Moshe Milevsky: Learning from History with Annuities (TAM Classic)

0:00
[Music]

0:04
welcome to fund with annuities where

0:06
every single week I welcome a celebrity

0:08
guest expert that can help you maximize

0:10
chapter 2 of your life listen learn

0:14
laugh and love every minute of the most

0:17
unique Financial podcast on the planet

0:21
let's get to

0:23
[Music]

0:28
it welcome to fun with annuities my name

0:30
is Stan the annuity man America's

0:33
annuity agent yes I am licensed in all

0:34
50 states I'm so glad you joined me

0:37
today on all major podcast platforms and

0:40
also we have a fun with anui YouTube

0:41
channel if you want to see me and the

0:42
guests interact and see our facial

0:45
expressions when one of us says

0:46
something that's funny or crazy or

0:48
something like that but I'm goingon to

0:49
tell you something today is a special

0:51
day for me um this is almost I'm almost

0:55
a fanboy at this point in time and what

0:57
that means is I really look up to my

0:59
guest he is a he is a person that I

1:01
follow I read pretty much everything

1:04
that he writes um if there was ever an

1:07
icon in the financial business and the

1:09
annuity business it's our it's our guest

1:11
today his name is mosha meski and let me

1:13
tell you a little bit about him he's a

1:15
tenured professor of business finance

1:18
he's a published author and a well-known

1:20
consultant he's based in Toronto Canada

1:22
he has an Ma and he got that in 1992 in

1:26
mathematical statistics he has a PHD got

1:28
that in 1996

1:30
in financial economics um he is a 2002

1:34
fellow of the fields Institute for

1:36
research and mathematical science

1:39
Sciences now now we get to the the fun

1:41
part and this is where I start following

1:43
him because that other stuff's way above

1:45
my head he's published 16 books

1:47
translated into six languages and has

1:50
authored over 70 peer-reviewed scholarly

1:53
arttic articles I need you to hang in

1:54
there with me put your seat belt on this

1:56
is important one of his books called

1:58
King Williams time which we're going to

2:00
talk about is about why the retirement

2:03
annuity of the future should resemble

2:05
its past and it's very very interesting

2:07
as a new book coming out uh this month

2:10
and at the time of this taping is June

2:12
of 2022 and it's called how to build a

2:15
modern T tontine scripts tips and

2:18
algorithms he is also a fintech

2:20
entrepreneur yes he is very busy with a

2:23
number of us patents and and

2:25
computational Innovations in 2014 he

2:28
sold a startup company

2:30
to a company that we use called canx

2:32
that provides the fees to our

2:34
calculators um he was named by

2:36
investment advisor magazine as one of

2:37
the 35 most influential people in the US

2:41
Financial advisory business over the

2:43
last 35 years he's delivered over

2:46
1500 presentations and keynote lectures

2:49
around the world including academic

2:52
seminars at Stanford Colombia and MIT

2:56
etc etc his current research is

3:00
fascinating because his interest

3:02
revolves around the history of how aging

3:06
consumers financed and paid for the last

3:08
few Decades of their life but he's

3:10
researching that on how that happened

3:12
over the last few centuries it is my

3:16
absolute honor to have mosha meski on

3:20
fun with annuities thank you so much for

3:22
being

3:22
here and you're very kind with your

3:25
introduction and your praise and uh as

3:27
you know uh you're quite the legend

3:30
yourself so I appreciate being here and

3:33
uh hopefully I can ask you just a couple

3:35
of questions when you're asking me

3:37
questions so that we get a bit of a

3:38
dialogue going absolutely obviously I

3:40
went through your background and and and

3:42
your education which is unmatched um how

3:46
did you land in the annuity space I mean

3:48
I mean you have a you know an a masters

3:51
in mathematical Sciences a PhD and

3:53
financial economics how do you get to

3:56
annuities how did that

3:58
happen so as as I'm sure you know

4:01
annuities are sort of a small part of

4:03
what I do my day is teaching

4:05
undergraduate and graduate students uh

4:07
my 22-year-old undergraduates don't

4:09
really care very much for annuities

4:11
sadly they're 22 years old they have

4:13
student loan debt they're trying to

4:14
figure out what to do with their lives

4:16
you know if you talk about student loans

4:18
they'll be interested if you talk about

4:19
mortgages housing you know health

4:21
insurance so there's this enormous group

4:24
of financial products out there that

4:26
consumers have to be aware of and as you

4:28
get older and as you get closer to

4:30
retirement obviously annuities are a

4:31
very very important component so uh you

4:34
know I I often tell people that when we

4:37
have a uh session for parents who want

4:40
to send their students or their kids to

4:43
uh University they come to our you know

4:45
gymnasium and they walk around and they

4:46
see the different areas that are

4:48
available and students come with their

4:49
parents you know these are high school

4:50
kids and they stop at my desk uh where

4:53
I'm selling the uh you know Business

4:55
course and the students say so what do

4:56
you teach and I say well I teach

4:57
retirement income planning and then they

4:59
move right along you know 10 seconds

5:01
later the Parents Day the Parents

5:05
Day the parents day so you know clearly

5:08
this is something that is age specific

5:11
so let me respond to your question how I

5:12
got into annuities sure uh I got into

5:14
annuities because uh I came face Toof

5:18
face with longevity risk at a very young

5:21
age longevity risk as you know is this

5:22
uncertainty about how long you're going

5:24
to live so my dad passed away to a very

5:26
young age he developed colon cancer and

5:29
passed away in his uh late 40s so you

5:32
know that's one side of longevity risk

5:34
uh my grandfather on the other hand just

5:36
passed away recently he lived to his

5:38
late 90s so look at that Divergence

5:41
there so to me what interested we sort

5:44
of I looked at that and said okay so you

5:46
know there's got to be some way to

5:47
manage your financial affairs with that

5:48
sort of uncertainty how do you manage

5:50
your financial affairs when you know it

5:52
may last as long short as 45 years it

5:54
can go as long as 95 years so that sort

5:57
of led me to the insurance as a solution

