right

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it's certainly part of the strategy and

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it's not unique to our industry I'm sure

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uh you and other people on your podcast

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listeners have had a bank account today

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that is earning 0.1 or 02 or point4

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that's a good point and then they've got

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a brokerage account at one of the major

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brokerage firms where they've got cash

9:54
that could be earning 5% in a US

9:57
Treasury money market fund and it's

9:58
earning less than one so you have got to

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Advocate and go out there make sure your

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money is not sitting around uh making

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somebody else profit instead of

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you it's the procrastination ratio John

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I just came up with that it's PR it's

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the procrastination Ratio or the pro

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procrastination quotient if you want to

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be a little bit more quany about it that

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I'm sure some actuary in the closet at

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some life insurance company goes well

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listen you know if we don't do a lower

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if we do a lower renewal rate the 7

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1.3% of the people will just let it

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Renew at that rate which will bring I'm

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assuming that's kind of what's happening

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I mean with that same type of voice

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right yeah I know that voice very well

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exactly uh yeah it's a larger percentage

10:44
than that uh you know really oh well

10:47
sure I think I thought I heard you say

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1.3% no I said 71.3 71.3 oh there we go

10:53
and I like that number better as you and

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I both know 67.7% of all statistics are

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made up on the spot I thought it was

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67.8 I didn't okay like that yeah a lot

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of people uh not only do people fall

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asleep at the switch but then their

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advisers gold and retire and die or they

11:11
leave the business for you know greener

11:13
pastures and consumers just forget about

11:16
it and that's good for the insurance

11:19
company by the way I'm talking to John

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Lind he is he is a phenomenal person

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very good at what he does in the annuity

11:27
industry I call him the annuity

11:28
architect based in lovely Portland

11:31
Oregon um which I frequent when there's

11:34
a good concert and then I drag John to

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the concert whether he likes the music

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or not because I'm trying to I'm trying

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to make him a more rounded person

11:43
culturally wouldn't you agree with that

11:45
yeah my bruises are gone from the

11:47
beating I took in the last uh concert we

11:49
went to the heavy metal so this is a

11:51
great story off and people hang in there

11:53
with us okay I'm standy nuty mat come on

11:56
so I took him to some heavy metal

11:58
concert and there's this Mosh Pit with a

12:00
bunch of crazy people going around

12:02
Google mosh pit if you don't know what

12:03
that means and I'm talking to to John

12:06
and we're standing in the back because

12:07
we're old people and all of a sudden

12:09
he's in the mosh pit I'm like okay um

12:11
this will be an interesting one to

12:13
explain to his wife why he has a bloody

12:14
nose and a black eye but he survived it

12:17
because he's athletic and I like that my

12:19
ver my version of that is I was standing

12:20
there listening to this music and I felt

12:22
too big a nity man hands on the middle

12:24
of my back and all of a sudden I was in

12:25
the middle of a m pit something like

12:27
that something yeah there's the truth is

12:29
right there in the middle by the way

12:31
Johnny um you know me and you both have

12:34
in the in the past tell people hey don't

12:36
lock in longterm you know stay short

12:39
latter it short just because rates will

12:41
will move eventually we want to be there

12:44
well heck it you know I I did a video

12:47
the other day called it might look might

12:49
make sense to do a long-term migga

12:51
ladder going long on the yield curve

12:53
because migas are not

12:55
callable do you agree with

12:57
that yeah like you said earlier if we

13:00
could predict interest rates we probably

13:02
would be doing something else today if

13:04
we could predict them accurately um we

13:07
start a band Johnny would we start a

13:09
band I mean that's always been a dream

13:11
of mine that I'll never do but I mean

13:13
all the cool names are taken as you

13:16
know but the the rates uh today the

13:21
rates are pretty similar between two

13:23
three four five all the way out to 10

13:25
you know it's that five five and a half

13:27
number yeah and yeah personally I don't

13:30
I do not know so I've got some money

13:32
short some money intermediate and I have

13:34
some tenure money and I'll be super

13:37
happy if rates go down and look like a

13:38
genius with my long-term money and if

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rates go up and turn around go back up

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I'll wish I would have stayed short so

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given that we don't know having a little

13:47
bit of a ladder is not a bad idea yeah

13:50
and I always tell people at the rates

13:52
current rates check the check the date

13:53
of this podcast I will take your call

13:57
five years from now

13:59
if you're mad at the rate we lock in

14:01
today I'll take it and I'll just I'll

14:03
just listen to you be like the Charlie B

14:05
Brown

14:07
thing I mean I'll be okay okay you're

14:09
mad because you missed opportunity but

14:11
you're locked in at whatever five and a

14:13
half six% whatever I you know I always

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tell people remember when you go into

