Moshe Milevsky: Learning from History with Annuities

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welcome to fun with annuities with your

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host me stan the annuity man america's

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annuity agent can annuities be fun can

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contractual guarantees be fun

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absolutely they can find out the brutal

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facts about annuities with no sales

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pitches or high pressure nonsense just

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the brutal and factual annuity truth

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which is all you need to hear

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let's have some fun with annuities and

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let's have that fun start right now

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[Music]

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welcome to fun with annuities my name is

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stan the annuity man america's annuity

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agent yes i am licensed in all 50 states

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i'm so glad you joined

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me today on all major podcast platforms

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and also we have a fun with annuities

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youtube channel if you want to see me

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and the guests interact and see our

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facial expressions when one of us says

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something that's funny or crazy or

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something like that but i'm going to

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tell you something today is a special

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day for me

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um

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this is almost i'm almost a fan boy at

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this point in time and what that means

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is i really look up to my guest he is a

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he is a person that i follow i read

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pretty much everything that he writes

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um

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if there was ever an icon in the

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financial business in the annuity

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business it's our it's our guest today

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his name is moshe moleski and let me

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tell you a little bit about him he's a

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tenured professor of business finance

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he's a published author and a well-known

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consultant he's based in toronto canada

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he has an ma and he got that 1992 in

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mathematical statistics he has a phd got

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that in 1996

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in financial

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economics he is a 2002 fellow of the

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fields institute for research in

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mathematical sciences sciences

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now now we get to the fun part and this

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is where i start following him because

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that other stuff's way above my head

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he's published 16 books translated into

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six languages

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and has authored over 70 peer-reviewed

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scholarly article articles i need you to

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hang in there with me put your seatbelt

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on this is important one of his books

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called king williams tontine which we're

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going to talk about

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is about why the retirement annuity of

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the future should resemble its past and

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it's very very interesting as a new book

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coming out

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this month and at the time of this

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taping is june of 2022 and it's called

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how to build a modern time taunting

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scripts tips and algorithms

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he is also a fintech entrepreneur yes he

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is very busy with the number of us

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patents and and computational

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innovations in 2014 he sold a startup

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company to a company that we use called

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canx that provides the fees to our

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calculators

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um he was named by investment advisor

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magazine as one of the 35 most

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influential people in the u.s financial

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advisory business

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over the last 35 years he's delivered

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over 1500

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presentations and keynote lectures

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around the world including

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academic seminars at stanford columbia

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and mit

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etc etc

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his current research is fascinating

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because his interest revolves around the

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history

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of how aging consumers financed and paid

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for the last few decades of their life

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but he's researching that on how that

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happened over the last

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few centuries it is my absolute honor

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to have moshe milevsky on fun with

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annuities thank you so much for being

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here

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and you're very kind with your

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introduction and your praise and as you

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know

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uh you're quite the legend yourself so i

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appreciate being here and uh hopefully i

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can ask you just a couple of questions

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when you're asking me questions so that

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we get a bit of a dialogue going

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absolutely obviously i went through your

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background and and your education which

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is unmatched um

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how did you land in the annuity space i

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mean i mean you have a you know and a

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master's in mathematical sciences the

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bhd in financial economics how do you

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get to annuities how did that happen

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so as as i'm sure you know annuities are

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sort of a small part of what i do my day

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sure is teaching undergraduate and

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graduate students my 22 year old

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undergraduates don't really care very

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much for annuities sadly they're 22

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years old they have student loan debt

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they're trying to figure out what to do

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with their lives you know if you talk

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about student loans they'll be

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interested if you talk about mortgages

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housing you know right health insurance

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so it was there's this enormous group of

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financial products out there that

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consumers have to be aware of and as you

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get older and as you get closer to

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retirement obviously annuity

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you know gymnasium and they walk around

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and they see the different areas that

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are available and students come with

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their parents you know these are high

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school kids and they stop at my desk uh

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where i'm selling the uh you know

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business course and the students say so

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what do you teach and i say well i teach

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retirement income planning and then they

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move right along you know 10 seconds

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later

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the parents stay the parents stay

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the parents stay so you know clearly

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this is something that is age specific

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so let me respond to your question how i

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got into annuities sure i got into

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annuities because uh i came face to face

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with longevity risk at a very young age

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longevity risk as you know is this

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uncertainty about how long you're going

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to live so my dad passed away at a very

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young age he developed colon cancer and

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passed away in his uh late 40s

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so you know that's one side of longevity

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risk uh my grandfather on the other hand

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just passed away recently he lived to

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his late 90s

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so look at that divergence there

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so to me what interested

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we sort of i looked at that and said

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okay so you know there's got to be some

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way to manage your financial affairs

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with that sort of uncertainty how do you

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manage your financial affairs when you

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know it may last as long as short as 45

6:04
years it can go as long as 95 years so

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that sort of led me to the insurance as

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a solution and insurance is risk

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management

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uh that that's sort of the short

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response to how i got into it uh and you

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know i'd be delighted to dig a little

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bit deeper but uh you know coming face

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to face with longevity risk is something

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that alerted me to the fact that there's

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a need for uh

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the annuities solution i also worked as

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an intern for a while at a very large uh

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insurance company in new york called tia

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cref you know back in the 1980s and of

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course they're very very big in in the

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in

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annuity space obviously for qualified

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401k 403b plans 401a plan so i learned a

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little bit about the industry there as

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an actuarial trainee many many years ago

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when i was trying to figure out what i

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wanted to do with myself uh so you know

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there are a lot of paths that lead to it

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and recently it's been an interest in

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history and the fact that as i'm sure

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you know annuities predate stocks and

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bonds so you know you think mutual funds

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have been around forever i know actually

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annuities have been and that's the way

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people finance their retirement

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then my question to you

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being just

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actually the thought leader in our space

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is how has the annuity industry done

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such a poor job in your opinion on

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messaging the fact that we have the

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monopoly that everybody wants the

7:22
product which is lifetime income how

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have we how have we messed that up as an

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industry because that just confounds me

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every single day especially when people

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say well i hate all annuities and i'm

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like well that's stupid that's like

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saying you hate all restaurants um it

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makes no sense

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what has happened how has the how we

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gotten here to where annuity is actually

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a curse word and a lot of the consumer

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circles and also

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uneducated financial circles

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right so you know stan with every

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question that you ask me you have to

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tell me whether you want the 10-second

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response the 10-minute response or the

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10-hour lecture series response so i

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want the consumer response so dig in as

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long as you want to dig in look so let

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me try to put this in bite-sized pieces

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i think there's a lot of confusion over

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what an annuity really is the word

8:08
annuity today is as meaningless as fund

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you called it restaurants i say funds

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you know when a reporter calls me up and

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says what do you think about annuities i

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say what do you think about funds

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you know private equity funds venture

8:20
capital funds mutual funds bond fund

8:21
stock it's a meaningless word you can

8:23
attach it to almost anything and uh

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legally what an annuity is it's very

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different to what an economist would

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call an annuity it's certainly different

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from what uh you know a media

8:33
writer would call an annuity it's just

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there's this vagueness what is it uh and

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if you go back a few hundred years the

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annuity meant something very very

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specific very well known very defined

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and then for some reason you know 300

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years later it means almost anything to

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anyone so number one is confusion about

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what this thing means

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uh is number number two i think that uh

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there was a period in the late 80s

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possibly early 90s where the commissions