5:59
and Insurance's risk management uh that

6:02
that's sort of the short response to how

6:04
I got into it uh and you know I'd be

6:06
delighted to dig a little bit deeper but

6:08
uh you know coming face to face with

6:10
longevity risk is something that alerted

6:12
me to the fact that there's a need for

6:14
uh the annuities solution I also worked

6:17
as an intern for a while at a very large

6:20
uh insurance company in New York called

6:21
Tia C you know this is back in the 1980s

6:24
and of course they're very very big in

6:26
the in in the annuity space obviously or

6:29
qualified 401K 403b plans 401a plans so

6:33
I learned a little bit about the

6:34
industry there as an Actuarial trainee

6:36
many many years ago when I was trying to

6:38
figure out what I want to do with myself

6:40
uh so you know there are a lot of paths

6:42
that lead to it and recently it's been

6:43
an interest in history and the fact that

6:46
as I'm sure you know annuities predate

6:47
stocks and bonds so you know you think

6:49
mutual funds have been around forever no

6:52
actually annuities have been and and

6:53
that's the way people Finance their

6:55
retirement then my question to you being

6:59
just actually the thought leader in our

7:02
space is how has the annuity industry

7:05
done such a poor job in your opinion on

7:08
messaging the fact that we have the

7:10
Monopoly that everybody wants the

7:12
product which is Lifetime income how

7:14
have we how have we messed that up as an

7:15
industry because that just confounds me

7:17
every single day especially when people

7:19
say well I hate all annuities and I'm

7:21
like well that's stupid that's like

7:22
saying you hate all restaurants um makes

7:25
no

7:25
sense what has happened how is the how

7:28
have we gotten here to where annuity is

7:30
actually a curse word in a lot of the

7:33
consumer circles and also un uneducated

7:36
Financial

7:38
circles right so you know Stan with

7:40
every question that you ask me you have

7:41
to tell me whether you want the

7:42
10-second response the 10-minute

7:44
response or the 10-hour lecture series

7:46
response so I I want the consumer

7:48
response so dig in as long as you want

7:50
to dig in look so let me try to put this

7:53
in bite-sized pieces I think there's a

7:55
lot of confusion over what an annuity

7:57
really is the word annuity today is as

7:59
meaningless as fund you called it

8:01
restaurants I say funds you know when a

8:03
reporter calls me up and says what do

8:05
you think about annuities I say what do

8:06
you think about funds you know private

8:09
Equity Funds Venture Capital funds

8:10
mutual funds bond funds stock it's a

8:12
meaningless word you can attach it to

8:13
almost anything and uh legally what an

8:16
annuity is it's very different to what

8:17
an economist would call an annuity it's

8:19
certainly different from what uh you

8:21
know a media writer would call an

8:23
annuity it's just there's this vagueness

8:25
what is it uh and if you go back a few

8:27
hundred years the annuity meant

8:28
something very very specific very

8:30
wellknown very defined and then for some

8:32
reason you know 300 years later it means

8:34
almost anything to anyone so number one

8:36
is confusion about what this thing means

8:38
uh is number number two I think that uh

8:41
there was a period in the late 80s

8:43
possibly early 90s where the commissions

8:45
the fees that people were paying uh for

8:48
these either as a you know commissions

8:50
that were explicit where you know really

8:52
only 80% of your money goes to work or

8:54
commissions that were hidden and paid

8:57
because you couldn't surrender for 20

8:58
years were very very high atrociously

9:01
high unconscionably high and they gave

9:02
these instruments a very bad name now

9:05
those were very specific types of

9:06
annuities and they you know certainly

9:08
weren't all annuities so that that was

9:10
part of it uh I think that another

9:13
problem with annuities you know this

9:15
will be my last point before I you know

9:16
sort of turn it back to you is annuities

9:18
are sold annuities are sold to a group

9:20
of people that are vulnerable you

9:22
they're sold to older people you know

9:23
we're not selling it to 23 year olds

9:25
we're selling it to people that are

9:26
older and in some sense you know point

9:29
of this product is to generate some sort

9:31
of predictable income when you're no

9:33
longer able to make decisions yourself a

9:36
cognitive decline so when you have a

9:38
product that really is meant to help

9:40
people that are eventually going to

9:42
cognitively decline and help them deal

9:44
with the finances you know there's a

9:45
higher burden of care there because you

9:47
got to make sure that they understand

9:48
what they're buying they continue to

9:50
understand what they're buying sure and

9:51
in many cases annuities are quite

9:52
complicated so you have something very

9:54
complicated going to someone whose

9:56
ability to make those decisions decline

9:57
over time and that's a re for disaster

10:00
so in some sense there's a whole bunch

10:01
of reasons but I do agree with your

10:03
premise there's a lot of confusion

10:05
there's a lot of fear uh and there's

10:07
certainly a lot of backlash against it

10:09
hopefully that helps put this in context

10:11
and it does and I've and I've said to

10:14
Industry leaders and and and CEOs of

10:17
carriers to say just just let's just get

10:19
it down to a couple of words I'm you I'm

10:21
a marketer I understand how to Brand

10:23
things obviously and I think it really

10:25
comes down to um I I I go back to the

10:28
got milk ad where it just said got milk

10:31
I think we should have one that says got

10:32
guarantees or got lifetime income I

10:35
really believe we can frame the value

10:37
proposition of what we're doing and what

10:40
we're offering which you know with

10:42
10,000 Baby Boomers hitting the age 65

10:44
they're not looking for the next Tesla

10:47
or the next Microsoft or the next growth

10:49
stock they're looking for guarantees and

10:51
they're looking for Lifestyles which

10:53
leads me to my next question and I have

10:55
this vision of you mosha in the in the

10:59
bowels of some library in Europe reading

11:02
about tontines and doing your research

11:05
on where annuities first started but the

11:08
reason I bring that up is I want you to

11:11
correlate that to to the products that

11:14
are out there now and your hope to where