14:18
the markets what what yield rational

14:20
yield you're looking at seven or eight

14:22
please don't come to me with 12 and 13 7

14:24
or

14:25
8% you know if you're two percentage

14:28
point away from that locking it in

14:30
contractually please tell me why you're

14:31
putting your money at risk to get the

14:33
rest unless you're just you know Gordon

14:36
gecko or Gordon would that be Jette

14:39
gecko I mean what regardless the point

14:42
is we are at interest rate levels that

14:45
if you have enough money you can live

14:47
off the interest lock it in long term

14:48
and then we'll cross that bridge and

14:50
pick up the fork and the road when we

14:51
get there if rates happen to go down and

14:53
we have to then red do something

14:56
different at the at the end of the

14:58
duration but I I think people are making

15:00
this very very complex the same ones

15:03
that go well if it goes up I'm just

15:04
going to log it in those same people are

15:06
now analyzing should they lock it in so

15:10
um let's talk about liquidity John

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that's a big thing you know I like the

15:14
word liquidity could mean a lot of

15:16
things I don't drink beer anymore back

15:19
in the day liquidity meant beer but

15:21
doesn't anymore we're talking about

15:22
liquidity with with annuity products

15:27
um you know we do that with my team we

15:30
have a full team that that handle MGA

15:32
renewals you know when they renew Etc

15:35
but talk about liquidity W Windows and

15:38
how

15:39
people can um you know if they're not

15:41
using us they're going to have to stay

15:43
on top of it to not get stuck with the

15:45
annuity company put that into English

15:49
John well when you buy a let's just take

15:52
a five-year Miga the insurance company

15:55
is going to take your premium your

15:57
deposit and they're going to invest that

16:00
money into something close to five years

16:03
because they owe you this money they've

16:06
created a liability so now they've got

16:08
to invest your money in an asset that

16:10
matches up with the duration they can't

16:12
buy a tenure a 20-year bond with then

16:16
they owe you the money back in five

16:17
years or would they put it in a loc a

16:19
one-year money market account because

16:21
the rates don't match up so then you get

16:24
this really competitive rate on the

16:25
front end at the end of that term some

16:29
companies will simply just leave you

16:31
alone you're there you don't renew you

16:33
just get whatever interest rate they

16:34
have and it's governed by the minimum

16:37
rate in the contract other companies

16:39
give you a 30-day liquidity window which

16:41
usually starts on your policy

16:43
anniversary but could start 30 days

16:45
earlier you got to be aware of that and

16:48
they'll give you a renewal rate offer in

16:51
theory that offer is going to correlate

16:52
with the Investments the insurance

16:54
company has at that time so as you said

16:58
you got a team that keeps companies

16:59
Honest by looking at those rates and if

17:01
the rates are competitive where they

17:03
stay they stay if they're not they can

17:05
opt to transfer with a

17:07
1035 bottom line is you got to stay on

17:09
top of it and manage it just like

17:11
everything I mean I tell people all the

17:13
time if you have a trust you got to

17:14
revisit the Trust on an annual

17:16
basis um etc etc I mean nothing's

17:19
nothing's TurnKey nothing's completely

17:22
Lock and

17:23
Load I mean you have to you have to look

17:25
at that I don't know what that do you

17:27
hear that sound in the background John

17:29
not happening

17:30
here maybe that's in my head but

17:33
something sounds like it's blowing up in

17:34
my office here and that's okay if it

17:37
blows up John will continue the podcast

17:40
and it will probably be a better podcast

17:42
and to go down kind of a slippery slope

17:45
here John I'm thinking more about the

17:47
annuity goatee right now if it gets

17:48
longer do I do different callers I would

17:52
I I've seen it red I think uh should it

17:56
match the

17:57
Hat

17:59
I should have worned my an nudy man hat

18:00
today Stan because I have different

18:02
colored hats and for all the people out

18:04
there that keep asking me for hats we're

18:05
getting them manufactured and we'll give

18:07
them away Etc just send us an email get

18:10
on the waiting list I've got like 300

18:12
people on a waiting list for a stany

18:13
nudman hat but I don't just send any hat

18:17
John it's got to be a really nice hat

18:19
with logos all over it and inside of it

18:22
just in case someone picks it up and

18:23
looks at it so let's talk about Spas

18:26
single premium immediate annuity John

18:28
the granddaddy of all annuities the one

18:30
from the Roman times the one

18:32
that when people say I hate all

18:34
annuities they're talking about that one

18:36
for whatever reason um the payout the

18:40
payout rates are are very good you know

18:43
even though you know life expectancy

18:45
does Drive the pricing trains interest

18:47
rates play a secondary role what's the

18:51
um the fact that it's a competitive

18:54
world out there and companies are trying

18:56
to attract the money does that play play

18:58
into it as well and if so how

19:01
much well as you know this space is

19:05
super competitive there are dozens and

19:07
dozens of good companies that want to

19:10
take that deposit credit interest try to

19:14
make a spread and make a profit there

19:16
are a lesser number of companies and

19:19
thank goodness they're mostly the

19:20
biggest and the strongest of the

19:21
companies that want to take your money

19:23