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the fees that people were paying uh for

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these either as

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you know commissions that were explicit

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where you know really only 80 of your

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money goes to work or commissions that

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were hidden and paid because you

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couldn't surrender for 20 years were

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very very high atrociously high

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unconscionably high and they gave these

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instruments a very bad name now those

9:15
were very specific types of annuities

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and they you know certainly warned all

9:19
annuities so that that was part of it uh

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i think that another problem with

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annuities you know this will be my last

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point before i you know sort of turn it

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back to you is annuities are sold

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annuities are sold to a group of people

9:31
that are vulnerable they're sold to

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older people you know we're not selling

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it to 23 year olds we're selling it to

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people that are older and in some sense

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you know the point of this product is to

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generate some sort of predictable income

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when you're no longer able to make

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decisions yourself a cognitive decline

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so when you have a product that really

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is meant to help people that are

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eventually going to cognitively decline

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and help them deal with the finances you

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know there's a higher burden of care

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there because you got to make sure that

9:58
they understand what they're buying they

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continue to understand what they're

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buying sure and in many cases annuities

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are quite complicated so you have

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something very complicated going to

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someone whose ability to make those

10:07
decisions decline over time and that's a

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recipe for disaster so in some sense

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there's a whole bunch of reasons but i

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do agree with your premise there's a lot

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of confusion there's a lot of fear

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and there's certainly a lot of backlash

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against it hopefully that helps put this

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in context and it does and i've and i've

10:23
said to

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industry leaders and and and ceos of

10:27
carriers to say just just let's just get

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it down to a couple of words i'm i'm a

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marketer i understand how to brand

10:34
things obviously and i think it really

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comes down to

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um i i go back to the got milk ad where

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you just said got milk i think we should

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have one that says got guarantees or got

10:43
lifetime income i really believe we can

10:46
frame the value proposition of what

10:48
we're doing

10:50
and what we're offering which you know

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with 10 000 baby boomers hitting the age

10:54
65 they're not looking for the next

10:57
tesla or the next microsoft or the next

10:59
growth stock they're looking for

11:00
guarantees and they're looking for

11:02
lifestyles

11:03
which leads me to my next question and i

11:06
have this vision of you

11:07
moshe in the in the bowels of some

11:10
library in europe reading about time

11:13
teens and doing your research on where

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annuities first started

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but the reason i bring that up is i want

11:20
you to

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correlate that to

11:23
to the products that are out there now

11:25
and your hope

11:27
to where things are going to go and

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maybe you can just give a brief

11:31
um

11:32
history of of tauntings because when you

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google it

11:36
it's amazing what comes up one of the

11:37
questions that people have is are our

11:39
tauntings illegal that's one of the main

11:41
questions that pop up

11:43
so give us the the dumbed down version

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what that is and why you're attracted to

11:47
that

11:48
so you know as usual stan your questions

11:51
could

11:51
could take me you know five hours to

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answer so i i i'm going to selectively

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pick certain pieces of it sure because

11:58
for many of your viewers this may be the

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first time in their life they've heard

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the word tontine they don't know how to

12:02
spell it yet and maybe they're googling

12:04
it right now so there's a lot going on

12:06
so let me explain a little bit of

12:08
historical background and hopefully this

12:09
partially answers the many questions

12:11
you've just asked what interests me why

12:13
i'm fascinated with history is because

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the narrative right now in the financial