11:17
things are going to go and maybe you can

11:19
just give a brief um history of of

11:23
tontines because when you Google it it's

11:26
amazing what comes up one of the

11:27
questions that people have is are are

11:29
tontines illegal that's one of the main

11:31
questions that pop up so give us the the

11:34
dumb down version of what that is and

11:36
why you're attracted to that so you know

11:39
as usual Stan your questions could come

11:41
could take me you know five hours to

11:43
answer so I I I'm going to selectively

11:46
pick certain pieces of it sure because

11:48
for many of your viewers this may be the

11:49
first time in their life they've heard

11:51
the word tantine they don't know how to

11:52
spell it yet and and maybe they're

11:54
Googling it right now so you know

11:55
there's a lot going on so let me explain

11:57
a little bit of historical background

11:58
and hopefully this partially answers the

12:00
many questions you've just asked what

12:02
interests me why I'm fascinated with

12:04
history is because the narrative right

12:06
now in the financial industry is that

12:08
pensions are going away pensions are

12:10
going away defined benefit pensions are

12:12
no longer the norm for employees uh

12:15
Social Security the trust fund in the US

12:17
is you know on its way down so there's

12:20
questions about

12:21
sustainability and uh employers don't

12:23
really care about their employees once

12:25
they retire so you're on your own buddy

12:27
Argo we must all move into the annuity

12:30
space what interests me is what in the

12:32
world did people do prior to Define

12:35
benefit pensions not what are get they

12:37
going to do in the demise and decline of

12:38
defined benefit what did they do before

12:41
and uh you know if you take a look at

12:42
when Define benefit pension started you

12:44
know we're talking about the beginning

12:45
of the 20th century Social Security FDR

12:47
the 1930s uh if you're really familiar

12:50
with pension history then you'll know

12:51
the name bismar you know the German

12:53
Chancellor he starts pensions in 1880

12:56
and you know everybody's entitled when

12:57
they get old to get a pension what did

13:00
old people do before these State

13:03
programs now the the ignorant response

13:05
is that there were no old people prior

13:08
to 1880 and that bismar somehow

13:10
discovered that there's old people and

13:12
we need to give them pensions that is

13:13
simply not true life expectancy at Birth

13:16
might have been very low there were many

13:18
old people in fact if you go back to the

13:20
archives there are people that made it

13:22
into their 80s and 90s and I could spend

13:24
an entire hour going through all the

13:26
famous philosophers and Statesmen and

13:28
you know US presidents from the

13:30
revolution onward that lived far beyond

13:33
life expectancy what did they do how did

13:37
they get to retirement stop being able

13:39
to work and how did they get an income

13:41
and the next response TS to be well

13:43
their F family supported them they lived

13:45
at home and they didn't e it that's also

13:47
not true because of the fact that not

13:49
all of them had families and and many of

13:51
the families had moved away so once you

13:53
sort of eliminate all the nonsense

13:54
you're left with to how did they finance

13:56
their retirement and the answer is they

13:58
went out and they bought annuities they

14:01
went to the state they went to the

14:03
government they went to early insurance

14:05
companies they went to their local

14:06
church they let went to their parish and

14:08
they entered into a scheme where they

14:10
would be receiving an income for the

14:11
rest of their life guaranteed a word

14:13
that you like as long as they live in

14:15
exchange for a lumpsum right now uh in

14:18
fact the earliest nursing homes were uh

14:20
monasteries where people would go in

14:22
they were called corrodes where you go

14:24
into the monastery and say look I got a

14:25
bunch of money this is my Nest EG you

14:27
take it take care of me for the rest to

14:28
my life and they would in a sense issue

14:30
an annuity and the annuity would be paid

14:33
not just in in In Living somewhere uh

14:35
they'd be paid in beer and bread and

14:38
wine and you know a shirt once a year

14:41
and and that would be your annuity you

14:42
would be paid in goods and services part

14:45
of the products that people bought

14:47
hundreds of years ago to maintain

14:49
themselves in retirement was a name a

14:51
word that you just mentioned called a

14:53
tantine a tantine was one of the many

14:56
schemes that people used to finance

14:57
themselves in retirement

14:59
it was a scheme in which the longest

15:00
living people got the most amount of

15:02
income the people that didn't live a

15:04
long time got a smaller amount of income

15:06
it was a type of an annuity and I think

15:08
that you know with that background we we

15:10
understand that there are many different

15:11
ways to finance retirement in the Middle

15:14
Ages and and that was one of them and I

15:16
find the tontine an interesting scheme

15:17
and I think that there's more discussion

15:19
about bringing it back that's sort of

15:21
the three minute summary no I I got you

15:24
one of the words that popped out when

15:25
you use is the word scheme and in the

15:28
United States scheme is a bad word

15:31
scheme means we're taking advantage of

15:33
you scheme means you're um you there's

15:36
something we're not telling you and I

15:38
think that that word attached to

15:41
annuity um even though you know and I

15:45
know that's not the intended use people

15:48
go yeah see it's a scheme it's not a

15:49
scheme what he's saying is this was the

15:52
strategy that people were using at that

15:55
point in time um but even when you

15:58
Google tontine it says a scheme used you

16:01
know hundreds of years ago Etc um that's

16:05
an interesting word but don't you agree

16:07
that that word has some connotation

16:09
that's negative that people that aren't

16:12
up to speed on the history they say well

16:16
you know scheme means scheme's bad right

16:19
yeah so I'm a mathematical Economist so

16:21
I can use the word scheme because you

16:23
know I don't answer to that I don't

16:25
answer to that crowd I'm not a

16:27
politician running for office trying to

16:29
figure out you know let's test 10

16:30
different words and see which one the

