Mark Iwry: Retirement Visionary & QLAC Champion

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[Music]

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foreign

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with annuities where every single week I

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welcome a celebrity guest expert that

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can help you maximize chapter two of

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your life listen learn laugh and love

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every minute of the most unique

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Financial podcast on the planet let's

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get to it

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[Music]

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welcome to fun with annuities I'm your

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host Stan the annuity man America's

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annuit agent licensed in all 50 states

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I'm glad you joined us today and welcome

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to all of you podcast listeners and all

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of you people out there that are

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watching us on the fun with annuities

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YouTube channel whether it's live or

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it's recorded

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I am very very honored to have a special

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guest on today his name is Mark Avery

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and he is so overqualified to be on this

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this podcast it's scary I mean he is

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kind of a hero in the retirement system

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um some people call him a pension rock

1:05
star

1:06
some have referred to him as one of the

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world's 30 top Financial players now

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think about that for a second of all the

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players in the financial World he's he's

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known as he's in that top 30. he's he's

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really a legend and to me he's an

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inspiration as well because one of my

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favorite products on the planet is

1:27
called a culac a qualified longevity

1:29
annuity contract and Mark's fingerprints

1:33
are all over this and some great

1:35
background on that I was the first one

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to write a book on culax in 2014 when

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they first came out and I was traveling

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in Chicago when I when that finally got

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approved and I locked myself in a hotel

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room and wrote the bones for the first

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book that has now there's been twenty

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five thousand or thirty thousand copies

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of the Q like owner's manual out there

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and Counting welcome to fun with

1:57
annuities Mark Avery

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Stan it's a pleasure to be with you I'm

2:02
not overqualified for this interview at

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all you do great work and it's uh uh I'm

2:10
delighted to be Beyond here well I mean

2:13
you went to Harvard you told it Harvard

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you got a law degree I mean

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you're uh your resume is is huge I would

2:22
like to just jump in and maybe you can

2:25
give the listeners and viewers the

2:28
background of culac your involvement and

2:31
how it all came to pass and then talk

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about how you've changed it for this

2:36
year at the time of this taping 2023.

2:38
yeah sure so uh Stan as you know but to

2:44
remind your viewers culac it's a

2:47
qualified longevity annuity contract and

2:52
the way we came to this back in 2012

2:57
2014.