12:18
industry is that pensions are going away

12:20
pensions are going away defined benefit

12:22
pensions are no longer the norm for

12:24
employees uh social security the trust

12:27
fund in the u.s is you know on its way

12:29
down so there's questions about

12:31
sustainability and uh employers don't

12:33
really care about their employees once

12:35
they retire so you're on your own buddy

12:38
ergo we must all move into the annuity

12:40
space what interests me is what in the

12:42
world did people do prior to defined

12:45
benefit pensions not what are they going

12:47
to do in the demise and decline of

12:49
defined benefit what did they do before

12:51
and uh you know if you take a look at

12:52
when to find benefit pensions started

12:54
you know we're talking about the

12:55
beginning of the 20th century social

12:56
security fdr the 1930s uh if you're

12:59
really familiar with pension history

13:01
then you'll know the name bismarck you

13:03
know the german chancellor he starts

13:05
pensions in 1880 and everybody's

13:07
entitled when they get old to get a

13:08
pension what did old people do before

13:12
these state programs now the the

13:15
ignorant response is that there were no

13:17
old people prior to 1880 and that

13:20
bismarck somehow discovered that there's

13:21
old people and we need to give them

13:23
pensions that is simply not true life

13:25
expectancy at birth might have been very

13:27
low there were many old people in fact

13:29
if you go back to the archives there are

13:31
people that made it into their 80s and

13:33
90s and i could spend an entire hour

13:35
going through all the famous

13:36
philosophers and statesmen and you know

13:39
us presidents from the revolution onward

13:41
that lived

13:42
far beyond life expectancy what did they

13:46
do how did they get to retirement stop

13:49
being able to work and how did they get

13:51
an income and uh the next response then

13:53
asked me well their family supported

13:55
them they lived at home and they didn't

13:56
eat it that's also not true because of

13:58
the fact that not all of them had

14:00
families and and many of the families

14:02
had moved away so once you sort of

14:03
eliminate all the nonsense you're left

14:05
with how did they finance their

14:07
retirement and the answer is they went

14:08
out and they bought annuities

14:11
they went to the state they went to the

14:13
government they went to early insurance

14:15
companies they went to their local

14:17
church they went to their parish and

14:18
they entered into a scheme where they

14:20
would be receiving an income for the

14:21
rest of their lives guaranteed a word

14:23
that you like as long as they live in

14:26
exchange for a lump sum right now uh in

14:28
fact the earliest nursing homes were uh

14:30
monasteries where people would go in

14:32
they were called kurodis where you go

14:34
into the monastery and say look i got a

14:35
bunch of money this is my nest egg you

14:37
take it take care of me for the rest of

14:39
my life and they would in a sense issue

14:41
an annuity and the annuity would be paid

14:43
not just in in living somewhere uh

14:45
they'd be paid in beer and bread and

14:48
wine and you know a shirt once a year

14:51
and then that would be your annuity it

14:52
would be paid in goods and services

14:55
part of the products that people bought

14:57
hundreds of years ago to maintain

14:59
themselves in the retirement was a name

15:01
a word that you just mentioned called

15:03
the taunting

15:04
a taunting was one of the many schemes

15:06
that people used to finance themselves

15:08
in retirement it was a scheme in which

15:10
the longest living people got the most

15:12
amount of income the people that didn't

15:14
live a long time got a smaller amount of

15:16
income it was a type of an annuity and i

15:18
think that you know with that background

15:20
we we understand that there are many

15:21
different ways to finance retirement in

15:23
the middle ages and and that was one of

15:25
them and i find the taunting an

15:27
interesting scheme and i think that

15:28
there's more discussion about bringing

15:30
it back that's sort of the three-minute

15:32
summary no i i got you one of the words

15:34
that popped out when you use is the word

15:36
scheme

15:38
and in the united states scheme is a bad

15:40
word scheme means we're taking advantage

15:43
of you scheme means you're

15:45
um you know there's something we're not

15:47
telling you and i think that that word

15:50
attached to annuity

15:52
um even though you know and i know

15:56
that's not the intended use people go

15:58
yeah see it's a scheme it's not a scheme

16:00
what he's saying is this was the

16:03
strategy that people were using at that

16:05
point in time

16:07
but even when you google tontine it says

16:10
a scheme used you know hundreds of years

16:13
ago etc

16:15
that's an interesting word but don't you

16:17
agree that that word has some

16:19
connotation that's negative that people

16:21
that aren't

16:22
up to speed on the history they say well

16:26
you know scheming schemes bad right

16:29
so i'm a mathematical economist so i can

16:31
use the word scheme because i agree i i

16:34
don't answer

16:35
i don't answer to that crowd i'm not a

16:37
politician running for office trying to

16:39
figure out you know let's test 10

16:41
different words and see which one the

16:43
public likes and i'm describing it the

16:45
way you know it's described historically

16:48
you go back to the documents that was

16:49
the one but i i certainly agree with you

16:51
that if i'm a marketing department in a

16:53
modern insurance company you're right i

16:55
will stress test every word i use with

16:58
focus groups and you know i'm not even

17:00
sure i'd use the word tontine and stan

17:02
since you brought this up many of the

17:04
tontines that are emerging around the

17:06
world and they are emerging there are

17:08
many examples of it if i were to take a

17:10
look at the common denominator of all of

17:12
them uh there is certainly a very

17:14
successful one that was just launched in

17:16
australia uh there was one in south

17:18
africa i was involved with there's some

17:19
in canada all of them all of them the

17:22
common theme is they don't use the word

17:25
tontine and they certainly don't use the

17:27
word scheme

17:29
they use the thinking behind it they use

17:31
the pooling and the risk sharing uh but

17:33
they don't use the word because they

17:34
feel that like you you know people

17:36
google it and then they hear that you

17:38
know homer simpson in an episode of the

17:40
simpsons lost money on a taunting so hey

17:42
homer simpson law i don't want marge

17:44
yelling at me if i you know or or they

17:47
hear that it's illegal because the state

17:49
of new york in 1906 banned taunting

17:51
insurance so i agree with you that words

17:54
matter and we don't want to use scheme

17:56
and maybe not even use tontine but the

17:58
thinking behind it namely that people

18:00
that live a long time are subsidized by

18:02
people who don't and as you live longer

18:04
your income goes up uh that's something

18:07
that uh that makes sense and you know to

18:09
get to a point that you made earlier we

18:11
all like the word guaranteed it's it's

18:13
an important word

18:14
you know that's a word we use scheme we

18:16
don't use guarantee we use sure but the

18:17
problem is is that what's guaranteed in

18:20
today's lexicon what's guaranteed is a

18:22
nominal cash flow

18:24
nominal

18:25
nominal means i have no idea what this

18:27
is going to buy me in real terms nominal

18:30
usually means it's not adjusted for

18:32
inflation nominal means we have no idea

18:34
what goods and services i'm going to be

18:36
able to buy with it i mean honestly if i

18:38
guarantee you a thousand dollars a week

18:41
for the rest of your life do you really

18:42
know 20 years from now what you'll be

18:44
able to do with the thousand dollars

18:46
i mean we really don't so we use the

18:48
word guaranteed but in some sense it's a

18:50
guarantee of a something but anything

18:52
that i want to buy with that is not

18:54
guaranteed

18:55
so

18:56
one of the reasons that the taunting

18:58
concept whatever you call it is gain

19:00
ingredients is the idea is hey the

19:01
longer i live i want those payments to

19:03
go up i'm not

19:05
interested in guarantees but i want

19:06
something that keeps up with the cost of

19:08
living roughly speaking and i think

19:09
that's one of the appeals but to sort of

19:12
wrap this up and to answer your question

19:13
i think there are lessons to be learned

19:15
from how people finance themselves in

19:17
their older age hundreds of years ago

19:20
there are lessons to be learned for

19:21
today i may not design an ipad or an

19:24
iphone the way it was designed 300 years

19:26
ago they didn't exist but when it comes

19:28
to financing retirement there's

19:30
something about the way we did it in the

19:32
past that might resonate with the future