in now and then promise to pay you for

19:25
the rest of your life or you and your

19:27
spouse uh or significant other right for

19:31
as long as you live which might be 30 40

19:33
50 years so they're turning out and

19:36
buying these long-term Investments

19:39
getting in lots of different ages and

19:41
policy holders so they can figure out

19:43
not when you were going to die but when

19:44
the average person is going to die right

19:47
then they take that risk of you living

19:49
too long the longevity risk default risk

19:52
on the investment they absorb all of

19:54
that and make a promise to pay you a

19:57
payment it's great we're seeing rates of

19:59
return as high as six six and a half%

20:02
and let me stop you there Johnny live

20:04
long enough let me stop you there ladies

20:06
and gentlemen we are not talking about

20:09
yield we're talking about payout rates

20:12
so don't let don't be confused I'm

20:14
getting

20:16
7.3% no you're getting a payout on your

20:18
money of 7.3% which is kind of an actual

20:21
reflection numerically of your life

20:24
expectancy I know I had to interrupt you

20:26
Johnny but I get so many any calls and

20:29
there's so much misinformation out there

20:31
with agents and advisers I'm not sure

20:32
they're just dumb misanthropes or they

20:36
really don't or sociopaths or they

20:37
really don't know but that's why the

20:39
podcast is in place and my videos are in

20:41
place is so that people do understand it

20:44
yeah so I'll clear that up because I was

20:47
I was talking about both things so clear

20:49
it up brother if you're 70 some odd and

20:51
put in $100,000 and get let's say $700 a

20:56
month 7 time 12 is 8 84 that's 8,400 per

21:00
year on 100,000 so that's an like you

21:03
said an 88.4% payout it's not the rate

21:07
of return you get but if you live 12

21:10
years now you've got all of your money

21:11
back and then you live 13 years now you

21:14
have a 1% return You Live 14 or 15 years

21:17
you have a two three 4% return you can

21:19
actually eat that number up to the six

21:22
all you got to do is live out into your

21:23
90s and there are lots lots of insurance

21:26
companies paying people payment at 100

21:28
years old John I don't know if you know

21:31
this with my recent tattoo that I got

21:33
that I you know they're always

21:34
underneath the annuity man logo stuff no

21:37
Roi till you die right here on the chest

21:39
right exactly right here on the chest um

21:42
now I think I I think I spelled it right

21:44
but uh no Roi till you die is what I

21:48
tell people was a return on it stand

21:50
what am I getting on that thing I don't

21:52
know tell me when you're going to die

21:53
I've always offered this John no one's

21:55
taken me up on it which is sad that I

21:57
will come to the funeral and sing

22:00
Acappella the ROI number and weave it

22:03
into their life story semi wrap but with

22:07
an operatic flare to it but no one's

22:10
taking me up on that I don't sing well

22:13
but what I would volunteer to do is to

22:15
give you a what would my Roi be if I

22:18
lived 10 years 12 years 15 years 20 or

22:20
25 years because we can calculate that

22:23
in advance now then you just pick the

22:25
day you're going to die and that's your

22:26
number so in other words I could do

22:28
those songs

22:31
now it's always a thought John you know

22:34
I'm a marketer I'm a brander and now the

22:36
annuity goatee is the newest thing it

22:40
hit me the other day it's like that's

22:42
that would be good my wife is not a fan

22:45
by the way she doesn't under but you

22:46
know she wasn't a fan John when I

22:48
started doing videos she goes videos

22:50
he's gonna watch your videos I don't

22:53
Millions maybe um but you know now she's

22:57
like man those videos were a great

22:59
idea well uh I I did see uh that YouTube

23:04
just uh announced you as a 10,000

23:07
subscriber plaque holder uh with a

23:10
million plus views that's it is

23:12
impressive I don't think anybody else in

23:14
the annuity space come close to that

23:16
well first of all let's let's gauge that

23:17
for in the YouTube space that's nothing

23:19
I mean for the for the for the culture

23:21
Warriors and the and the influencers

23:24
that's nothing they get that in a day I

23:25
get that but the word annuity the curse

23:28
word of all Financial products yes we

23:31
are the top it's not even close and

23:33
that's the reason that everybody when I

23:34
told them I'm I'm going to do YouTube

23:35
videos we've done over a thousand so far

23:38
in counting shooting another 20 next

23:40
week in studio they're like it's never

23:42
gonna work Stan anytime you tell me that

23:45
I'm gonna probably do it I'm such a

23:47
contrarium like really great that means

23:49
no one else is gonna do it but we're

23:51
having fun with it and then the fun with

23:53
the new's podcast I get people like you

23:54
on here that make me look good John I

23:57
swear just you being here with that

23:59
sport jacket makes me look good well fun

24:03
with nties is the Gangam Style

24:06
equivalent by

24:09
podcasts Google

24:11
it hey Johnny CX you know when they came

24:14
out in 2014 I wrote the first book on it

24:17
it was not a bestseller but it should

24:18
have been but it has been distributed a

24:20
lot I'm a big fan of CAC just because

24:24
they do so many things and for you know

24:27
and QX qualified longevity anity

24:29
contracts for the people that say never

24:31
buy nity inside of an IR those people

24:35
those journalists QX were were designed

24:37
for IRAs okay so they need to be quiet

24:41
but give us some updates on QX Johnny

24:43
even though I know the answer you will

24:45
say it

24:46