16:33
public likes and I'm describing it the

16:35
way you know is described historically

16:37
you go back to the documents that was

16:39
the one but I I certainly agree with you

16:41
is that if I'm a marketing department in

16:43
a modern insurance company right I I

16:45
will stress test every word I use with

16:48
focus groups and you know I'm not even

16:50
sure I'd use the word tontine and Stan

16:52
since you brought this up many of the

16:53
tontines that are emerging around the

16:56
world and they are emerging there are

16:58
many examples of it if I were to take a

17:00
look at the common denominator of all of

17:02
them uh there is certainly a very

17:04
successful one that was just launched in

17:05
Australia uh there was one in South

17:07
Africa I was involved with there's some

17:09
in Canada all of them all of them the

17:12
common theme is they don't use the word

17:15
tantin and they certainly don't use the

17:17
word scheme they use the thinking behind

17:20
it they use the pooling and the risk

17:22
sharing uh but they don't use the word

17:23
because they feel that like you you know

17:25
people Google it and then they hear that

17:27
you know Homer Simpson in an episode of

17:29
The Simpsons lost money on a tontine so

17:32
hey Homer Simpson law I don't want Marge

17:34
yelling at me if I you know or or they

17:37
hear that it's illegal because the state

17:38
of New York in 1906 banned taunting

17:41
insurance so I agree with you that words

17:43
matter and we don't want to use scheme

17:45
and maybe not even use tantine but the

17:47
thinking behind it namely that people

17:50
that live a long time are subsidized by

17:52
people who don't and as you live longer

17:54
your income goes up uh that's something

17:57
that uh that makes sense you know to get

17:59
to a point that you made earlier we all

18:01
like the word guaranteed it's it's an

18:02
important word you know that's a word we

18:04
use scheme we don't use guarantee we use

18:07
sure but the problem is is that what's

18:08
guaranteed in today's lexicon what's

18:11
guaranteed is a nominal cash flow

18:14
nominal nominal means I have no idea

18:16
what this is going to buy me in real

18:18
terms nominal usually means it's not

18:21
adjusted for inflation nominal means we

18:23
have no idea what goods and services I'm

18:25
going to be able to buy with it I mean

18:27
honestly if I get guantee you $1,000 a

18:30
week for the rest of your life do you

18:32
really know 20 years from now what

18:33
you'll be able to do with

18:35
$1,000 I mean we really don't so we use

18:38
the word guaranteed but in some sense

18:40
it's a guarantee of a something but

18:42
anything that I want to buy with that is

18:43
not guaranteed so one of the reasons

18:46
that the tantine concept whatever you

18:49
call it is gaining Credence is the idea

18:50
is hey the longer I live I want those

18:52
payments to go up I'm not interested in

18:55
guarantees but I want something that

18:56
keeps up with the cost of living roughly

18:58
speaking and I think that's one of the

19:00
appeals but to sort of wrap this up and

19:02
to answer your question I think there

19:03
are lessons to be learned from how

19:05
people finan themselves in their older

19:08
age hundreds of years ago there are

19:10
lessons to be learned for today I may

19:12
not design an iPad or an iPhone the way

19:14
it was designed 300 years ago they

19:16
didn't exist but when it comes to

19:18
financing retirement there's something

19:20
about the way we did it in the past that

19:22
might resonate with the future and hold

19:25
that thought for a second we're talking

19:26
to mha meski just an icon in our

19:28
business now he's written some fantastic

19:30
books and we're going to have those

19:31
links on our site he's going to have his

19:33
own page like like all of our celebrity

19:35
guests do but some of the books that I

19:37
would tell you to to look at is one of

19:39
them that I love the seven most

19:40
important equations for your retirement

19:42
was fantastic obviously I've talked

19:44
about King Williams tontine which is one

19:46
of his books recent books which I've

19:48
read a couple of times he also has one

19:50
called pensize Your Nest EG which I

19:53
think is very good and then one that I

19:54
really like called Longevity insurance

19:56
for a biological age so he he brings it

20:00
down to your level he can do that but

20:02
you can tell by just him talking that

20:03
he's at another level I think if there's

20:05
ever an annuity Odd Couple that gets

20:08
along and and is on the same page it's

20:11
us you know because for me I consider

20:14
myself the annuity Whisperer that's

20:16
that's trying to dumb it down to a level

20:19
that I always tell people if you can't

20:21
explain it to a nine-year-old don't buy

20:23
it no offense to

20:24
nine-year-olds um and I think the great

20:27
part of

20:28
mosha is he he can change gears and

20:31
bring it down to a consumer level and

20:33
those books that I just mentioned are

20:35
are some of the ones that I'm going to

20:37
point you to and have links to where you

20:39
can go get them on Amazon let's go back

20:42
to the ton te mosha I um I'm fascinated

20:45
with this and I'm always thinking okay

20:46
where's the puck going to be I'm giveing

20:48
some hockey analogies since you're a

20:51
Canadian um instead of skating after it

20:53
where's it going to be do you ever see

20:57
tonen entering this country in a fashion

21:00
that it's the consumers can get it

21:03
understand it and then eagerly buy it so

21:07
you know it depends on who the audience

21:09
is that's listening to my response um

21:12
you know if if this is consumers it I

21:15
don't really if I don't really see the

21:17
word tanting catching on uh and and

21:21
becoming an alternative to an annuity

21:23
because of some of the historical issues

21:25
there um but I do think that here here's

21:29
the the business challenge asset

21:31
managers large asset managers are

21:34
realizing that their inability to offer

21:37
guarantees might hinder their asset

21:41
Gathering and certainly assets under

21:43
management uh model so people are moving

21:46
into retirement and they're saying all

21:47
right these mutual funds these ETFs were

21:50
great to help me accumulate wealth but

21:52
now I need a stable predictable I like

21:55
that better than guaranteed stable and

21:57
predictable income for the rest of my

21:58