19:34
and hold that thought for a second we're

19:36
talking to moshe milevsky just an icon

19:38
in our business uh he's written some

19:40
fantastic books and we're going to have

19:41
those links on our site he's going to

19:43
have his own page like like all of our

19:45
celebrity guests do

19:46
but some of the books that i would tell

19:48
you to look at is one of them that i

19:50
love the seven most important equations

19:51
for your retirement was fantastic

19:53
obviously i've talked about king

19:55
williams taunting which is one of his

19:57
books recent books which i've read a

19:59
couple of times he also has one called

20:01
pensionize your nest egg which i think

20:03
is very good and then one that i really

20:05
like called longevity insurance for a

20:07
biological age

20:09
so he he brings it down to your level he

20:11
can do that but you can tell by just him

20:13
talking that he's at another level i

20:15
think if there's ever an annuity odd

20:17
couple that gets along and is on the

20:20
same page is us

20:22
you know because for me i consider

20:24
myself the annuity whisperer that's

20:26
that's trying to

20:28
dumb it down to a level that i always

20:30
tell people if you can't explain it to a

20:32
nine-year-old don't buy it no offense to

20:34
nine-year-olds

20:36
and i think the great part about moshe

20:39
is he he can change gears and bring it

20:41
down to a consumer level and those books

20:44
that i just mentioned are are some of

20:46
the

20:47
ones that i'm going to point you to and

20:48
have links to where you can go get them

20:50
on amazon let's go back to the tauntings

20:53
mosha i am i'm fascinated with this and

20:56
i'm always thinking okay where's the

20:57
puck going to be i'm giving some hockey

20:59
analogies since you're a canadian um

21:02
instead of skating after it where is it

21:04
going to be

21:05
do you ever see tontine's

21:08
entering this country in a fashion that

21:11
it's the consumers

21:12
can get it understand it and then

21:14
eagerly buy it

21:17
so

21:17
you know it depends on who the audience

21:20
is

21:21
that's listening to my response i'm you

21:23
know if if this is consumers it is i

21:25
don't really i if i don't really see the

21:28
word taunting catching on uh and

21:31
becoming an alternative to an annuity

21:34
because of some of the historical issues

21:36
there um but i do think that

21:39
here here's the the business challenge

21:41
asset managers large asset managers are

21:44
realizing that their inability to offer

21:47
guarantees might hinder

21:50
their asset gathering and certainly

21:53
assets under management uh model

21:55
so people are moving into retirement and

21:57
they're saying all right these mutual

21:59
funds these etfs were great to help me

22:01
accumulate wealth but now i need a

22:03
stable predictable i like that better

22:05
than guaranteed stable and predictable

22:08
income for the rest of my life and i

22:09
just can't get that from this very

22:11
volatile etf for mutual fund and the

22:14
asset managers are going to see some of

22:15
that money perhaps a lot of that money

22:17
leak and leave towards the type of

22:19
solutions that you've been discussing

22:21
whether it's the annuities or the migas

22:23
or the culex or diaz and so on so there

22:26
are two ways that uh from a business

22:28
point of view asset managers can deal

22:29
with that they can say well we're going

22:31
to partner with insurance companies and

22:33
we're going to somehow try to share

22:35
revenue or we're going to try to you

22:37
know keep some of the assets and and

22:39
partner with insurance companies because

22:41
people like the predictability and

22:43
stability or they might say you know

22:44
what maybe we can enter into this

22:46
business without offering those

22:48
guarantees and the only way to do that

22:50
would be taunting like structures so the

22:52
short answer to your question is i think

22:54
that within five years you're going to

22:55
see asset managers offering things that

22:58
you and i would call it on teen whether

23:00
or not they use that word as separate

23:04
fascinating

23:05
i think when people when you were

23:07
initially describing tontines

23:09
i think people stopped the car and

23:11
jumped off the treadmill

23:13
when you said the word increasing income

23:15
because that's the biggest

23:17
question i get in this inflationary

23:20
world that we're living in is you know

23:22
how do we how how do we adjust for

23:25
inflation how do we address inflation

23:27
and as you well know

23:28
moshe and i'm just telling this for the

23:30
consumers that are listening to this

23:31
when you attach an increase to a current

23:33
commercial annuity it's called a cost of

23:36
living adjustment in the past there was

23:37
cpiu consumer price index increases but

23:40
annuity companies had the big buildings

23:42
for a reason as i always say they don't

23:43
give that away they just simply lower

23:46
the initial payment to make up for that

23:47
but when you start talking about

23:49
tontine's adjusting and increasing

23:52
can you go into that for the consumer on

23:55
what that might look like

23:57
from a 30 000 foot view yeah so

24:00
you understand that when i sit here and

24:01
we're having a conversation i have four

24:03
hands tied behind my back i don't have a

24:05
blackboard i don't have my slides i

24:07
don't have the the graphics i certainly

24:09
can't do equations you'd probably shut

24:11
me down so

24:12
there's a lit there's a limit as to how

24:14
much this can be explained to the point

24:16
where the consumer says i get it you

24:18
know i'm sorry

24:19
we need to explain things you know using

24:21
certain things but the idea here is is

24:23
that if you enter into a an arrangement

24:26
where people that live a long time get

24:28
to share uh the benefits from something

24:31
since there are less people living a

24:33
long time they're going to share more

24:34
benefits so let me try to put this

24:36
without any algebra imagine that you and

24:40
me and a group of our neighbors decided

24:42
to buy a 30-year treasury bond from the

24:46
u.s treasury and it was a unique type of

24:49
bonds that we all bought together with

24:51
us all our buddies we bought it it's a

24:53
bond that pays coupons for 30 years but

24:56
it never pays back the principal at the

24:58
end never pays back the principal at the

25:00
end and you're saying mosh why would i

25:01
buy something that never pays back my

25:03
principal at the end and the answer is

25:04
because instead they'll give you higher

25:05
coupons

25:06
so you know right now the 30-year rate

25:08
would be three percent but you're

25:10
getting your principal back at the end

25:11
they'll give you seven or six percent

25:14
and then you don't get the principal

25:15
back at the end which is kind of an

25:16
evening out of your coupons we all all

25:19
of us in the neighborhood decide to buy

25:21
one of these bonds that are paying you

25:22
know let's say six percent a year right

25:24
and here's what we do we've bought this

25:26
bond and we enter into an agreement you

25:29
and me and many others look whoever is

25:31
alive gets to share those coupons

25:34
we at the end of every year are gonna go

25:36
to the local golf club or the local bar

25:39
and we're gonna all toast whoever's

25:40
alive and we get to split those coupons

25:42
but if you're not around you can't split

25:44
the coupons so let's imagine what

25:46
happens when all of us have bought this

25:49
bond that after one year we're all

25:50
healthy we're good we all get six

25:52
percent we're getting the six thousand

25:54
dollars a year on our hundred thousand

25:56
dollars and then in a year from now we

25:58
come back to celebrate are we alive and

26:00
yeah we're all alive so we're getting

26:01
six thousand but then at the end of the

26:04
third year god forbid one of us has a

26:05
heart attack or one of us has a stroke

26:08
or one of us is in a car accident we're

26:09
not there to toast our longevity and

26:12
suddenly there are less of us there's

26:14
less of us but we still have that six

26:16
thousand dollar coupon we're sharing it

26:19
over a smaller group

26:20
at the end of the year we have that six

26:23
000 coupon that's being paid but it's

26:24
being split with a smaller group how

26:26
does this work we have the same amount

26:28
of cash in the numerator to use a

26:30
mathematical term but the denominator is

26:32
shrinking there are less of us

26:34
and then 10 years later you know say

26:36
half of us are still there other half

26:38
have not made well the numerator is

26:40
still exactly the same the denominator

26:42
is shrinking each one of us is getting a

26:44
bigger and bigger payment

26:45
whoever's around 30 years from now

26:47
whoever's around 30 years from now

26:49
they're still giving out the 6 000 but

26:51
we're splitting it over a very very

26:53
small group we're getting a really big

26:55
coupon which is a naturally increasing

26:58