better well the answer is

24:48
$75,000

24:50
Alex and what is the what is the maximum

24:54
amount I can put in my CAC if I wait a

24:56
minute stop where's

24:58
125,000 last year would you bring in

25:01
Vanna Please I want to see that dress so

25:04
yeah the uh the IRS through secure 2.0 I

25:07
believe said now you can put in $200,000

25:09
into your CAC which means you can wave

25:12
your rmds all the way to 85 get a single

25:15
or joint lifetime income uh yeah it's

25:17
fantastic and we're seeing a lot of

25:19
$775,000 cases because people who

25:22
believe in CAC already put in their 100

25:24
and a quarter right and there's no more

25:26
formulas of course the government when

25:28
they first came out and John and I were

25:29
you know they everyone asked our opinion

25:32
sometimes they listen sometimes they

25:33
don't we're like make it simple make it

25:35
simple make it simple of course the

25:36
first one it wasn't simple there's some

25:38
formula it was crazy now it's $200,000

25:41
if you have $200,000 in your IRA you can

25:43
buy KAC and what the government is doing

25:46
is saying hey that other annuity that

25:48
you own called Social Security best

25:51
inflation annuity on the planet let's

25:53
let's add to that income floor using Ira

25:56
money that's all they're trying to do

25:59
okay and you should be doing that anyway

26:00
because you know chapter two of your

26:02
life is about you know going and living

26:04
your life and lifestyle in the income

26:06
floor that you establish and qac the

26:09
only thing I'm going to say about qac is

26:11
that do not buy qac for the tax savings

26:15
please that should be the third reason

26:16
first reason is Lifetime income second

26:19
reason could be under the first one

26:21
which is joint lifetime income if you

26:23
want to add a spouse another reason

26:25
would be if you want to combat inflation

26:27
with

26:28
income starting at a future date because

26:30
anytime you attach a cola or any type of

26:32
increase the inity company doesn't give

26:34
that away but then the last reason would

26:37
be the

26:38
savings on your requirement and

26:40
distributions because the money in a qac

26:42
is not used to calculate rmds but people

26:45
call me all the time I'm going to buy

26:46
this just for the tax savings I'm like

26:49
you're going to buy an irrevocable

26:50
contract and you don't need income for

26:52
the tax savings and I always tell people

26:55
please stop letting the IRS live in your

26:56
head for free

26:58
qacs are great but the tax savings

27:02
should be or potential tax savings

27:04
should be an ancillary secondary

27:08
tertiary Choice do you agree with me

27:10
John yes or

27:12
no uh yes I do and I think that the uh

27:16
the dead giveaway is is the name of the

27:20
contract qualified longevity annuity

27:23
contract this is people for people who

27:26
worry about living for a long time we we

27:29
recently did a case with a $100,000

27:31
deposit on a guy in his 60s this

27:34
$100,000 produced lifetime income at age

27:37
85 of over 35,000 a year so you put in

27:42
100 and get back a lot a series of

27:44
Lifetime payments of 35 Grand now before

27:47
you like that sounds like too much to me

27:49
well he had to wait 20 years to get the

27:51
first payment and he may or may not be

27:54
alive at 85 but if you're talking to

27:56
your dad on his 100 birthday and the

27:59
odds of you making it out there are high

28:01
than these are for you well the other

28:04
thing that needs to be mentioned with

28:05
that that I interrupted you to do in

28:07
Stand theity man fashion is that now is

28:10
a dead asset that asset does not have

28:12
any interest rate growth you can

28:14
structure it so that the money will go

28:15
back to the beneficiaries if your Lear

28:17
jet hits the mountain before the income

28:18
starts or you can and you can also

28:20
structure it so that even when income

28:22
starts and when you die whatever money's

28:24
left over goes to the list of

28:25
beneficiaries of the policy knowing that

28:28
um lifetime income is a combinational

28:30
return or principle plus interest so my

28:33
point is yes it is a good Roi John as we

28:37
say because you know it's it's a

28:39
transfer of risk pension but you are

28:42
losing opportunity with the money and

28:43
you have to know this going

28:45
in um but but if you know that going in

28:48
and it's allocated properly and in

28:50
proportion within the portfolio works

28:52
like a charm it's when the too good to

28:55
be true thoughts are entering your head

28:58
that that's when people get caught I

29:00
always tell people when they're young

29:01
like that yes 60 is young for a qac um

29:06
I'd say okay here's the downside here's

29:08
the

29:09
downside um and if you're okay with that

29:11
then we then we can implement it but you

29:13
need to know that it's a downside you

29:14
need to know it's a non-liquid

29:18
strategy so love it but you know you

29:21
need to know the benefits

29:23
and the

29:26
limitations

29:28
yeah I left you speechless that's

29:30
unbelievable I have nothing to add to

29:31
that we're we're seeing them used in

29:35
primarily in income planning uh for

29:38
people who you know are worried about

29:40
gosh what happens if I get to age 85 and

29:42
inflation is eatting away at my fixed

29:44
income now they can turn on uh this CAC

29:48
bucket for Lifetime income and worst

29:51
case scenario is somebody gets your

29:53
initial deposit back most of the

29:55
time and you know when you're

29:57
transferring I'm going to I'm going to

29:58
shock you here Johnny when you're

30:00
transferring risk and you're getting

30:02
peace of mind would you call that