2:59
was to recognize that the qualified

3:04
planned World 401K is tax qualified

3:08
retirement plans and the IRA world

3:12
did not have a deeply deferred

3:17
annuity

3:18
what what people in the insurance

3:21
industry uh often called an advanced

3:25
life deferred annuity an Alda or a

3:29
deeply deferred annuity or longevity

3:31
insurance is another way to describe it

3:34
and I thought you know having been

3:37
just Vaguely Familiar with those

3:40
products

3:41
uh and those being relatively Niche not

3:46
sort of a you know a main a large seller

3:51
in the market

3:52
uh I thought it would be really helpful

3:55
for people trying to save for retirement

3:59
and have Security in retirement a

4:02
guaranteed lifetime income if they had

4:04
this option not intended to be uh the

4:08
only best necessarily the best way to

4:12
provide guaranteed income for yourself

4:14
for life but one good option a kind of

4:19
thinking person's annuity if you will

4:22
and so we couldn't have it in the ira or

4:26
the 401K World why because of the

4:30
required minimum distribution rules you

4:32
know the rmd rules that say that once

4:35
you reach age 72 used to be 70 and a

4:39
half

4:39
you have to start taking out some of

4:42
your retirement savings uh gradually in

4:46
order to pay tax on the amount that you

4:49
accumulated over the rest of your

4:51
lifetime or life expectancy those rules

4:54
actually did not sit well with the idea

4:57
of a deeply deferred annuity because if

5:00
you used your account balance

5:02
When You Reach age let's say 72 when

5:06
those rules kick in

5:08
to

5:09
part of your account balance even to

5:12
defer an annuity to buy an annuity pay a

5:15
premium to an insurance company

5:17
and the annuity isn't going to start

5:19
paying you until you're 85 years old or

5:22
maybe 80 years old what happens in the

5:25
meanwhile

5:26
with that premium it's supposed to be

5:28
taxed gradually you're supposed to be

5:30
taking it out bit by bit and paying tax

5:33
on it well that doesn't really work with

5:36
something that you're turning over to an

5:38
insurance company for 15 or 20 years

5:42
maybe 10 years and letting them grow it

5:46
and then promise you a fixed guaranteed

5:49
dollars per month benefit for the rest

5:52
of your life

5:53
starting at 80 or 85. so what I tried to

5:58
do

5:59
was make it possible for people to have

6:01
these

6:03
deeply deferred annuities deferred until

6:05
age 85 or thereabouts

6:08
without having to worry about the

6:10
required minimum distribution rules

6:12
these rmds and we just created by

6:16
regulation

6:18
a rule that said if you buy one of these

6:21
deeply deferred annuities

6:24
you can get out of the requirement on

6:26
distribution rules for that amount of

6:29
Premium that you pay so there's an extra

6:33
tax break for people in addition to the

6:36
normal value of having a lifetime

6:39
guaranteed income right you also get out

6:42
of the rmd rules for the amount that you

6:45
invest in this and that's how we were

6:47
able to do this in the now 20 trillion

6:51
dollars

6:53
401K 403 b and Ira

6:57
market and hold that thought for a

6:59
second because when I first heard of

7:02
qualified longevity annuity contracts

7:04
first thing that hit me is all of the

7:06
stupid people out there that say never

7:07
put an annuity inside of an IRA which is

7:10
hilarious because this is the the

7:13
quintessential example of qualified Ira

7:16
longevity annuity contract number two

7:20
um with the stat that you just provided

7:21
in all of these retirement deferred

7:23
assets I I quickly made a prediction

7:26
that hasn't come true yet but it will

7:27
that qualifying longevity annuity

7:30
contracts if you take all the types of

7:31
annuities out there would be the number

7:33
one seller period end of story

7:36
eventually it will be once the people

7:39
are

7:41
um educated and also the financial

7:43
advisors I do a lot of speaking Mark as

7:46
you know and a lot of these big Banks

7:48
and Brokers firms bring me in once they

7:50
boo and all the stuff's throwing at me

7:52
and we clean up the the you know the

7:55
stage then I'll say listen if you have a

7:57
client with an IRA and you're not

7:59
quoting them a qualified longevity

8:01
annuity contract please explain to me

8:03
how you're a fiduciary so without that

8:05
all being said

8:07
one of my questions to you and it will

8:09
get there I think me and you both will

8:11
be in the parade in DC right in the back

8:13
of an old Cadillac waving to the people

8:15
as they applaud the culac but that's

8:18
down the road how hard was it to twist

8:21
the arm and as I show say show paintings

8:24
to the blind people in this case the

8:25
blind people would be Congress how hard

8:28
was it to get it through initially

8:30
well it was really surprisingly easy

8:34
stand because I really I didn't go to

8:37
Congress at all well that's smart yeah

8:40
that's smart we

8:42
we concluded I had a I have to have a

8:45
terrific staff at uh the U.S treasury

8:48
Department and uh I put to them

8:52
the question

8:54
could we do this on our own buying

8:57
regulation without a change in the

9:00
legislation without Congress having to

9:02
be involved wasn't trying to avoid

9:05
Congress just because we were doing

9:08
something they wouldn't approve of on

9:10
the contrary I thought they would find

9:11
it was great but if they did it

9:14
themselves it would take them years

9:16
probably to actually get no doubt no

9:19
doubt they may not get it done right so

9:22
we concluded actually in very honestly

9:25
and in good faith that the statue gave

9:28
us Authority there was nothing about the

9:31
law that Congress had put in place

9:34
regarding any of these things annuities

9:37
retirement benefits the required minimum

9:40
distributions there's nothing about that

9:42
long that constrained us prevented us

9:45
from making this annuity available as a

9:49
product to see whether the market wanted

9:51
to to take it up and so we issued a

9:56
proposal by regulation we told everybody

9:59
publicly that we're thinking of

10:02
making this product available

10:04
uh we laid out the rules that we thought

10:08
should apply all consistent with

10:10
existing law

10:11
but existing log provided some latitude

10:14
and no one had ever really thought you

10:17
could do this

10:18
by regulation but we became convinced

10:21
that it wasn't even a close call if it

10:23
was too close a call I wouldn't have

10:25
done it because things certain things

10:27
are supposed to be done by Congress and

10:29
they have the authority to do them and

10:31
they delegate to The Regulators within

10:34
the broad bones of what Congress has

10:37
enacted so The Regulators should not

10:40
exceed their Authority and therefore we

10:43
looked hard at that and decided no we're

10:45
not exceeding our Authority at all if we

10:47
do this this is just an opportunity that

10:50
hasn't been perceived before so we said

10:52
to the market you can do this you can

10:56
have this kind of annuity and you can

10:59
exclude the premium

11:01
from these age 72 used to be called age

11:05
70 and a half sure required

11:07
distributions and that was the way that

11:11
Congress did not get involved until

11:14
a few months ago when they expanded it

11:17
in the recent secure 2.0 legislation did

11:21
you and the expansion is now two hundred

11:23
thousand dollars is the limit before

11:24
there was some formulas involved we

11:26
won't even go into those because it's

11:28
confusing and it was confusing but now

11:31
it's 200 000 which I think is fantastic

11:33
and I hope just from an incrementalism

11:36
strategy that it continues to go up

11:39
because in a pensionless world as you

11:42
know Mark you know people need to create

11:44
their own pensions in combination with

11:46
the best annuity on the planet which is

11:48
Social Security and I think that was

11:50
your your passion underline that did you

11:53
have any blowback or concerns from the

11:56
IRS not getting their

11:59
additional money from the rmd since qlax

12:02
are not included and as part of that r b

12:04
calculation what did they say to you

12:06
mark did they throw a dart at you did

12:08
they kick you out what did they do we

12:10
the treasury is like a kind of parent

12:13
company for the IRS

12:15
[Laughter]