hedge in some sense against inflation

27:01
even though none of us bought an

27:02
inflation-linked bond

27:04
mortality becomes a real interest rate

27:08
mortality mortality rate without having

27:11
to worry about buying inflation linked

27:12
bonds and tips and eye bonds and and

27:14
reserves

27:15
so that is incredibly uninteresting when

27:19
inflation's at two percent or less and

27:22
nobody knows what inflation is but

27:24
suddenly in the last year or two

27:27
inflation is a very hot topic on google

27:29
you google it and you get you know the

27:30
engram that's a that's a word that's

27:32
coming up a lot president himself is

27:34
using that word maybe people start to

27:37
get interested in a scheme where there's

27:40
this natural increase so that's one of

27:41
the reasons you're seeing more hopefully

27:43
i've explained why this is increasing

27:45
over time but that's one of the reasons

27:46
you're seeing more of an interest in

27:47
this

27:49
and i'm

27:50
i guess in a glass half full

27:52
scenario

27:54
this rising inflation is is pushing

27:57
people to

27:59
talk to you listen to you read you and

28:02
say okay let's let's look deeper in this

28:04
i was writing down as my marketing brain

28:06
was rolling

28:08
on what could you call this and what

28:10
could you stamp this at

28:12
and just the acronym t-o-r-i came out

28:15
which is transfer of risk income which

28:17
is that's what it is you're transferring

28:19
the risk and you're or you're sharing

28:22
the risk

28:24
for income and you can add another eye

28:26
on top of that which is increasing

28:28
income which i think i think that's the

28:30
part that people will listen to because

28:33
in essence it sounds like to me it's a

28:34
life-only annuity

28:36
that you're as long as you're living

28:37
you're

28:38
um people that that that have followed

28:40
my work that you know what a life-only

28:42
annuities i always tell people when your

28:44
learjet hits the mountain money goes

28:45
poof

28:46
now motion gave a much better

28:50
example of that but it's a life only

28:53
taunting shared

28:55
pooled risk of which income increases

28:58
for the people that

29:00
are still breathing

29:02
and i think if it could be explained

29:04
like that i don't think people in this

29:05
country would have a problem with doing

29:08
a product like that

29:10
or at least a portion of their what i

29:11
call their income floor which is social

29:14
security dividends

29:16
annuities commercial and these type of

29:18
new annuities the interesting part is

29:20
going to be how they're distributed

29:23
within the industry and i think that's

29:25
going to be the challenge obviously

29:27
you're you know that everyone else

29:29
looking at it knows that

29:30
but i think we need as an industry to

29:32
hey forget the distribution let's put it

29:34
out there let's get it out there to

29:36
where it's you know and show people that

29:37
it that it works

29:39
and i think it would help the annuity

29:41
industry as a whole because people would

29:42
understand you're transferring risk for

29:44
lifetime income i always tell people i

29:45
don't know the roi until you die

29:48
you know up until that point it is a is

29:50
a transfer risk now

29:52
you find yourself over in europe a lot

29:55
in in in libraries am i correct i'm

29:57
envisioning you over there all the time

30:00
um actually you're you're catching me

30:02
when i just came back two days ago from

30:04
the archives in edinburgh in scotland

30:08
uh i i don't want to bore your audience

30:11
to death but the church of scotland

30:13
introduced one of the first funded

30:15
annuities in the early 18th century when

30:18
you take a look at annuities it's one

30:19
thing for me to guarantee you a payment

30:21
for the rest of your life but if you're

30:23
smart you're going to say to me moshe

30:24
how are you going to make sure that that

30:25
payment is actually going to stay there

30:27
for the rest of my life it's one thing

30:28
for the king to promise payments but i

30:31
want the king to set aside some money to

30:33
make sure that those payments are going

30:35
to be made that's called a funded

30:36
annuity so you can go back to biblical

30:38
times kings were promising annuities

30:41
from biblical times and then they

30:42
defaulted on them because they'd never

30:43
set aside any money for it the first

30:46
entity the first entity to actually set

30:49
aside money and say all right we've just

30:51
promised annuities to ministers we

30:53
better make sure we manage this money to

30:55
pay those annuities and we have to have

30:56
a large pool the first entity that did

30:58
that was the church of scotland in the

31:00
early 18th century it's the first funded

31:03
annuity period so i went and i was able

31:05
to gain access to their documents and

31:07
their archives to see how they designed

31:09
it it's the subject of my next book and

31:11
i don't want to give away too much but i

31:13
found it fascinating how they set that

31:15
scheme up and it was because ministers

31:18
and eventually university professors

31:20
said hey man i want an annuity when i

31:22
retire i want an annuity for my spouse i

31:24
want an annuity for my kids i don't want

31:26
to give them money they're going to

31:28
squander it somebody will steal it from

31:30
them they don't know how to manage money

31:32
give them an annuity so that that was to

31:34
me uh quite interesting and i spent a

31:36
couple of weeks there and they were very

31:38
kind and they gave me access to it so

31:40
the short answer is yes i do spend a lot

31:42
of time in archives and libraries

31:44
when you don't give away the farm

31:45
because i want people to buy the book

31:47
because i'm going to buy it as well but

31:49
were you surprised with some of the

31:51
things you found did you have any oh oh

31:54
my goodness moments hitting your

31:55
forehead when you found stuff or was it

31:58
predictable what you found

32:00
in the archives you know to be honest i

32:02
thought i was going there to cross the

32:03
t's and dot the eyes because like i know

32:05
what i'm going to find it's going to be

32:06
these documents but you know you got to

32:08
go you got to do it right you just got

32:09
to make the pilgrimage you got to touch

32:10
the documents and come over no there's a

32:12
lot of very shocking very interesting

32:14
things in terms of how they did things

32:15
uh some of the participants in these

32:17
annuities i found interesting the

32:19
management of it uh some of the concerns

32:21
around fraud some of the choices that

32:23
people had there was a parallel to some

32:25
of the things that we see today and

32:26
defined contribution plans there were

32:28
defaults and one of the issues that they

32:30
had to contend with is you know this is

32:31
in scotland there are presbyteries uh

32:34
spread across the country you know how

32:36
do you force people into the plan or do

32:38
you just you know tell them

32:40
if you want you can join the annuity

32:42
fund uh which is so very similar to

32:43
defaults now in 401ks and dc plans and

32:46
what they said was well you had a year

32:48
to to default to say i'm not interested

32:51
so they gave you a year unless you're in

32:52
the north of scotland then they gave you

32:54
two years because you know it's a long

32:55
time to get your notice back there but

32:57
if we didn't hear from you we would

32:59
default you into the annuity and this is

33:02
echoing some of the discussion now with

33:04
secure 2.0 about what should happen to a

33:07
plan as they approach retirement should

33:08
we default people into an annuity and

33:11
they've struggled with the same thing

33:13
280 years ago i mean you know we're

33:15
forcing them into an annuity it's a

33:16
lifetime income product are they gonna

33:18
are the ministers gonna complain how do

33:20
we default them so what i found

33:22
interesting was a lot of the parallels

33:23
with some of the things we deal with

33:24
today uh they they dealt with at that

33:27
time and uh it was uh you know that was

33:29
interesting to me some of the

33:30
administrative aspects of managing this

33:32
you know the actuarial theory is three

33:34
percent the administration is 97

33:38
how do you get the lists of who's alive

33:39
and who's not alive and who's

33:41
contributed and what great do they

33:43
contribute how big did their pool have

33:45
to be there weren't enough ministers in

33:47
parishes so they asked university

33:48
professors to join because they got a

33:50
couple hundred more people and now they

33:52
can use the law of large numbers

33:54
anyway this is things that interest me

33:56
i'm a professor i can afford to have

33:58
that habit

33:59
that is fantastic no i'm not a professor

34:01
and and you're sitting there i'm like

34:03
you know listening intently to every

34:05
word because it just sounds fascinating

34:07
because my and i can't read uh wait to

34:09
read the book because i want to hear how

34:11