30:04
somewhat of a sleep token that you can

30:06
get you know sleep better at night

30:09
because you have those that income floor

30:11
in place would you would you comment on

30:13
that sleep token is the name of a band

30:16
that Stan and I went to and uh we look

30:19
like uh parole officers

30:22
therea we were DEA

30:24
undercover yeah someone came up to me

30:26
and said you're kind of old to be here

30:28
what are you guys doing here I said get

30:30
away from us we're

30:31
undercover and the guy the guy left

30:34
immediately but yes yeah so but do you

30:37
like are you gonna intertwine sleep

30:39
token into some of the

30:41
presentations I am not prepared to do

30:43
that today I took my sleep token shirt

30:45
off that uh got from the merch shirt

30:47
thank you Stan the anud Man uh but no I

30:51
uh I could I could I will if you give me

30:53
a chance at the end I will come up with

30:55
some way to intertwine sleep token

30:57
with my thought for the day can you do

31:00
that with their the song that I like the

31:02
best and then people can start googling

31:04
it mean this this could almost become a

31:07
cryptic um podcast maybe that's become

31:11
too cryptic Stan and I are working on

31:13
lyrics to a song that that

31:17
saysa I'm developed a taste for you now

31:20
it's something like that and our spia

31:23
sales are record levels is we provide

31:27
guaranteed lifetime income for people I

31:29
I hope we didn't just violate a

31:31
copyright I doubt it I really doubt it

31:35
um so the agent comes to the the person

31:38
sits at their table shows them the

31:40
picture of their kids tries to be their

31:42
friend and then says well if you take

31:45
this upfront bonus we can get you a

31:47
better deal let's talk about replacing

31:49
annuities as these rates are rising

31:52
currently overcoming surrender charges

31:55
and what's called market value adjust

31:57
ments and the legalities of that John I

31:59
want you I want you to hang on the word

32:02
legality of it because I always tell

32:05
people upfront bonuses are candy for the

32:08
stupid um there's not a philanthropist

32:10
at inty companies that that get up in

32:12
the morning the CEOs and say I want to

32:14
give money away have you met any of

32:15
those CEOs that get up and say that

32:18
John you know it looks like I there's

32:21
some sort of vision occurring outside my

32:23
office Portland is supposed to be in an

32:25
atmospheric River today but instead it's

32:27
beautiful sunny day outside and I refuse

32:29
to shut the blind so those of you are

32:30
getting knocked out by my my reflection

32:32
I apologize but uh that was just your

32:35
aura you're like your annuity Aura yeah

32:38
you are getting hit that's good the

32:40
insurance industry did not start the

32:41
bonuses I take that back to the savings

32:43
and loan people that said they would

32:45
give you a free toaster with a deposit a

32:47
toaster is not a bonus a toaster is a

32:49
toaster so the industry has said hey

32:52
bring us your money and we'll add some

32:53
money to your account and as you and I

32:56
both know there is no free money and so

32:59
what's given away up front generally is

33:01
taken away uh in succeeding years

33:04
there's a 100 pennies in the dollar

33:07
sir as they say that there's that

33:10
there's that 132% dollar that we hear

33:12
about all the time but no those are

33:14
those are little carrots and danglers

33:16
that some people just sort of jump on

33:18
but at the end of dayl when

33:22
math when Stan and I do the math we look

33:25
at the totally equation whether there's

33:27
a bonus UPF front or better renewal

33:30
propositions along the way so that the

33:31
end number is highest and guaranteed sir

33:35
that's a dangler do not be distracted by

33:38
the dangler how many times have I told

33:39
you that um so I always tell people

33:43
surrender charges the the com companies

33:46
do not like accepting other annuities

33:48
that you have taken surrender charges

33:50
the only way that it is even possible to

33:54
try to attempt to transfer it under that

33:57
you're taking surrender charges is that

34:00
mathematically it has to be better where

34:02
you're Ma and contractually not

34:04
hypothetical theoretical projecting back

34:06
testing unicorns Chas the butterflies

34:08
mathematically contractually better

34:09
where you're going from where you're

34:11
coming from and even then Johnny some

34:15
companies won't take it right yeah and

34:18
then it's not because the company

34:19
wouldn't want your money and it's

34:21
because The

34:22
Regulators uh are trying to uh police

34:25
sales to make sure that

34:27
an insurance agent's not taking

34:28
advantage of you y by rolling over an

34:31
annuity that's got a surrender penalty

34:33
that's not in your best interests and

34:35
it's it's rare but it does happen

34:38
occasionally where a an annuity holder

34:41
could pay a penalty and move and and

34:44
ultimately end up with a better

34:45
guaranteed result but we have to prove

34:47
that mathematically and go through the

34:49
suitability uh review and every company

34:52
and most companies just don't want to be

34:55
accused of of accepting business that

34:58
has a surrender charge on it and that's

34:59
a recent change in the last what 10 or

35:01
10 years or so no I agree it's it's in

35:03
the business it's called twisting

35:04
churning whatever it's C to me it's you

35:07
can just label it as bad in most cases

35:10
um so you know be very very careful of

35:12
the person saying well you can just

35:14
transfer and get this upfront bonus and

35:16
upfront bonus makes up for it um and

35:19
also understand that if you're

35:20