life and I just can't get that from this

22:00
very volatile ETF for mutual fund and

22:03
the asset managers are going to see some

22:05
of that money perhaps a lot of that

22:06
money leak and leave towards the type of

22:09
solutions that you've been discussing

22:11
whether it's the annuities or the migas

22:12
or the qac or the DS and so on so there

22:15
are two ways that a from a business

22:17
point of view asset managers can deal

22:19
with that they can say well we're going

22:21
to partner with insurance companies and

22:23
we're going to somehow try to share

22:24
revenue or we're going to try to you

22:26
know keep some of the ass assets and and

22:29
and partner with insurance companies

22:30
because people like the predictability

22:32
and stability or they might say you know

22:34
what maybe we can enter into this

22:36
business without offering those

22:37
guarantees and the only way to do that

22:39
would be taunting like structures so the

22:42
short answer to your question is I think

22:44
that within five years you're going to

22:45
see asset managers offering things that

22:48
you and I would call a tontine whether

22:50
or not they use that word as

22:53
separate fascinating I think when PE

22:56
when you were initially describing ding

22:58
tones I think people stopped the car and

23:01
jumped off the treadmill when you said

23:03
the word increasing income because

23:05
that's the biggest question I get in

23:08
this inflationary world that we're

23:10
living in is you know how do we how do

23:13
how do we adjust for inflation how do we

23:16
address inflation and as you well know

23:18
mosha and I'm just telling this for the

23:19
consumers that are listening to this

23:21
when you attach an increase to a current

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

23:25
living adjustment in the past there was

23:27
CPI

23:28
Consumer Price Index increases but

23:30
annuity companies have the big buildings

23:31
for a reason as I always say they don't

23:33
give that away they just simply lower

23:35
the initial payment to make up for that

23:37
but when you start talking about tontin

23:39
adjusting and increasing can you go into

23:43
that for the consumer on what that might

23:45
look like from a 30,000 foot view yeah

23:49
so you understand that when I sit here

23:51
and we're having a conversation I have

23:53
four hands tied behind my back I don't

23:55
have a Blackboard I don't have my slides

23:57
I don't have the the graphics I

23:59
certainly can't do equations you'd

24:00
probably shut me down so there's a li

24:03
there's a limit as to how much this can

24:04
be explained to the point where the

24:06
consumer says Ah I get it you I'm sorry

24:09
we need to explain things you know using

24:10
certain but the idea here is is that if

24:13
you enter into an arrangement where

24:16
people that live a long time get to

24:18
share uh the benefits from something

24:21
since there are less people living a

24:22
long time they're going to share more

24:24
benefits so let let me try to put this

24:26
without any algebra imagine that you and

24:29
me and a group of our neighbors decided

24:32
to buy a 30-year treasury bond from the

24:35
US Treasury and it was a unique type of

24:38
bond that we all bought together us all

24:41
our buddies we bought it it's a bond

24:43
that pays coupons for 30 years but it

24:46
never pays back the principle at the end

24:48
never pays back the principle at the end

24:50
and you're saying MOS why would I buy

24:51
something that never pays back my

24:53
principal at the end and the answer is

24:54
because instead they'll give you higher

24:55
coupons so you know right now the

24:57
30-year rate would be 3% but you're

24:59
getting your principal back at the end

25:01
they'll give you seven or 6% and then

25:04
you don't get the principal back at the

25:05
end which is kind of an evening out of

25:07
your coupons we all all of us in the

25:09
neighborhood decide to buy one of these

25:11
bonds that are paying you know let's say

25:13
six% a year right and here's what we do

25:15
we've bought this Bond and we enter into

25:17
an agreement you and me and many others

25:19
look whoever is alive gets to share

25:22
those coupons we at the end of every

25:25
year are going to go to the local golf

25:27
club or the local bar and we're going to

25:29
all toast whoever's alive and we get to

25:31
split those coupons but if you're not

25:33
around you can't split the coupons so

25:35
let's imagine what happens when all of

25:37
us have bought this bond that after one

25:39
year we're all healthy we're good we all

25:41
get six% we're getting the $6,000 a year

25:44
on our $100,000 and then in a year from

25:47
now we come back to celebrate are we

25:49
alive and yeah we're all alive so we're

25:51
getting 6,000 but then at the end of the

25:53
third year God forbid one of us has a

25:55
heart attack or one of us has a stroke

25:57
or one of us is in a car accident we're

25:59
not there to toast our longevity and

26:02
suddenly there are less of us there's

26:04
less of us but we still have that $6,000

26:07
coupon we're sharing it over a smaller

26:09
group at the end of the year we have

26:12
that 6,000 coupon that's being paid but

26:14
it's being split with a smaller group

26:16
how does this work we have the same

26:17
amount of cash in the numerator to use a

26:20
mathematical term but the denominator is

26:22
shrinking there are less of us and then

26:24
10 years later you know say half of us

26:26
are still there other half have not made

26:28
well the numerator is still exactly the

26:30
same the denominator is shrinking each

26:33
one of us is getting a bigger and bigger

26:34
payment whoever's around 30 years from

26:37
now whoever's around 30 years from now

26:38
they're still giving out the 6,000 but

26:41
we're splitting it over a very very

26:43
small group we're getting a really big

26:45
coupon which is a naturally increasing

26:48
hedge in some sense against inflation

26:50
even though none of us bought an

26:52
inflation link Bond

26:54
mortality becomes a real interest rate

26:57
mortality mortality rate without having

27:00
to worry about buying inflation link

27:02
bonds and tips and ibonds and and

27:04
reserves so that is incredibly

27:07
uninteresting when inflation's at 2% or

27:10
less and nobody knows what inflation is

27:13
but suddenly in the last year or two

27:16
inflation is a very hot topic on Google

27:19