they dealt with these things how they

34:13
dealt with the problems that are

34:15
similar

34:16
in fashion to what we're going to do now

34:18
please tell me moshe that our government

34:21
the united states government is hiring

34:22
you to help

34:23
with these types of ideas

34:27
look i i've helped uh i have one foot in

34:30
the u.s one foot in canada so i spend

34:32
time teaching here but i have a place

34:33
for florida so i've done a lot of

34:35
consulting work for the state of florida

34:37
the florida state board of

34:38
administration so i spent quite a bit of

34:40
time in tallahassee many years ago and

34:42
uh that was about them converting their

34:44
defined benefit plan to define

34:46
contribution because you know at the

34:47
time the governor jeb bush you may

34:49
recall uh one of his ideas was you know

34:52
we've got to give people choices and not

34:54
everybody wants a db plan especially if

34:56
they're younger but the key was we

34:57
wanted to ensure the designers of the

34:59
fund wanted to ensure that uh people had

35:02
access to annuities at retirement when

35:04
you take away someone's defined benefit

35:05
pension and you say to them no you're

35:07
you're not going to get a guaranteed

35:08
income for life you have to give them

35:10
something similar which is an annuity so

35:12
i was there to help vet what companies

35:14
and what products would be allowed into

35:17
the plan put it on the shelf so to speak

35:19
uh that people would be able to select

35:21
as they moved into retirement and you'll

35:23
appreciate this the sponsors and

35:25
certainly the politicians they want

35:27
complicated annuities in there they

35:28
didn't want the the security type and

35:31
they wanted simple diaz and spias and

35:34
and and culax and the question was you

35:36
know do you go with the highest payout

35:38
well that's not necessarily safe because

35:40
sometimes the highest payout isn't

35:41
necessarily from a credit quality that

35:43
you want

35:44
do you go with the highest credit

35:45
quality well the payout won't be high

35:47
what sort of options do you give people

35:49
so the short answer to your question is

35:50
i have been involved a little bit in

35:53
some localized projects state projects

35:56
but there are many brilliant minds in

35:58
the us in this space and i know that

36:00
many of them are helping uh whether it's

36:03
the treasury or the or the fed or

36:05
certainly the irs in terms of the tax

36:07
treatment of these things so the short

36:09
answer is i am one of many researchers

36:11
that are interested in these things and

36:13
yes they are being tapped as a group to

36:15
help governments although you know

36:16
sometimes there's a communication gap

36:18
there it sounds too academic too

36:19
theoretical politicians may not like it

36:23
yes it all comes down to messaging when

36:25
you're talking to the consumer the

36:26
consumer is the the listener to this

36:28
podcast and and i think that's one of

36:30
the reasons this is one of the fastest

36:31
growing podcast in the financial sector

36:33
is because we're having people on like

36:35
you that's making people think and

36:37
they're hearing what you're doing

36:39
i guarantee they don't know what a

36:40
tontine is by the way it's spelled

36:42
t-o-n-t-i-n-e

36:44
if you're googling it

36:45
um but we'll have that link on on the

36:48
site for moshe as well um

36:52
so for you you're always it seems like

36:55
you're always digging in and trying to

36:58
find the next blue water as i call it

37:00
you know things that other people aren't

37:02
thinking about what hit me when you said

37:05
you know i'm not i'm not looking about

37:06
what people are gonna do i wanted to see

37:08
what they were doing back then that's a

37:10
contrarian thought that's not an a

37:13
natural thought maybe it is for

37:15
academian like you

37:16
but not for the normal person out here

37:19
what's the

37:20
next mountain you're looking to climb is

37:23
there something that's piqued your

37:24
interest that has caught your eye and

37:26
attention that you really want to dig

37:28
into because you've i know you can keep

37:30
digging into tontine's and and that but

37:32
is there anything in the annuity space

37:34
that you're looking at that is new

37:37
so so look sen you know it is when we

37:39
academic it's like watching a star that

37:41
exploded the light that you're seeing

37:43
today was generated millions of light

37:45
years ago even the light that comes from

37:47
the sun came seven or eight minutes ago

37:49
so you know the taunting stuff that's

37:51
coming out now i worked on that 10 years

37:52
ago i'm not saying i'm bored by it i'm

37:54
not saying i'm not interested in it but

37:56
you know that's been done you can't sit

37:58
you know your entire life at the same

38:00
well what interests me now once i get

38:02
this uh annuity fund out of the way what

38:04
interests me now is long-term care

38:07
namely that as people age as people age

38:11
it's not just that they want predictable

38:12
income for the rest of their life which

38:15
is great or guaranteed income they need

38:17
to know what will their expenditures be

38:20
and what will their health expenditures

38:21
be and how do they manage hedge and

38:23
ensure that so i have become interested

38:25
in the gap between lifespan and health

38:28
span

38:30
lifespan is how long you live we've

38:31
talked about that longevity risk health

38:33
span is how long do you live healthy

38:36
and the gap between health span and

38:38
lifespan can be you know

38:40
zero you got hit by a bus sadly and the

38:43
gap between lifespan and health span can

38:45
be 20 years you know you get hit with

38:48
something you're just not in very good

38:49
health anymore and now you got to manage

38:51
for the next 20 years i think long-term

38:54
care products annuities that are linked

38:56
to long-term care long-term hedges

38:58
longer i think that's something that

39:00
that needs to get more uh investigation

39:02
it needs to get more attention uh money

39:05
doesn't solve your problems and i know

39:07
that sounds cliche you need to do

39:09
something with it to solve your problems

39:11
how many times do you throw money at a

39:13
problem and it didn't solve it what do

39:14
you mean i fixed that bloody air

39:16
conditioner last year why didn't it get

39:18
fixed and we got to throw it up

39:20
how do we throw money at things

39:21
efficiently when it comes to health care

39:23
is something that interests me because

39:24
as you age that's going to be a big deal

39:26
it's not the money how do i get better

39:27
how do i you know deal with arthritis

39:29
forget about the annuity check that's

39:31
great thank you stan for the annuity

39:33
check i need to deal with my arthritis

39:35
can you give me some suggestions no

39:36
that's not my bailiwick i don't deal

39:38
with it well maybe you should maybe you

39:40
should get an annuity that pays in

39:41
arthritis medication and i mean that

39:43
just sort of half as a joke but that's

39:45
something that interests me now how do

39:46
we deal with the long-term care

39:48
challenge

39:49
boy that's a big one

39:51
i wasn't expecting that from you but i'm

39:53
glad i asked because i'm now feel

39:55
comfortable with you going at it and

39:57
figuring it out obviously the long-term

39:59
care space is a different space

40:01
because it's a health insurance product

40:03
not a life insurance product a life

40:05
insurance products life insurance

40:07
companies issue annuities for the people

40:08
listening out there and there are some

40:11
annuity types that have what's called

40:12
confinement care or enhanced benefit

40:14
type

40:15
um guaranteed issue

40:18
products out there and we certainly can

40:20
show you those but that's not what he's

40:22
talking about he's talking about

40:24
literally

40:26
solving for specific things now are you

40:28
thinking and i'm i'm

40:30
if i'm off base tell me are you thinking

40:32
that in the future there will be annuity

40:35
type products that are

40:36
addressing not only income but specific

40:40
issues of health and long-term care

40:43
i do and i i think that you know when

40:45
you think of activities of daily living

40:47
that trigger a long-term care policy why

40:50
can't why can't i buy a spear

40:52
that uh as soon as you're diagnosed with

40:55
uh you know let's say

40:57
you can't do three of five activities of

40:59
daily living you can't bathe you can't

41:00
clo clothe yourself you can't uh walk to

41:02
the bathroom i just you know the payment

41:04
triples why would i want the payment to

41:06
triple well because now you're gonna

41:07
have to hire someone to help you with

41:08
that mm-hmm i mean so because it's not

41:11
so much the income that i want it's the

41:13
services that i'm going to get i really

41:15
need the income income is just part of

41:17
it i need the income to get goods and

41:19
services you've solved part of my

41:21
problem stan you're getting me the