transferring say an a variable or index

35:23
with an income writer the income writer

35:25
number does not

35:28
transfer hello be careful um with that

35:32
being said Johnny can you give a very

35:35
second grade you know annuities for

35:38
nine-year-old

35:39
explanation of mbas which stands for

35:42
market value

35:44
adjustment no there is no second grade

35:48
explanation for MBA but uh I'm gonna I'm

35:51
going to bring it down so that I can

35:53
understand it um and basically what an

35:56
MV VA is is just an adjustment to your

35:59
surrender value that's based on whether

36:02
interest rates have gone up or down

36:04
since you purchased your annuity so

36:07
annuities that were purchased uh year

36:09
two or three ago have uh an MVA that is

36:13
negative that adds to their surrender

36:15
charge but if you bought your annuity a

36:17
month ago you now have a positive uh MVA

36:20
that would benefit and mitigate Your

36:22
Surrender charge because the 10year

36:24
treasury's moved from 5 to 4 and a half

36:26
as of today taping so it's a surrender

36:29
charge excuse me that helps protect the

36:32
insurance company's investment because

36:34
they've got to go out and make a

36:35
commitment to an investment five to 10

36:37
years typically and if interest rates

36:40
move or when interest rates move their

36:42
investment moves if interest rates go

36:45
way up and people want to leave the

36:48
insurance company and say hey insurance

36:50
company we want our money back and the

36:52
insurance company has to go out and

36:53
break their investment they've got a

36:55
breakage fee and they passed that along

36:58
as a market value adjustment or MVA and

37:01
almost all the competitive MGA policies

37:04
have those interest rates go up after

37:06
you buy it surrender charges are

37:08
probably going to go up as well can you

37:09
say yes to that that is yes interest

37:12
rates go down after you purchase it Your

37:14
Surrender charges are probably going to

37:16
go down after after that correct correct

37:18
you're gonna have hey by the way John I

37:20
just did the nine-year-old explanation

37:22
of it okay wasn't that beautiful that

37:25
was beautiful it was beautiful

37:27
by the way back to the annuity goto

37:29
which is this this even though the title

37:32
of this is annuity State of the Union

37:34
which I thought was really good and I'm

37:35
not going to tear up the script that you

37:37
sent to me like Pelosi tore up trumps

37:40
that time because this is so good but on

37:43
a serious note when I when I like do

37:46
this and for people that are listening

37:47
I'm like stroking the annuity goatee

37:50
does that make me look and appear more

37:52
more intelligent yes or

37:55
no okay the fifth on that come

38:00
on as they say and I I I heard this song

38:03
the other day it it said and I'm I'm G

38:06
to apologize up front you can polish a

38:08
turb you can't polish a turb but you can

38:10
roll it in glitter I think that's what

38:11
it was but anyway cop think about it so

38:14
you can't polish a turd but you can roll

38:16
it in glitter and I think that's what

38:17
John's trying to tell me about the

38:20
stroking and looking smart with an ascot

38:23
and a smoking jacket with theity

38:28
mvas we cut let's talk about suitability

38:32
Johnny

38:33
suitability and it has nothing to do

38:35
with that really fine sport coat what

38:37
what label is that I mean is that like a

38:39
Brooks Brothers what is that yeah my

38:42
wife made this for me she's very ad she

38:44
made it for you seamstress yeah that's

38:48
unbelievable um and so resourceful even

38:51
though you have money you're making your

38:52
own clothes is what you're

38:54
telling yeah yeah can't find anything

38:57
that will fit me as I'm so old but let's

38:59
talk about suitability uh it is it is a

39:02
big deal uh explain that John that's a

39:06
broad that's a 30,000 foot shot take it

39:09
down take it down my brother suitability

39:12
is a term that says the annuity that

39:15
your agent is proposing to you is in

39:18
fact suitable for you based on a number

39:21
of things your age your liquidity your

39:23
understanding your money uh your net

39:25
worth your income and your expenses so

39:28
there's sort of a test that which is why

39:31
sometimes the application process to buy

39:33
an annuity feels a little intrusive so

39:35
the insurance company needs to know to

39:38
to satisfy Regulators in your state that

39:41
the annuity or purchasing makes sense

39:43
for you that it is suitable for you and

39:47
as we I'm making this this uh podcast

39:52
there are new suitability regulations

39:54
being rolled out especially for Ira mon

39:56
money that raise that bar that say not

40:00
only does it need to be suitable but

40:03
your agent needs to be doing the very

40:05
best thing for you possible without any

40:07
consideration for compensation or his or

40:09
her benefit now stop for a second you

40:11
just Define the word fiduciary but

40:13
between me and you if you're in the

40:15
financial business shouldn't you be

40:17
acting like that period do you have to

40:19
put a plaque on your wall no and I and I

40:23
would say that insurance agents in

40:25
general have all always try to hold to a

40:27
standard that this is in your best

40:29
interest yes but it's gotten more

40:32
challenging more teas across and I S do

40:36
uh and the Department of Labor has kind

40:38
of picked a fight with the industry over

40:40
this you know calling some things junk

40:42
fees we'll see where this all shakes out

40:45
but at the end of the day uh insurance

40:48
agents are going to be very transparent

40:51
disclose how much they're getting paid

40:52