you Google it and you get you know the

27:20
engram that's a that's a word that's

27:22
coming up a lot president himself is

27:24
using that word maybe people start to

27:27
geted Ed in a scheme where there's this

27:30
natural increase so that's one of the

27:31
reasons you're seeing more hopefully

27:32
I've explained why this is increasing

27:34
over time but that's one of the reasons

27:36
you're seeing more of an interest in

27:37
this and I'm I guess in a glass half

27:41
full

27:42
scenario this Rising inflation is is

27:46
pushing people

27:48
to talk to you listen to you read you

27:51
and say okay let's let's look deeper in

27:54
this I was writing down as my marketing

27:56
brain was rolling on what could you call

27:59
this and what could you stamp this at

28:02
and just the acronym T RI came out which

28:05
is transfer of risk income which is

28:07
that's what it is you're transferring

28:09
the risk and you're you're or you're

28:11
sharing the risk um for income and you

28:15
can add another ey on top of that which

28:17
is increasing income which I think I

28:19
think that's the part that people will

28:21
listen to because in essence it sounds

28:23
like to me it's a lifeon annuity that

28:26
you're as long as you're living your um

28:28
people that that that have followed my

28:30
work you know what a lifeon annuity is I

28:32
always tell people when your Lear jet

28:34
hits the mountain money goes poof now

28:36
mosha gave it a much better um example

28:40
of that but it's a

28:42
lifeon taunting shared pulled risk of

28:46
which income increases for the people

28:48
that um are still breathing and I think

28:52
if it could be explained like that I

28:54
don't think people in this country would

28:56
have a problem with doing a product like

28:58
that um or at least a portion of their

29:01
what I call their income floor which is

29:03
social security dividends annuities

29:07
commercial and these type of new

29:08
annuities the interesting part is going

29:10
to be how they're

29:12
distributed within the industry and I

29:15
think that's going to be the challenge

29:16
obviously you're you know that everyone

29:18
else looking at it knows that but I

29:20
think we need as an industry to hey

29:22
forget the distribution let's put it out

29:24
there let's get it out there to where

29:25
it's you know and show people that that

29:27
it works and I think it would help the

29:30
annuity industry as a whole because

29:31
people would understand you're

29:33
transferring risk for Lifetime income I

29:34
always tell people I don't know the ROI

29:36
until you

29:37
die you know up until that point it is a

29:40
it's a transfer risk now you find

29:42
yourself over in Europe a lot in in in

29:46
libraries am I correct I'm envisioning

29:48
you over there all the time um actually

29:50
you're you're you're catching me when I

29:52
just came back two days ago from the

29:54
archives in Edinburgh in Scotland uh I I

29:59
don't want to bore your audience to

30:01
death but the Church of Scotland uh

30:03
introduced one of the first funded

30:05
annuities in the early 18th century when

30:07
you take a look at annuities it's one

30:09
thing for me to guarantee you a payment

30:10
for the rest of your life but if you're

30:12
smart you're going to say to me mosa how

30:14
are you going to make sure that that

30:15
payment is actually going to stay there

30:16
for the rest of my life it's one thing

30:18
for the king to promise payments but I

30:20
want the king to set aside some money to

30:23
make sure that those payments are going

30:24
to be made that's called a funded

30:26
annuity you can go back to Biblical

30:28
times kings were promising annuities

30:30
from Biblical times and then they

30:32
defaulted on them because they never set

30:33
aside any money for it the first entity

30:36
the first entity to actually set aside

30:39
money and say all right we've just

30:41
promised annuities to minister is we

30:43
better make sure we manage this money to

30:44
pay those annuities and we have to have

30:46
a large pool the first entity that did

30:48
that was the Church of Scotland in the

30:49
early 18th century it's the first funded

30:52
annuity period so I went and I was able

30:55
to gain access to their doc doents in

30:57
their archives to see how they designed

30:59
it it's the subject of my next book and

31:01
I don't want to give away too much but I

31:02
found it fascinating how they set that

31:05
scheme up and it was because ministers

31:07
and eventually University professors

31:09
said hey man I want an annuity when I

31:11
retire I want an annuity for my spouse I

31:14
want an annuity for my kids I don't want

31:16
to give them money they're gonna

31:17
squander it somebody will steal it from

31:19
them they don't know how to manage money

31:21
give them an annuity so that that was to

31:23
me quite interesting and I spent a

31:26
couple of weeks there they were very

31:27
kind and they gave me access to it so uh

31:30
the short answer is yes I do spend a lot

31:31
of time in archives and libraries when

31:34
you don't give away the farm because I

31:35
want people to buy the book because I'm

31:37
going to buy it as well but were you

31:39
surprised with some of the things you

31:41
found did you have any oh oh my goodness

31:44
moments hitting your forehead when you

31:46
found stuff or was it predictable what

31:49
you found in the archives you know to be

31:51
honest I thought I was going there to

31:52
cross the teas and Dot the eyes cuz like

31:54
I know what I'm going to find it's going

31:56
to be these documents but you know you

31:57
got to go through you got to do it right

31:58
you just got to make the pilgrimage you

32:00
got to touch the documents and come home

32:01
no there's a lot of very shocking very

32:03
interesting things in terms of how they

32:04
did things uh some of the participants

32:06
in these annuities I found interesting

32:08
the management of it uh some of the

32:10
concerns around fraud some of the

32:12
choices that people had there was a

32:14
parallel to some of the things that we

32:15
see today in Define contribution plans

32:17
there were defaults I one of the issues

32:19
that they had to contend with is you

32:20
know this is in Scotland they are

32:22
presbyteries uh spread across the

32:24
country you know how do you do you force

32:26
people into the plan or do you just you

32:29
know tell them if you want you can join

32:31