41:22
income for the rest of my life i need to

41:24
get services and i need to get goods are

41:27
you helping me with that and some people

41:29
might say that's not my problem you know

41:31
go talk to a medical professional go

41:32
talk to a social worker and what i'm

41:34
trying to say is no i think this is

41:35
going to be part of the financing

41:36
because if you give me a sum of money

41:38
that doesn't quite cover the services

41:40
and the goods that i need what's what's

41:42
the point of that sum of money

41:43
especially if it's depreciating over

41:45
time so the answer to your question is

41:46
yes i see annuities having long-term

41:49
care riders just like a lot of the life

41:50
insurance policies you can buy a life

41:52
insurance policy is going to pay out a

41:54
hundred thousand dollars as a death

41:56
benefit but if you need long-term care

41:57
they'll multiply it by five

41:59
let me say that again you have life

42:02
insurance if you die the beneficiary

42:04
gets a hundred thousand but if you're

42:05
still alive and you need long-term care

42:07
you can draw down like a bathtub five

42:10
hundred thousand dollars worth of

42:11
long-term care over time and and i can

42:14
see a lot of people saying yeah i want

42:15
that i want that i need to deal with

42:17
aging i need to deal with aging i've

42:19
seen it with my parents i need to deal

42:21
with myself so this is something that

42:22
interests me you ask me what's where's

42:23
the puck going right

42:25
i think it's crazy

42:26
no i love it i think the i think the

42:29
issue and i'm always thinking from the

42:30
consumer standpoint how to get the

42:33
policy approved and to the consumer and

42:35
the benefits in place so when i'm

42:37
thinking that i'm thinking okay

42:40
underwriting issues if if there are any

42:44
uh pricing issues from the carrier

42:46
that's issuing the policy but my hope is

42:48
that

42:49
with this type of thought

42:51
people

42:52
that have diabetes or that have pre

42:56
pre-existing conditions it would be

42:58
really nice if they could buy a

43:00
guaranteed issue product that addressed

43:03
that specific thing

43:05
without having to go

43:07
and get underwritten whether it's

43:08
simplified issue or full underwriting

43:10
because as i always say

43:12
annuity

43:13
or long-term care companies they want to

43:15
they want to ensure young healthy people

43:18
um i think with 10 000 baby members

43:20
hitting 65 every single day

43:23
most of us and i'm in i'm not that there

43:25
yet but i'm i'm

43:27
not going to tell everybody my age

43:28
because i look so vibrant and young

43:30
right moshe um but but i i would want to

43:33
buy something for pre-diabetic which is

43:35
who i am you know can i buy an annuity

43:37
that addresses that

43:39
boy you talk about opportunity

43:42
in a niche market because it sounds like

43:44
to me

43:46
that you're thinking from the life

43:48
insurance standpoint that you can buy if

43:49
you're a smoker you can buy life

43:51
insurance because you're a smoker you

43:53
know it might cost you a little bit more

43:55
but it's never been addressed from the

43:57
standpoint of health issues from an

43:58
annuity standpoint and that's what

44:00
you're talking about that is absolutely

44:03
fascinating which means my spea

44:05
calculator would be

44:06
spear calculator healthy spear

44:08
calculator pre-diabetic spia calculator

44:11
cancer spear calculator whatever

44:15
you know stan one of the things that

44:17
i've been sort of puzzled by is why

44:19
people don't ask for underwritten

44:21
annuities

44:23
more

44:24
meaning look i want an annuity but i'm

44:25
not in good health pay me more i'm not

44:27
going to cost you as much uh in the uk

44:30
in england scotland there's something

44:33
called impaired annuities sure and say

44:35
look i want an annuity so i i can

44:37
certainly see that uh if we can dig just

44:39
a little bit more into the actuarial

44:41
without turning off your audience when

44:43
you buy an annuity from an insurance

44:45
company they're worried you're going to

44:46
live a very very long time that's their

44:48
fear they've got to set aside capital

44:50
and reserves for that but if at the same

44:52
time you add to it something that pays

44:54
out in the event of a long-term care

44:57
need

44:57
then there's an internal hedge in there

44:59
because the actuaries are saying look

45:01
both aren't going to happen this person

45:03
isn't moving into a nursing home

45:04
tomorrow and living 40 years so they can

45:07
suddenly be a little bit better in

45:08
pricing what i mean is usually you buy a

45:11
toaster and you buy a fax machine you

45:14
know using the historical analogy you

45:15
never think of combining a toaster and a

45:17
fax machine like what

45:19
but what if i told you get a really

45:21
really cheap because the underlying

45:23
mechanism for the toaster and the fax

45:24
machine are exactly the same we can

45:26
combine it we can make it cheaper i

45:27
think when it comes to long-term care

45:29
you might be able to get a better spea

45:31
payout a better pay your calculator will

45:33
show a higher payout if not necessarily

45:35
they come in and they say i've got

45:37
pre-diabetes i say i also want to buy a

45:40
long-term care rider attached to it

45:42
it'll be cheaper than combining them

45:43
together i i do think that if you're in

45:45
the annuity industry you have to have

45:46
some conversations around this you have

45:48
to be aware of it it's going on in the

45:50
background you need to understand it's

45:52
not the money that people want it's the

45:55
stuff they're gonna do with it i think

45:57
that's the key message here

45:59
and i think the future of the annuity

46:01
industry is solving is right now the

46:03
annuity industry says we can solve the

46:05
income stream here's the income stream

46:07
then go solve whatever you've got to

46:08
solve and i think the future is like

46:10
you're saying

46:12
here's the annuity income stream that

46:14
will also solve and and target

46:18
what you're worried about instead of

46:20
just throwing it at you and say go get

46:21
it i think that's um

46:23
that's fascinating now to answer your

46:25
question about why don't people do um

46:28
underwritten speeds there's just not

46:29
many

46:30
i mean it's not competitive and the

46:32
great part about the annuity industry in

46:33
my opinion for most products bsd is qlex

46:36
mygos index annuities whatever these are

46:38
commodity products there's there's

46:40
bunches of them and you shop them for

46:42
the highest contractual guarantee you

46:43
always tell people to do that you own an

46:44
annuity for what will do not what it

46:46
might do but if you're doing an

46:48
underwritten speed and for the consumer

46:49
out there what you're saying to the

46:51
annuity company is you're proving to

46:53
them that your life expectancy is

46:54
actually less which means that the

46:56
payments will be fewer which means that

46:58
the payments will be higher that's what

47:00
that means that's what most is talking

47:01
about the problem now is there's maybe

47:05
one or two maybe three tops

47:08
companies that are doing underwritten

47:10
immediate annuities at this time in the

47:11
united states that is a problem

47:14
big time so i would love that but i

47:16
for whatever reason companies have shied

47:18
away from that yeah so stan you know

47:20
it's a chicken and egg issue you know

47:22
what comes first i mean nobody's

47:23
interested in it so companies don't find

47:25
the need to maintain an active line

47:27
marketing keeping your registrations you

47:29
know satisfying them it's not worth it

47:32
uh but then if the demand comes there

47:34
then they are the company see an

47:36
opportunity so you know the question is

47:37
what's going to happen first is somebody

47:39
going to get up and say we're starting

47:40
to offer impaired annuities and just

47:42
let's give it a try or will advisors uh

47:44
people such as yourself influencers you

47:47
know with a very wide audience and

47:49
readerships hey you know it's time to

47:50
bring these things in we might increase

47:52
the size of the annuity message from

47:55
people who say look i'm not in great

47:57
health i would like to get one of them

47:58
well and what we have to do when we we

48:00
go through that process is someone says

48:02
i want to underwrite a spea to see if i

48:04
can get a better payout because i'm

48:06
going to prove that my life expectancy

48:07
is less we warned them up front

48:10
that there is a good possibility you're

48:12
going to be denied

48:14
and that's a problem as well i i think

48:17
if there would be a simplified issue

48:19
type underwritten spea

48:21
consumer friendly i think people would

48:24
flock to it just because a lot of people

48:26
have underlying conditions and would

48:27
like to get

48:29
you know in essence an accelerated

48:30
payment but i i think it's fascinating

48:32