that day uh talk about all the different

40:56
Fe features in the product give it to

40:57
you in writing get your signature and

40:59
then of course the industry has a we

41:01
don't want a dissatisfied customer

41:03
policy so you've got a 10day or 30-day

41:05
or even longer free look period

41:07
yep can you ever Envision me and you

41:10
sitting in front of Congress and them

41:12
asking us questions about the annuity

41:15
industry I see you there because I think

41:17
you've been in front of a a congressman

41:20
or woman or two already yes I did yes I

41:23
did I've helped a few Congress people as

41:25
they said

41:27
um try to get rid of of all the

41:29
incentives and and blah blah blah with

41:32
the annuity industry of course as I told

41:34
them when they started it that

41:35
regardless of the clout that they think

41:37
they have they're not going to win and I

41:39
was right but I went through the

41:41
exercise and had fun John walking

41:43
through the Senate building in my

41:45
annuity man logoed sweatsuit tracksuit

41:49
hats turn heads you know I gave the rock

41:52
and roll symbol to all the you know when

41:54
I saw people I knew or or new senators

41:56
and they they just looked at me but um

42:00
but speaking of that would you ever run

42:01
for office John because I'd vote for you

42:03
no no no I'm I'm uh too old some

42:07
skeleton might roll out who knows so I'm

42:10
I'm G hang in there as a squeaky clean

42:14
man you are squeaky clean now me I could

42:17
not run okay let's just say that um

42:22
which leads us to it's very nice segue

42:24
into kind of a current Battle Battle

42:28
Royale in the annuity industry as they

42:31
say between income writers and deferred

42:33
income annuities I always ask people two

42:35
questions what do you want the money to

42:36
contractually do and when do you want

42:37
those contractual guarantees to start if

42:40
you say I need lifetime income and I

42:41
need it to start down the road whether

42:44
that's two years three years four years

42:45
five whatever that is we're down to

42:48
income riters versus deferred income

42:50
annuities Johnny let's get ready to

42:54
rumble let's talk about it well it is a

42:58
big subject because at the end of the

43:00
day uh when a person buys an annuity the

43:04
ultimate goal should be

43:06
income at some point in the

43:09
future and so if that income date is

43:12
within one year then that's an immediate

43:14
annuity and there's no better choice but

43:17
if that income date is two years three

43:19
years five years 10 15 years out in the

43:21
future now you have really three choices

43:25
you can buy AA right the Deferred income

43:28
annuity which is like a a spia that's

43:31
deferred out there it's pretty

43:32
inflexible and you've made an

43:34
irrevocable decision to take income or

43:37
you can buy an accumulation product that

43:39
allows you to take withdrawals for life

43:43
and you start those anywhere from say a

43:45
year or two out to well shoot as far as

43:48
20 years out there's a income writers

43:51
income writer

43:53
y there's actually four ways to do it

43:55
John you mentioned two the other one is

43:57
what I have sweeping the nation you

44:00
another tattoo on the back is uh MGA

44:03
Topia you where you buy a fixed rate

44:05
annuity and then transfer it non-

44:07
taxable vent to an immediate annuity

44:08
that you shop for and then the fourth

44:10
way to do income later is what we're

44:11
talking about is to as Mel Gibson said

44:14
in the movie Braveheart which is one of

44:16
your favorites John I think where it

44:18
says hold hold hold hold and you buy a

44:21
spia at the time you need income so

44:23
those are the four ways none of the four

44:25
better than the other but if you want to

44:27
know what the income amount is going to

44:29
be at that future date then there's only

44:31
two ways to know that contractually and

44:32
that's Diaz and income writers but these

44:35
are commodity products not one's better

44:37
than the other these quotes change like

44:39
a gallon of milk every seven to 10 days

44:40
and you've got to quote all carriers for

44:42
the highest contractual guarantee is

44:44
because what John said earlier in the

44:45
podcast so eloquently is you know these

44:49
companies are trying to fill tranches of

44:51
age ranges and sometimes it's filled up

44:54
and they'll lower the guarantee not to

44:55
attract you and then some need your age

44:57
range really is that simple but right

45:00
now at the time that's taping please

45:02
check it a lot of the times we're seing

45:04
income writers contractually beat the

45:06
Deferred income annuities not saying

45:08
they're better is there a reason John

45:11
that I don't know about because of that

45:14
because back in the day that didn't

45:15
happen

45:17
no I don't think there's a single reason

45:21
uh the the payout rates that insurance

45:23
companies deliver are based on several

45:26
things and some of it's proprietary to

45:28
the company their experience with uh

45:31
their uh mortality block their

45:34
investment Returns the risk they're

45:36
willing to take and the uh the liquidity

45:39
issues that surround these Rider so and

45:43
their expectation on how many people are

45:45
actually going to buy this Rider and

45:46
then and then turn it on or activate it

45:49
so there's a lot of different things

45:50
that drive uh these factors and then as

45:53
interest rates have really changed kind

45:55
of going up over this past year the

45:58
immediate annuity spia players and the

46:00
DF uh pricing people were really quick

46:02
to react we saw rates change weekly with

46:06
some companies the income writer is it's