the annuity fund which is very similar

32:33
to defaults now in 401ks and DC plans

32:36
and what they said was well you had a

32:37
year to to to default to say I'm not

32:40
interested so they gave you a year

32:41
unless you in the north of Scotland then

32:43
they gave you two years because you know

32:44
it's a long time to get your notice back

32:46
there but if we didn't hear from you we

32:48
would default you into the annuity and

32:51
this is e echoing some of the discussion

32:53
now with secure 2.0 about what should

32:56
happen to a plan as they approach

32:57
retirement should we default people into

32:59
an annuity and they struggled with the

33:02
same thing 280 years ago I mean you know

33:04
we're forcing them into an annuity it's

33:06
a lifetime income product are they gonna

33:08
are the ministers going to complain how

33:09
do we default them so what I found

33:11
interesting was a lot of the parallels

33:13
with some of the things we deal with

33:14
today uh they they dealt with at that

33:16
time and uh it was uh you know that was

33:19
interesting to me some of the

33:20
administrative aspects of managing this

33:22
you know the Actuarial theory is 3% the

33:25
administration is 97 % how do you get

33:28
the lists of who's alive and who's not

33:30
alive and who's contributed and at what

33:32
rate did they contribute how big did

33:34
their pool have to be you there weren't

33:35
enough ministers in parishes so they

33:37
asked University professors to join

33:39
because they got a couple hundred more

33:41
people and now they can use the law of

33:42
large numbers anyway this is things that

33:45
interest me I'm a professor I can afford

33:47
to have that habit that is fantastic no

33:50
I'm I'm not a professor and and you're

33:52
sitting there and I'm like you know

33:53
listening intently to every word because

33:55
it just sounds fascinating because my

33:58
and I can't read wait to read the book

34:00
because I want to hear how they dealt

34:01
with these things how they dealt with

34:03
the problems that are similar in fashion

34:06
to what we're going to do now please

34:08
tell me mosha that our government the

34:10
United States government is hiring you

34:12
to help with these types of

34:16
ideas look I I've helped uh and I've

34:19
have one foot in the US one foot in

34:20
Canada so I I spend time teaching here

34:22
but I have a place in Florida so I've

34:24
done a lot of Consulting work for the

34:26
state of Florida the Florida State Board

34:27
of administration so I spent quite a bit

34:29
of time in Tallahassee many years ago

34:32
and uh that was about them converting

34:34
their defined benefit plan to Define

34:35
contribution because you know at the

34:37
time the governor Jeb Bush you may

34:39
recall uh one of his ideas was you know

34:41
we've got to give people choices and not

34:43
everybody wants a DB plan especially if

34:45
they're younger but the key was we

34:47
wanted to ensure the designers of the

34:49
fund wanted to ensure that uh people had

34:51
access to annuities at retirement when

34:53
you take away someone's defined benefit

34:55
pension and you say to them no you're

34:57
you're not going to get a guaranteed

34:58
income for life you have to give them

34:59
something similar which is an annuity so

35:01
I was there to help vet what companies

35:04
and what products would be allowed into

35:06
the plan put it on the shelf so to speak

35:09
uh that people would be able to select

35:10
as they moved into retirement and you'll

35:12
appreciate this the uh sponsors and

35:15
certainly the politicians didn't want

35:17
complicated annuities in there they

35:18
didn't want the the the security type

35:21
they wanted simple dasas and spas and

35:24
and and cacs and the question was you

35:26
know do you with the highest payout well

35:28
that's not necessarily safe because

35:30
sometimes the highest payout isn't

35:31
necessarily from a credit quality that

35:33
you want do you go with the highest

35:35
credit quality well the payout won't be

35:36
high what sort of options do you give

35:38
people so the short answer to your

35:40
question is I have been involved a

35:42
little bit in some localized projects

35:45
State projects but there are many

35:46
Brilliant Minds in the US in this space

35:49
and I know that many of them are helping

35:51
uh whether it's the treasury or the or

35:54
the fed or certainly the IRS in terms of

35:56
the tax treatment of these things so the

35:58
short answer is I am one of many

36:00
researchers that are interested in these

36:02
things and yes they are being tapped as

36:04
a group to help governments although you

36:06
know sometimes there's a communication

36:07
gap there it sounds too academic too

36:09
theoretical politicians may not like

36:12
it yeah it's it all comes down to

36:14
messaging when you're talking to the

36:15
consumer the consumer is the The

36:17
Listener to this podcast and and I think

36:19
that's one of the reasons this is one of

36:20
the fastest growing podcast in the

36:22
financial sector is because we're having

36:24
people on like you that's making people

36:26
think in they're hearing what you're

36:28
doing I guarantee they don't know what a

36:30
ton tontine is by the way it's spelled t

36:32
o n TI NE if you're Googling it um but

36:36
we'll have that link on on the site for

36:39
mosha as well um

36:42
so for you you're always it seems like

36:45
you're always digging in and trying to

36:47
find the next Blue Water as I call it

36:50
you know things that other people aren't

36:51
thinking about what hit me when you said

36:54
you know I'm not I'm not looking about

36:56
what people are going to do I wanted to

36:57
see what they were doing back then

36:59
that's a contrarian thought that's not

37:02
an a natural thought maybe it is for an

37:04
AC academian like you but not for the

37:07
normal person out here what's the next

37:11
Mountain you're looking to climb is

37:13
there something that's piqued your

37:14
interest that has caught your eye and

37:16
attention that you really want to dig

37:17
into because you've I know you can keep

37:19
digging into tontines and and that but

37:22
is there anything in the annuity space

37:24
that you're looking at that is new

37:27
so so look s you know how it is when we

37:29
academ it's like watching a star that

37:31
exploded the light that you're seeing

37:33
today was generated millions of light

37:35
years ago even the light that comes from