12:17
wait a minute that's the greatest that's

12:20
the greatest thing I've ever heard the

12:22
treasury is the parent company for the

12:25
subsidiary called the IRS is what you're

12:27
saying correct technically that's the

12:29
case and in fact it really is the case

12:31
because wow that the IRS commissioner

12:34
stand the head of the IRS we're talking

12:37
about a big subsidiary like 85 000 90

12:41
000 people work you better believe it

12:43
yeah the CEO of the IRS reports to the

12:46
secretary the treasury and I also

12:49
reported directly to the Secretary of

12:52
the treasurer I was senior advisor to

12:54
the secretary and by the treasury group

12:58
that deals with tax policy

13:02
is like a a sibling to the IRS right

13:06
it's part of the parent company but

13:08
everybody it's a small group of lawyers

13:11
and economists and they work closely

13:14
with the IRS and it's like we defend the

13:17
IRS when they need to be defended which

13:19
is often uh from unfair criticism I

13:23
understand we work we work the treasury

13:26
I'm not there any longer works really

13:28
hand in glove with IRS so there isn't

13:31
any you know there aren't darts going

13:33
back and forth we're we're so close that

13:36
you know if they have issues with

13:38
something we hear about it right at the

13:41
beginning you know and we start to take

13:44
it into the treasury people take it into

13:46
account saying yeah I hadn't thought of

13:48
that or they may be right or they've got

13:50
an administrative problem because IRS is

13:53
in charge of of course actually

13:56
implementing and administering the tax

13:58
laws and collecting the tax so there's a

14:01
lot of things when it comes to that

14:03
they're in charge you know whether you

14:05
got audited whether somebody's tax cuts

14:08
someone's tax return is reviewed how

14:10
much of a refund they get all of that

14:12
the treasury doesn't get involved in

14:14
it's all IRS because it's feeling

14:16
individuals or companies or businesses

14:19
and but but when it comes to policy like

14:23
should we have a new vehicle like this

14:26
to help people save for retirement or

14:29
should we issue a regulation or a rule

14:31
of a certain kind that will apply to the

14:34
whole Market that's when treasury works

14:37
with IRS in collaboration and treasury

14:41
kind of has the last word uh on a policy

14:44
issue so the IRS believe it or not

14:48
uh IRS was very supportive and they they

14:54
are not oriented Stan and I think many

14:56
of your viewers may be a little

14:59
surprised by this

15:00
they're not oriented to get as much

15:03
revenue as possible out of the American

15:06
taxpayers that's a hard that's a hard

15:08
sell Mark but go ahead yeah let me

15:11
explain this these are people whose job

15:13
is not to maximize the amount that they

15:16
can squeeze out of taxpayers their job

15:19
is to follow the law and implement the

15:22
law Congress writes the tax code God

15:25
bless them such as it is

15:28
but Congress writes the tax code and the

15:32
IRS administers it so they're not

15:35
supposed to and they don't even try to

15:38
collect more tax than the law says you

15:41
owe and that's why we get refunds and

15:44
sometimes we get corrected on our

15:47
individuals like us on our tax returns

15:49
if we do something wrong and actually

15:52
it's it's would it was to our disfavor

15:56
like we paid too much tax

15:58
they'll give it back you know they'll

16:01
say that's wrong you don't know us that

16:03
much so my point is

16:05
these people at IRS you know out of 90

16:09
000 85 000 people obviously you can get

16:11
all kinds of human beings but most of

16:14
them the vast majority

16:16
are honest straightforward

16:19
people who are trying to do their job

16:21
and their job is administered the tax

16:24
law according to the law collect the

16:27
right amount of tax not the most tax not

16:31
less than the right amount but the right

16:33
amount so that everybody is supposed to

16:35
know that their neighbors are paying we

16:39
hope the right amount of tax and

16:41
therefore you are not being a sucker

16:43
when you pay the right amount of tax uh

16:46
even if you think you could get away

16:48
with less and so they like this idea a

16:51
lot they understood good that part of

16:54
part of what they do

16:56
you know is administer the pension and

16:59
retirement 401K Ira laws to the extent

17:04
that those are in the tax code

17:06
and so they get that our

17:09
private pension system is trying to

17:12
encourage people

17:14
to do what you're trying to encourage

17:16
people to do you know and have a secure

17:18
dignified retirement safe enough and

17:21
invest or provide Arrangements that will

17:25
protect them from poverty and retirement

17:28
you know supplementing as you put it the

17:31
best

17:32
annuity in the world Social Security not

17:34
enough for most of us by itself it's not

17:37
intended to be

17:39
enough for you know most middle class

17:41
people and so they they liked it

17:43
interesting I um and that's and that's

17:46
good news and it makes sense when he

17:48
described the hierarchy of Treasury to

17:50
IRS they're just implementing a good

17:52
idea I think the other thing too is and

17:55
I've said this for a while if the culax

17:58
because they didn't you know follow the