46:09
got a rate in a brochure it's filed and

46:12
it's it's slower to react so we've seen

46:16
uh changes where it kind of flipflop

46:18
back and forth and if somebody says yeah

46:21
I don't want to make an irrevocable

46:22
decision for this income I'd like to

46:25
have an option

46:26
that if I want to quit and dump the

46:28
income option that I can take a lump sum

46:30
out yeah then the income Rider is is for

46:33
that person I tell people all the time

46:36
it's a fork in the road moment with with

46:37
a def deferred income annuity there's no

46:40
fork with a income Rider you can pick up

46:43
the fork yeah okay and uh you can you

46:46
can trademark that if you want to Johnny

46:48
I know that was that's you're gonna

46:50
think about that as you said earlier

46:52
don't run over the

46:53
fork exactly John I want you to Envision

46:57
something and maybe the this will this

46:59
will disturb a lot of people out there

47:01
when I try to paint this

47:03
picture I want you to Envision me 90

47:06
years

47:07
old okay the goatee will be what 12 14

47:11
inches long at that point in time I'll

47:14
be scile but but still hitting on all

47:19
cylinders as they say but I'm a 90y old

47:22
person Johnny and I need to buy

47:24
annuities

47:26
H what's it look like out there for us

47:28
90 year olds by the way I'm never going

47:30
to reach 90 just let you know I just no

47:33
but before I you're not getting off the

47:35
hook that easy I hope you make 0

47:38
buddy does the world need that though

47:41
then I hope I'm around to see you at 90

47:43
and I can remember who you are uh but oh

47:46
God yeah the uh so as people get older

47:49
and live longer they get out there and

47:52
you know and all of a sudden they're

47:53
they buy a m get 60 70 80 and now all of

47:56
a sudden they're 90 or 91 years old or

47:59
later uh and they need to renew their

48:01
annuity most companies are not accepting

48:04
you know new business transfer business

48:07
uh at that age and the reason is because

48:09
a lot of people who are reach age 90 you

48:11
know don't make 912 three or four and

48:13
the insurance company wants to keep that

48:15
money for a period of year so they can

48:17
try to make a profit so it is important

48:21
as you purchase migas in your 80s and

48:24
later to think about what will happen

48:27
what are my options to renew or transfer

48:30
so a few companies have seen the light

48:33
and like H we are getting a lot of

48:35
people who are in their 85 90 90 plus

48:38
range so yeah we we issued a nity on

48:40
somebody the other day that was born in

48:43
19

48:44
2425 great year John that was a great

48:47
year I don't know much about that year

48:50
but the person was 98 years old so yeah

48:53
people could still do that and you might

48:55
ask why would anybody want an annuity at

48:57
that age it's because they've already

48:59
got an annuity with a big tax buildup in

49:01
it they don't want to pay that tax now

49:04
right if kids are in a lower bracket

49:05
they they want them to inherit it and

49:07
then stretch it out so yeah annuities

49:10
for 95 and up are real thing yeah it's

49:13
kind of interesting as we age as a

49:15
population um I do think that companies

49:18
because they're as you said earlier

49:20
for-profit they're going to look at that

49:22
demographic and say hey uh we can make

49:24
money here and you know we always you

49:27
know we with a lot of the 90-year olds

49:29
that are entering facilities and Etc we

49:32
buy period certain annuities Etc um if

49:35
it's suitable and typically obviously

49:37
the family members are involved Etc so

49:41
um Johnny as we always do that was that

49:44
I mean this is great do not everyone

49:46
here hang in there because John's got

49:48
one more thing to say um as I always do

49:51
so mic drop moment at the end so

49:53
Envision yourself on stage with sleep

49:55
token oh yeah and um you're going to say

49:59
something so incredible walk away you

50:03
just drop the mic so here we go count

50:05
you down five I'm uh I'm on stage and

50:08
I've got to say something with sleep

50:09
token all right no not about sleep token

50:12
but about the annuity industry with them

50:14
in the background with their mou on so

50:16
54 3 2 1

50:18
go having a fixed

50:22
portfolio will let you sleep at night

50:26
while your Investments are up and down

50:28
on the other side of the equation

50:30
without token every night there we go I

50:33
would say that wow that's phenomenal

50:36
there was just guitar in the background

50:38
that would that would do it Johnny hang

50:40
in there with me I want to thank every

50:42
single person on all major podcast

50:45
platforms on the fun with the nties

50:47
YouTube channel that's looking at John's

50:48
phenomenal sport coat that he has on and

50:51
my um Adidas sweatsuit I'm sponsored by

50:54
Adidas and all lot of people don't know

50:56
that um we really appreciate you joining

50:59
us the fun with annuities podcast is

51:01
grown more than I can ever imagine it

51:04
growing and we have fun with it and the

51:07
reason is it's a nons salesy format in

51:09
which we talk about annuities and and

51:11
inform people I'm proud of that as much

51:14
as we joke and we laugh about it John

51:16
and I are very serious about this

51:17
business and we're trying to make it a

51:20
good and safe place for people to go and

51:23
learn um you can go to my site at the an

51:25
man.com run quotes

51:27
247365 and if you want to engage with us

51:30
please do but we're not going to chase

51:31
you we'll treat you like a pro and with

51:33
that being said thanks again for joining

51:35
us and I'll see you next time on fun

51:38
with

51:43
thei