where you're headed with this i

48:33
encourage you to to dig into the

48:35
long-term care side because

48:38
as you know the long-term traditional

48:41
long-term care there's not many carriers

48:43
left in the united states for a myriad

48:45
of reasons

48:46
and there's three different types of

48:47
long-term care which you know i have a

48:49
long-term care expert on and we go

48:50
through those things his name is jack

48:52
lundenberg he's fantastic if you want me

48:54
to

48:55
point you to him

48:56
um

48:58
but i think that's

48:59
that's interesting for where you're

49:01
headed what's the difference between

49:04
canadian and u.s type annuities you know

49:06
i get i get a lot of calls from from

49:08
people that watch my videos and and

49:10
podcasts i'm sure that you're

49:12
you being on will give those canadian

49:14
calls in uh yeah so what do you see up

49:17
there yeah so it's very interesting that

49:19
you you ask that so i am a canadian and

49:21
u.s citizen right uh which means that i

49:24
file taxes in both countries lucky me um

49:28
i mean

49:29
i don't even want to start talking about

49:31
what a patriot huh yeah

49:33
well there's some tax credits that you

49:35
get for one not a 100 tax credits i i

49:38
could do a whole podcast on on tax

49:39
regimes in fact my phd thesis was on the

49:42
reconciliation of the canadian and u.s

49:44
tax system but to answer your question

49:46
there are many annuity products that are

49:48
available in the u.s that are simply

49:50
unavailable in canada correct so when i

49:52
purchase i own three annuities i mean we

49:54
can get into which ones but i i bought

49:56
them all as an american citizen with a

49:58
residence in florida because you simply

50:00
can't get them here they don't exist

50:01
they're not offered and why the

50:04
innovation hasn't hit here may be part

50:06
of the fact that there's more defined

50:08
benefit pensions here per capita than

50:10
there is in the us but for all of you

50:12
that are listening to this all three of

50:13
you that happen to be canadian and u.s

50:15
citizens who happen to have a canadian

50:17
residency in the u.s residency all one

50:19
all one of you if you're buying one of

50:21
these things get it from stan in the u.s

50:24
even if there's a stand in canada that's

50:26
right that

50:27
well obviously we we we appreciate that

50:30
uh and we do like working with people

50:32
all across the united states and if

50:33
there was a chance for us to do canadian

50:35
we would because we do get a lot of

50:36
those calls

50:37
um

50:38
if you were annuity czar

50:41
and you were sitting over top of

50:43
everything

50:44
what would you change

50:47
i know it's loaded and broad but pick

50:49
something yeah yeah so unfortunately

50:52
there isn't such a position you know

50:54
insurance is regulated by the state so

50:55
there are 52 or 51 let me dream i'm

50:58
dreaming

50:59
okay

51:00
all right

51:01
um i i think that uh if i could throw

51:05
you know a couple 100 million dollars at

51:07
the problem which is what czars are

51:08
allowed to do these days they can go to

51:10
congress they put in a footnote and

51:12
before you know it 100 million dollars

51:14
have come into their budget uh uh you

51:16
know a public advertising campaign to

51:19
clarify what these things are and how

51:21
important they are to reduce the

51:23
financial illiteracy around these

51:26
products

51:27
don't have it run by companies or

51:30
affiliated organizations that were yeah

51:32
they got a bias they're not excited and

51:34
i'm the last one to say let's hand it

51:36
over to government but you've just given

51:37
me a government job i got to figure out

51:39
what to do right i'm not saying let's

51:41
hand it over if you handed me a

51:43
government job i would suck out that

51:45
budget and say let's get this thing

51:46
clarified here are the different types

51:49
here's what they do these are the

51:50
different vitamins a b c dna here's what

51:53
the vitamins do and we put it on the

51:55
package and there's clarity around the

51:57
nutritional content of these things i go

52:00
to the store i pick up my vitamins i

52:02
know am i getting zinc in there there's

52:03
no zinc my doctor said i needed zinc

52:05
let's pick up the multivitamins with

52:07
that sort of clarity of message and

52:10
clarity of ingredients and clarity of

52:12
what are these things is what i would do

52:16
let's get a messaging campaign out there

52:18
uh instead of putting more roadblocks or

52:20
barriers or legislative uh roadblocks in

52:23
front of the or mandating anything for

52:26
that matter

52:27
and i would do the exact same thing it

52:28
would all be about messaging it would

52:30
all be simplified it would all be

52:32
repetitive and easy to understand it

52:34
would stick in the back of your head and

52:35
you'd understand when the word annuity

52:37
was used

52:38
whether it was got guarantees or

52:40
transfer of risk or whatever we came up

52:43
with i think that's the biggest problem

52:45
with an industry that has a monopoly an

52:48
absolute monopoly on lifetime income how

52:51
that how this isn't a multi-trillion

52:54
dollar market annually i don't

52:56
understand

52:57
and sometimes it feels like i'm

52:59
screaming into a hurricane with people

53:01
that don't under that the industry that

53:03
doesn't seem to care because they're

53:05
making so much money last question

53:06
motion i appreciate once again

53:09
moshe moleski we're going to have his

53:10
stuff on the site but boy has it been a

53:12
pleasure and i could talk to you forever

53:14
and hopefully one of these days where

53:16
our paths will cross

53:18
especially in florida i live in florida

53:19
and las vegas so maybe we'll our florida

53:21
paths will cross but this is the last

53:23
question

53:24
and i do it with all my celebrity guests

53:26
i don't give them a heads up on it

53:28
but it's called the mic drop moment and

53:30
what i want you to do is i'm going to

53:32
hand you the mic and you're going to say

53:33
something that you think the consumers

53:36
out there that are listening to this

53:37
need to hear

53:38
and walk away with

53:40
because you're moshe moleski so my drop

53:42
moment

53:44
moshe moleski

53:47
yeah i i think that uh consumers should

53:49
pay more attention to what fees

53:52
commissions

53:53
and uh you know revenue sharing

53:55
agreements uh exist with all the

53:58
financial products that they buy i think

54:00
many of them are embarrassed to ask this

54:01
they have a good relationship with their

54:03
financial advisor their local insurance

54:05
agent their local car insurance sales

54:06
person i think people have to become

54:08
more accustomed to look what's the

54:09
markup on this thing you know i'm buying

54:11
a car this is what i'm paying you know

54:13
you can easily spreadsheet and compare i

54:16
think that would also solve part of the

54:17
problem the skeptic in the consumer says

54:20
yeah you're making a big you know you're

54:21
ripping me off well if you disclosed

54:23
that it wasn't that much you know maybe

54:26
i feel more comfortable with it it's not

54:28
just i don't understand it even if i do

54:30
understand it i'm concerned that it's

54:31
very opaque and i don't understand how

54:33
much i'm making so ask awkward questions

54:36
that's the mic drop moment learn to ask

54:38
awkward questions to people you like

54:41
yeah i know i have a great relationship

54:42
with my advisor but here's an awkward

54:44
question exactly how much money are you

54:47
making from this

54:49
i love that

54:50
i'm i'm gonna that might be a t-shirt

54:52
motion that we have us ask awkward

54:54
questions

54:56
to get the right answers i really

54:57
appreciate that i really appreciate you

54:59
joining me and thank you so much for

55:01
everyone out there that's that's joined

55:03
us on all the podcast platforms then

55:05
youtube channel called fun with

55:06
annuities and i will see you next week

55:14
thanks for listening to fun with

55:15
annuities please hit the subscribe

55:17
button and make sure to go to my site at

55:20
the

55:21
annuityman.com where you can run your

55:23
own spea dia and q lat quotes and see a

55:26
live feed of the best mica fix rates in

55:28
the country and even get indexed and

55:31
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55:33
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55:35
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55:37
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55:41
encourage you to schedule a one-on-one

55:43
call with me stan the annuity man so we

55:45
can have a full discussion of your

55:48
specific situation it will be the best

55:50
brutally factual and truthful advice you

55:53
will ever get and that's one guarantee

55:56
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55:58
so join me next time for the number one

56:00
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56:03
with annuities

56:07
[Music]

56:18
you