18:00
stand the annuity man prediction of

18:02
being an overnight sensation I do think

18:03
there'll be a 10-year overnight

18:05
sensation I think in about a DEC in

18:07
about a decade from 2014 you know I

18:11
think in a couple years two three years

18:14
um

18:15
QX are going to hit their stride because

18:17
the 200 000 amount is getting people's

18:20
attention

18:21
I'm just telling you from a person that

18:23
is licensed in all 50 states has

18:25
thousands and thousands of clients and

18:27
thousands of thousands of people with

18:28
culax

18:29
it's getting their attention it's now a

18:32
significant amount that's going to

18:34
produce a significant lifetime income

18:36
stream and what I was getting at is I

18:38
also think that people are concerned

18:40
about social security

18:42
I think the culac growth and popularity

18:45
will help

18:48
I think less than some Demand on Social

18:51
Security and give hopefully politicians

18:54
some guts and fortitude to possibly

18:57
update

18:59
that program to make it more sufficient

19:02
for the long term do you agree with that

19:06
I'd like to think that it will

19:10
go that culex will go that way Stan that

19:14
it will become much more popular and

19:18
widely used over time and I think one

19:21
reason

19:23
that it hasn't been that widely used and

19:27
you know this so well

19:29
uh one reason is that the 401K plans the

19:34
institutional retirement

19:37
programs

19:38
they have tended to want to see that you

19:43
lack be made available to their

19:46
participants in an IFA

19:49
in other words the plan could offer a

19:52
culack a 401k could say

19:55
you know as you know you can we can have

19:57
an annuity in the plan

19:59
as an option for people to select it

20:02
could include a culac but they've been

20:05
gun shy traditionally about choosing

20:09
which insurance company and which

20:12
contract and is the premium a fair deal

20:16
for our well it flies in the face of

20:19
fiduciary I mean it flies in the face of

20:21
providing all

20:24
um you know quoting all carries to find

20:25
the best contractual guarantee my

20:27
concern about that direction that 401ks

20:32
are going in are the big you know the

20:34
people that pay you know it's kind of a

20:37
pay for play if if they get on the

20:39
platform then people are going to choose

20:40
that culac that doesn't mean it's the

20:42
best one because they're commodity

20:43
problems so I mean I'm concerned about

20:46
well yeah my 401k offers a culac well

20:49
how many one or two that doesn't work

20:53
that doesn't work in my opinion and

20:55
that's I think the issues

20:58
going forward I think a more

21:01
I think a better strategy for the

21:03
industry is not to focus on the 401K

21:06
assets is to focus on the traditional

21:08
IRA or rollover Ira assets for qlex and

21:13
of course no one listens to me but I'm

21:16
telling you that's the way to go do it

21:18
because

21:19
yeah I think you're right uh and the

21:22
industry has actually

21:24
you know they've thought that as between

21:27
the qualified plan because they're

21:30
afraid of the point you're raising

21:32
they're afraid to choose one or two yep

21:34
not all of them but they're concerned

21:36
you know why should we stick our necks

21:38
out as fiduciaries and say we'll buy

21:41
this culac rather than that qlack and

21:43
they have not yet

21:45
developed there are a few you know

21:48
marketplaces there's some people trying

21:50
without mentioning names sure but but

21:53
but many of the planned sponsors aren't

21:56
familiar with those or they're gun shy

21:59
and so they're not used to the idea that

22:01
they could offer

22:03
any culac out there you know we're just

22:06
offering this commodity right digital

22:08
can choose which one they want uh so the

22:12
the idea in the in the market

22:16
typically has been

22:18
doing what you're doing that is selling

22:20
them out of IRAs

22:22
yes

22:24
and the

22:26
uh the reason I think that might

22:29
actually change

22:31
a bit now is that the law has changed

22:35
two relevant ways one it's a little

22:38
easier for a plan fiduciary right to

22:42
select annuities now they could still do

22:45
something like say here's 10 culax you

22:48
know we've vetted them all they're out

22:50
in the market they all seem okay you

22:52
choose which one you want

22:54
uh they'd still have a fiduciary duty to

22:57
make sure that those ten were all okay

22:59
you know if they said

23:01
every Q like in the market here it is

23:04
you could choose it they'd still be

23:06
worried that maybe there's One Bad Apple

23:09
overpriced or something like that so but

23:13
they have less fiduciary exposure than

23:15
they used to when offering an annuity

23:17
and a plan and the other reason I think

23:19
this may shift a little more not away

23:23
from IRAs but toward plans in addition

23:27
to offer culax is that we had a rule in

23:31
our 2014 regulation when we first

23:34
launched the culec that said you

23:37
couldn't use more than a quarter of your

23:38
account balance to buy it

23:41
now why why say that if you've got an

23:45
account balance of a million dollars

23:47
why should we say you're limited to 250

23:50
000 and actually then there's a dollar

23:52
limit also sure which started out at 125

23:56
000.

23:57
index to inflation

23:59
uh the reason we did that both limits

24:03
was going back to our first Point here

24:07
that it was without Congress that we

24:10
created this product if

24:13
we let too much revenue out the door

24:17
in general in the market it wasn't IRS

24:20
that would complain really they just

24:24
have to follow the law

24:26
uh now there they would you know say

24:29
wait a minute are we really following

24:31
the law if a lot of Revenue was lost

24:34
because we gave an exemption from the

24:36
required minimum distributions who are

24:39
too much

24:41
uh money Congress would legitimately say

24:46
wait a minute that's our job you know if

24:48
we want to give tax advantages and it's

24:52
a material difference from what we

24:54
already gave

24:55
in this in the existing law we should do

24:58
that and not the not The Regulators see

25:01
what I love about culax Mark is that it

25:05
is a classless

25:08
um political party lists yeah

25:12
um

25:13
melatonin-lis yeah I mean

25:16
product that will benefit every single

25:19
American on the planet with the social

25:21
security number period now the argument

25:24
from there is some people's IRAs are

25:26
bigger than other people's IRAs or

25:28
whatever yeah that's a whole other

25:30
discussion but I that's the reason I'm

25:33
so passionate about it being the top

25:36
product it being the go-to product it

25:39
being the product that if you don't know

25:40
own any other annuity types you're going

25:44
to own that one because it's eerily

25:46
similar

25:47
to Social Security and how Social

25:49
Security works and um to me I think

25:53
qualified longevity annuity contracts

25:55
and we've had calculate that calculator

25:57
on my site forever it's an emotional

26:00
product and what I mean by that Mark and

26:02
everyone listening

26:03
is it gives you the ability

26:06
to take your personal IRA and attach

26:10
attach your spouse as a lifetime income

26:13
participant with you that is an

26:16
emotional decision and most of the

26:19
people that choose culax with us that

26:22
I've spoken with and we have a huge

26:24
staff and you know but I hear this is

26:27
that

26:28
one of the spouses either male or female

26:30
is very into markets and very into

26:33
investing but they also know that when

26:36
they pass their spouse is probably not

26:38
there's it's a very it's a rarity to

26:41
have two spouses that are traitors

26:44
they you know giving my my example is my

26:47
wife Christine's been married to me for

26:48
35 years could care less just wants to

26:50
go see the kids and the grandkids

26:52
that's why a culax in place so that

26:55
that's going to happen she's going to

26:58
have income coming in in addition to the

27:00
other income things and I think it's an

27:02
easy marketing play if they would just

27:04
make me Czar of the annuity industry

27:06
Mark for just a couple years

27:08
it is to is to talk to

27:11
The Breadwinner or the investor in the

27:14
family whoever that is male or female

27:16
and say you know eventually you're not

27:18
going to be able to do it so you're

27:20
going to have to set things up and this

27:22
is the best way to do it with a portion

27:24
of your IRA assets

27:27
I want to ask you kind of a different

27:29
more nuanced question which is

27:33
you're on the policy side of it and the

27:35
structuring side of it and the in

27:37
essence the Ivory Tower thinking side of

27:40
annuities and how they should be

27:42
implemented period

27:45
I need you to take that hat off for a

27:47
second and and give some commentary on

27:49
the annuity industry itself for what I

27:52
feel missing the boat

27:54
on what is good about some of these

27:57
products

27:59
well uh Stan I think that in part

28:04
they're not giving enough

28:07
attention to the spousal protection

28:12
right that agreed the point you just

28:14
made I mean if you go to Homer Simpson

28:17
and you ask him whether he wants to buy

28:19
uh culac

28:21
at first he's going to say what the hell

28:24
I've had so many beers and so many

28:27
cheeseburgers in my day you know I'm

28:29
probably not going to live to ever see a

28:32
better side of age 80 right so how

28:35
should I throw my money away give it to

28:37
an insurance company uh

28:40
you then remind him of large

28:43
right you know she's lived a virtuous

28:45
life in spite of you and she's going to

28:48
live to a hundred uh and you need to

28:52
think about providing for her

28:54
and that you know I think that is

28:57
some a sales approach that you don't

29:02
hear enough of in the market second

29:06
I think the problem also is partly

29:10
that the virtues of the insurance

29:13
industry

29:14
the ability to provide a guaranteed

29:17
lifetime income

29:20
that is a known amount a determinable

29:24
amount whether you increase it two

29:27
percent a year whether you're able to

29:29
actually index it for inflation or just

29:32
approximate that or even if you can't do

29:36
that you say look we can give you two

29:38
thousand dollars a month and sure

29:40
inflation might eat away at that you

29:42
have the option of doing more if you're

29:45
concerned but you know what you're

29:47
getting

29:48
and it's regulated by the states

29:51
that that uh that is not

29:56
the most profitable

29:59
line of business

30:01
uh in the eyes of many people in the

30:04
industry that the distribution channels

30:08
it's so myopic Mark it's such a horrific

30:12
thought gosh

30:15
you know I could sell this black model

30:18
T4 that is really reliable works

30:22
perfectly well it's very transparent

30:25
there's not a lot of hidden nooks and

30:29
crannies or options or I might end up

30:32
overpaying because I said okay give me

30:35
the you know the fancy this or that

30:37
feature it's it's a plain vanilla

30:40
transparent product that could actually

30:43
work in the free market that we all

30:47
aspire to have in this country where

30:49
people could look at the product and say

30:52
okay I want to compare that to the

30:54
competition

30:55
what is the value you know what are the

30:58
prices and what am I getting and you can

31:01
do an Apples to Apples comparison so for

31:03
those annuities Write the basic income

31:07
annuity that pays X dollars a month sure

31:10
for the rest of your life or maybe it's

31:11
for 20 years or 10 years and also let me

31:14
let me interject culax can be structured

31:16
the majority that we sell are with cash

31:19
refund meaning that the evil annuity

31:21
company's never going to keep a penny

31:22
even though they're contractually

31:24
obligated and on the hook to pay as long

31:26
as you are breathing which means there's

31:28
no Roi until you die I mean it is a

31:31
straight transfer risk a lot of people

31:33
out there think that when you die the

31:36
evil company evil annuity company keeps

31:38
the money that's one of many ways to

31:39
structure it but the majority of people

31:41
out there that's worked hard for their

31:42
money they want to make sure that 100 of

31:45
it is going to go to somebody in their

31:47
family the other thing that I tell

31:49
people all the time by the way if I can

31:51
jump in yeah

31:52
we originally designed the culac to be

31:55
as simple as possible and when we first

31:59
proposed it I was not sure whether to

32:02
allow that feature you had to I thought

32:07
I didn't want the industry to come and

32:10
say we have to have these 25 bells and

32:13
whistles on this in order to make it

32:16
attractive so we started it out Bare

32:19
Bones as a proposal not not the real

32:21
sure

32:22
and I put the question to them do we

32:25
need a death benefit

32:27
and I I knew what the answer was going

32:29
to be but we we wanted to ask it in a

32:32
rigorous way and get all people

32:34
providing the evidence you know without

32:37
taking for granted they'd be able to do

32:39
it because there are lots of types as

32:40
you know and then you can get into you

32:43
know I would have personally squashed it

32:45
nationally I would have squashed it if

32:47
you didn't provide that death benefit

32:49
right and that's well that's what we

32:51
found out I talked to the people I knew

32:53
in the industry and read all the public

32:55
comments they filed the case that you

32:59
made that honestly this isn't a play the

33:03
the refund of Premium but the person

33:07
dies

33:08
if they don't have a beneficiary who's

33:11
going to keep getting you know the life

33:13
payments sure uh the refund of Premium

33:16
is essential to selling so you can get

33:19
away from that fear that the insurance

33:21
company you know will keep all my money

33:24
if I get hit by the proverbial bus when

33:26
I leave the the sales and it's essential

33:30
for

33:31
people that aren't well versed in

33:33
annuities to feel comfortable with the

33:35
fact that the money doesn't go poof when

33:37
they die and that is such a hurdle that

33:39
we still have to deal with the other

33:41
thing that I think is is hurting the

33:43
culac is I would probably go on record

33:45
to say that either 60 to 70 percent of

33:48
all financial advisors in this country

33:50
do not know what a culac is

33:53
really absolutely and what I tell people

33:56
all the time when they're looking for

33:57
advisors that obviously I'm the annuity

34:00
advisor but for their non-annuity assets

34:02
I'm like here's how you here's how you

34:04
can tell if that person's worth a crap

34:06
ask them what a culac is

34:08
and if they don't know walk out because

34:12
they're not acting as a fiduciary

34:13
they're not up to speed on what's good

34:16
for you and if they're going to manage

34:17
your IRA assets and they don't know what

34:19
a culac is that's a big time red flag

34:22
and for people that are listening and

34:24
viewing on this do that for your advisor

34:27
right now go in there and say do you

34:28
know what a cue like is if they say no

34:30
not really and I hate all annuities then

34:32
you you need to fire that person okay

34:35
that's how

34:37
important it is for

34:40
the advisors to understand what it is

34:42
here's the other thing Mark and this

34:43
will never happen but in my dream world

34:45
of being the annuities are if the

34:48
compensation that's built in the

34:49
commissions that are built into all

34:51
annuities were the same

34:54
then culax would be number one right now

34:57
the other thing too that's a problem

35:00
Mark for for the financial world that I

35:04
used to come from which was Deanwood or

35:05
Morgan Stanley payneweber UBS that is a

35:07
a rap fee world where they want to

35:10
charge a fee for managing the assets

35:12
when you start going to these Masters of

35:15
the Universe and saying here's a culac

35:17
that's actually good for the customer

35:18
but you can't charge a fee on it

35:21
they're going to ignore it even though

35:24
it's in the client's best interest those

35:27
things have to happen on an

35:29
Institutional level and a financial

35:31
advice level so that it makes sense for

35:35
advisors fiduciaries Masters of the

35:38
Universe whatever they want to call

35:39
themselves to eagerly proactively

35:43
offer culac quotes to every single

35:46
client they have with an IRA we have we

35:49
have some uphill climbing to do mark

35:51
well to that point Stan one of the very

35:57
experienced people in the industry

36:01
confided in me a couple years after the

36:05
kill act came out when I was asking you

36:08
know why isn't this getting more take up

36:10
I mean I've got

36:12
tremendous feedback and comments from

36:15
the insurance companies from policy

36:18
people from consumer type uh

36:22
consumer rights people this is a great

36:24
idea this is really going to be terrific

36:27
like what you're saying and this guy

36:29
said you know

36:30
Mark don't tell anybody

36:33
you know who where you heard this

36:36
but

36:37
you know there are a lot of people who

36:39
like it but the reason it's not more

36:42
popular is that it doesn't have enough

36:44
profit buried in in the form of

36:47
commissions

36:48
and that kind of fees that the customer

36:53
can't see and that because it doesn't

36:56
have the complexity the nooks and

36:58
crannies where you can bury some feeds

37:01
here and some fees it's two plain

37:04
vanilla it's too Pro consumer Mark is

37:07
too good for the consumer yeah that's

37:10
insane and that is the reason that the

37:13
annuity industry continues to have this

37:16
Cloud over it for bad selling practices

37:19
and that person that said that

37:22
they're right but it's such a short-term

37:25
short-sighted view of life and of

37:29
business that they've just I mean if the

37:33
industry is on top of it

37:35
you know we wouldn't be having this

37:36
podcast and and you on and and and they

37:40
have opened the door wide open for

37:42
someone like me that totally gets it and

37:44
is a truth teller and love Simplicity

37:46
just to recommend this to pretty much

37:48
every single person

37:50
um where do you see it headed I mean

37:52
we're at two at the time of this tape

37:54
you can check the date

37:55
two hundred thousand dollars is the

37:57
limit per Ira per qualified account you

38:00
know if a husband had one or wife wanted

38:02
they both can have 200 000. where do you

38:04
see that headed mark

38:06
well first of all I think Congress is

38:10
not going to come back and raise

38:13
the limit or do probably do other kind

38:16
of legislation in this area

38:19
probably in the next couple of years got

38:21
it and where I'd see it headed is that

38:26
by raising the limit which we couldn't

38:29
do by regulation because that does give

38:32
away

38:32
more Revenue you know billions of

38:35
dollars more sure which is good because

38:37
it's a good investment insurance

38:38
department security so we left it for

38:41
Congress to take this model and dial it

38:45
up

38:45
and raise that limit as much as they

38:48
feel they can afford

38:50
and so that's what happened when it went

38:53
from where it was 100 and some thousand

38:56
to two hundred thousand and I think it's

38:59
going to get more attention

39:01
we also stand by getting rid of the 25

39:05
limit thank you for that that too but

39:09
the message of that I think is important

39:12
and I'd be interested in your reaction

39:14
to this

39:16
we put the limit in because the 25

39:18
initially because it helped prevent us

39:22
from giving away too much revenue I I

39:24
understood why you did it we could tell

39:26
Congress you know right make a cool

39:29
product available but on balance you're

39:32
not going to have billions of dollars

39:34
going out of the the fist because of

39:38
this product you can look at it be

39:40
inspired by it and expand it if you want

39:43
to and you can spend that money and in

39:46
fact we'd recommend that you do that but

39:48
that's up to Congress so I think what's

39:51
going to happen is that we're going to

39:52
get more take up now and more

39:56
recognition

39:57
that this is a a sensible product for

40:01
most people if somebody's single and

40:03
they know they're kind of short they've

40:06
got a short life expectancy

40:08
you know they've got a they got a very

40:11
bad diagnosis

40:13
and they're you know 67 years old and

40:16
the doctor says you know if you're lucky

40:18
you've got two or three years that's

40:20
about it okay that's you know I don't

40:23
see that it's for them but unfortunately

40:26
there aren't that many people in that

40:28
situation if they are married

40:31
and they have a spouse who's potentially

40:34
going to live a long time then you know

40:36
they can buy it for their spouse or the

40:38
spouse combined so I do think that you

40:41
know for most people

40:43
especially with the death benefit

40:46
which is right a return of the premium

40:49
you paid without any growth that's all

40:52
right as long as it's clearly disclosed

40:54
you're not going to get the interests or

40:57
other values you're buying a pension

40:59
period you're just getting back yeah

41:02
you're getting back the amount you paid

41:04
in yeah plus if you draw it to zero the

41:08
annuity company's on the hook to pay

41:09
here's what I here's where the turning

41:11
point is going to happen now if I was a

41:13
politician I'd never be one because I

41:15
don't want to take the DraStic pay cut

41:17
but and I'm also sane but if I was

41:20
running for office nationally I would

41:23
run on the Social Security culac

41:25
platform for Lifetime income I would run

41:27
on a lifetime income platform and I

41:29
would educate people on this and it's

41:31
going to take someone to do that or a or

41:34
a journalist that actually knows what

41:36
they're talking about to ask the

41:38
presidential candidates at a like let's

41:40
just say it's the Democrat or Republican

41:43
you know there have all the candidates

41:45
on there

41:46
um I have a question what is your stance

41:48
on Social Security payments that are the

41:50
best annuity on the planet and also the

41:53
new Q like the qualified longevity

41:55
annuity contract that Mark Avery has so

41:58
put out and he is a fantastic person why

42:01
aren't we promoting the culac and Social

42:05
Security as dual lifetime income uh

42:09
payments for all of the people out there

42:10
with IRAs then shut up and see what

42:14
happens it's going to take that type of

42:17
event for people to go hey what's clear

42:19
like what's Q like well hey what's queue

42:21
like and then

42:22
it's game on but that's what it's going

42:25
to take and I might have to show up at

42:27
one of these um debates

42:29
and ask that question mark it would be

42:31
beautiful but it needs to happen in that

42:34
type of Arena you know because I I live

42:37
in part-time in Ponte Vedra Beach and

42:39
Ron DeSantis is from here I don't care

42:40
either way I'm not a Republican or

42:42
Democrat that matter but if I'm ever

42:44
close by and I see him out there on the

42:46
stomp I'm going to ask him Hey Ron what

42:49
do you think about qualified longevity

42:51
annuity contracts Hey Joe Biden what do

42:53
you think about qualified longevity

42:54
annuity contracts we have 20 trillion in

42:57
deferred Ira type assets wouldn't it be

43:00
good if we promoted everyone to create

43:01
their own pension in conjunction with

43:04
that fantastic pension that the

43:06
government provides called Social

43:07
Security Mark it's got to be that

43:10
chaotic and aggressive of a moment for

43:13
us to get out there and for you to get

43:16
the do of what you've done

43:19
Stan do you think that it helps

43:22
that the culac because it's deferred

43:27
from the time you buy it which could be

43:29
you know whatever it could be when

43:31
you're 58 it could be when you're 68 it

43:34
could be when you're 71 from the time

43:36
you buy it until the time it starts

43:38
paying

43:39
when you're 85 or 82 or 80

43:43
the fact that that builds up right that

43:47
the insurance company has the

43:49
opportunity to take the premium

43:51
and to put it into their general account

43:53
and invest it bonds and sure you know

43:57
whatever reasonable rate of return on it

44:00
I promise you that no matter what they

44:03
get by way of their investment returns

44:06
they're making you a fixed promise of X

44:09
dollars a month when when you reach that

44:12
age of 80 or 85 the fact that you've got

44:16
that delay

44:18
means as you know that the amount that

44:22
you get per premium dollar that you pay

44:25
the insurance company It's a larger at

44:28
least nominal amount right because the

44:30
money has time to grow within the

44:33
insurance company sure so you can spend

44:36
less of your account balance if you're

44:38
nesting

44:40
price tax dollars you might be able to

44:42
spend 25 of X or 15 of X or if you want

44:47
you know half of x on this annuity

44:51
product and keep the rest if you want to

44:53
keep the rest to manage yourself to

44:56
invest to to you know be take more risks

45:00
with

45:00
you know that you have this guarantee to

45:03
fall back it's part of the income floor

45:05
mark

45:06
and the income floor is Social Security

45:09
pension if you're so lucky and this

45:12
additional pension using qualified

45:14
longevity annuity contracts I tell

45:16
people all the time you know let's look

45:18
at the downside in their minds of what a

45:21
culac would be and it would be the

45:23
non-trackable interest rate during the

45:25
deferral time period but what I tell

45:27
people is look at it from a southerner

45:29
standpoint the more you could the more

45:31
you let it cook the more you get the

45:33
more you allow them to to hold on the

45:36
money the longer the more they're going

45:38
to enhance that payout on the back end

45:40
and the true value proposition of any

45:43
lifetime income stream annuity including

45:45
Helix is the fact that if you live

45:47
forever and your account's at zero they

45:50
are on the hook to pay

45:52
they are on the hook to pay and and that

45:56
to me is a is I mean annuities as a

46:00
categories that only category that can

46:02
provide that transfer of risk lifetime

46:04
income stream no other no other product

46:06
can do that Mark we've got to close it

46:08
up a little bit here in the next couple

46:10
minutes and I really appreciate you

46:11
being on this is Mark Avery I'm going to

46:13
have all of this stuff on our site you

46:15
can uh read his bio I mean it is

46:17
unbelievable obviously got a Harvard law

46:20
degree his father was a Biblical scholar

46:23
and researcher is that correct Mark yep

46:26
yep

46:27
he was uh actually in the underground

46:30
during World War II also before his

46:33
scholarly career uh really took off when

46:36
he was in his 20s uh he was

46:40
rescuing people from the Nazis and

46:43
during World War II uh and you know he

46:47
his life almost you know was taken

46:50
several times in various ways during the

46:53
war but he he made it survived and uh

46:56
was able to get a lot of people out

46:59
uh into you know the U.S or other

47:04
countries what a motivator to live I

47:06
mean to have as a father what what is um

47:09
what's making you get up in the morning

47:11
and go get it every day Mark you still

47:13
have passion you can hear it in your

47:14
voice you can't hide it what is um

47:16
what's the passion for Mark Avery

47:20
well

47:21
it's to help working people

47:24
get more Economic Security

47:27
to help people

47:30
be secure both in terms of retirement

47:34
and health health care I worked a lot on

47:38
the health reform trying to get

47:40
everybody

47:42
covered by by some kind of decent health

47:46
insurance Affordable Care Act is what I

47:49
was involved in

47:50
helping to implement that and uh and now

47:54
you're doing the affordable income it's

47:56
now the affordable income act right

47:59
well it's it is it is two these are two

48:04
P's in a pod people need health security

48:07
and they need retirement security and

48:09
just like we have social security and we

48:13
have Medicare to take care of those two

48:16
things uh on top of Social Security

48:19
we've got our private pension system and

48:22
on top of Medicare we've got our private

48:25
Health Care system with employee

48:27
responsible plans and all the rest so

48:29
that's that's my passion I am trying to

48:34
support and improve and reform those

48:38
systems uh and I share your you know

48:41
interest in in Social Security and then

48:44
you know Medicare it's counterpart being

48:47
also as solid and as consumer friendly

48:51
and solvent uh in the long term as as

48:55
possible

48:56
that is a micro drop moment I typically

48:59
ask people to give me a mic drop moment

49:01
and you just did

49:03
um which is fantastic and it's been a

49:04
pleasure to have you on certainly want

49:06
you on again because we just kind of

49:09
scratched the surface of how the culac

49:11
thing happened

49:13
um I love the product it's my fa it's

49:15
one of my favorite if not my favorite

49:16
annuity product since I wrote the book

49:19
in 2014

49:21
um and if you want to learn more about

49:23
qlex go to my site at the annuityman.com

49:25
Run quotes 24 7 365. we have the best

49:28
calculator on the planet and I've also

49:30
allowed you to download the qlack owners

49:32
manual we used to ship a mark but we've

49:34
the we're getting so many risk um you

49:38
know requests for it that it's just with

49:40
paper prices it's gotten a little out of

49:42
hand but um

49:45
yeah I I've read it I think it's

49:48
terrific I recommend it to people I

49:50
appreciate it I tell people when I ride

49:51
it's it's me it's it's kind of like me

49:53
talking without the cuss words it's kind

49:55
of it's very very simple and to the

49:57
point but Mark I really appreciate you

49:59
being with us and I appreciate every

50:01
single person that joined us on all

50:03
major podcast platforms and the fun with

50:06
annuities YouTube channel the number one

50:08
annuity podcast on the planet that's fun

50:10
with annuities we will see you next time

50:17
[Music]