37:37
the sun came seven or eight minutes ago

37:39
so you know the tontine stuff that's

37:40
coming out now I worked on that 10 years

37:42
ago I'm not saying I'm bored by it I'm

37:44
not saying I'm not interested in it but

37:46
you know that that's been done you can't

37:47
sit you know your entire life at the

37:49
same well what interests me now once I

37:52
get this uh annuity fund out of the way

37:54
what interests me now is long-term care

37:57
namely that as people age as people age

38:00
it's not just that they want predictable

38:02
income for the rest of their life which

38:04
is great or guaranteed income they need

38:06
to know what will their expenditures be

38:09
and what will their health expenditures

38:11
be and how do they manage hedge and

38:13
ensure that so I have become interested

38:15
in the gap between lifespan and health

38:18
span lifespan is how long you live we've

38:21
talked about that longevity risk Health

38:23
span is how long do you live healthy and

38:26
the gap between Health span and lifespan

38:29
can be you know zero you got hit by a

38:31
bus sadly and the gap between lifespan

38:34
and health span can be 20 years you know

38:37
you get hit with something you're just

38:38
not in very good health anymore and now

38:40
you got to manage for the next 20 years

38:42
I think long-term care products

38:44
annuities that are linked to long-term

38:46
care long-term Hedges long I think

38:49
that's something that that needs to get

38:50
more uh investigation it needs to get

38:53
more attention uh money doesn't solve

38:55
your problems and I know that sounds

38:57
cliche you you need to do something with

38:59
it to solve your problems how many times

39:01
do you throw money at a problem and it

39:03
didn't solve it what do you mean I fixed

39:05
that Bloody air conditioner last year

39:07
Why didn't it get fixed and we got to

39:08
throw another how do we throw money at

39:10
things efficiently when it comes to

39:12
Health Care is something that interests

39:13
me because as you age that's going to be

39:15
a big deal it's not the money how do I

39:16
get better how do I you know deal with

39:18
arthritis forget about the annuity check

39:21
that's great thank you Stan for the

39:22
annuity check I need to deal with my

39:24
arthritis can you give me some

39:25
suggestions now that's not my bailey

39:27
Wick I don't deal with it well maybe you

39:28
should maybe you should get an annuity

39:30
that pays in arthritis medication and

39:32
and I mean that just sort of half as a

39:34
joke but that's something that interests

39:35
me now how do we deal with the long-term

39:37
care

39:38
challenge boy that's a big one I wasn't

39:41
expecting that from you but I'm glad I

39:43
asked because I'm now feel comfortable

39:45
with you going at it and figuring it out

39:48
obviously the long-term care space is a

39:49
different space because it's a health

39:52
insurance product not a life insurance

39:54
product a life insurance products um

39:56
life insurance companies issue annuities

39:57
for the people listening out there and

39:59
there are some annuity types that have

40:01
what's called confinement care or

40:03
enhanced benefit type um guaranteed

40:07
issue U products out there and we

40:09
certainly can show you those but that's

40:11
not what he's talking about he's talking

40:13
about

40:14
literally solving for specific things

40:17
now are you thinking and I'm I'm I'm off

40:20
base tell me are you thinking that in

40:23
the future there will be annuity type

40:25
products that are addressing not only

40:28
income but specific issues of health and

40:31
long-term care I do and I I I think that

40:35
you know when you think of activities of

40:36
daily living that trigger a long-term

40:38
care policy why can't I why can't I buy

40:41
a spia that uh as soon as you're

40:43
diagnosed with uh you know let's say you

40:46
can't do three of five activities of

40:48
daily living you can't bathe you can't

40:50
clo clothe your so you can't walk to the

40:52
bathroom I just you know the payment

40:54
triples why would I want the payment to

40:55
Triple well because now you're going to

40:57
have to hire someone to help you with

40:58
that I mean so because I it's not so

41:01
much the income that I want it's the

41:03
services that I'm going to get I I

41:04
really need the income income is just

41:06
part of it I need the income to get

41:08
goods and services you've solved part of

41:10
my problem Stan you're getting me the

41:12
income for the rest of my life I need to

41:14
get services and I need to get goods are

41:16
you helping me with that and some people

41:18
might say that's not my problem you know

41:20
go talk to a medical professional go

41:22
talk to a social worker what I'm trying

41:24
to say is no I think this is going to be

41:25
part of the finance because if you give

41:27
me a sum of money that doesn't quite

41:29
cover the services and the goods that I

41:31
need what's what's the point of that sum

41:32
of money especially if it's depreciating

41:34
over time so the answer to your question

41:36
is yes I see annuities having long-term

41:38
care Riders just like a lot of the life

41:40
insurance policies you can buy a life

41:42
insurance policy that is going to pay

41:44
out $100,000 as a death benefit but if

41:46
you need long-term care they'll multiply

41:48
it by five let me say that again you

41:51
have life insurance if you die the

41:53
beneficiary gets 100,000 but if you're

41:55
still alive and you need long-term care

41:57
you can draw down like a bathtub

41:59
$500,000 worth of long-term care over

42:02
time and and I can see a lot of people

42:04
saying yeah I want that I want that I

42:06
need to deal with aging I need to deal

42:08
with aging I've seen it with my parents

42:10
I need to deal with myself so this is

42:11
something that interest me you ask me

42:12
what's where's the puck going right I'm

42:14
a Canadian think where's the puck going

42:16
no I I love it I think the um I think

42:18
the issue and I'm always thinking from

42:20
the consumer standpoint how to get the

42:22
policy approved and to the consumer and

42:25
the benefits and place so when I'm

42:27
thinking that I I'm thinking okay

42:30
underwriting issues if if there are any

42:33
uh pricing issues from the carrier

42:35
that's issuing the policy but my hope is

42:38
that with this type of thought people

42:42
that have diabetes or that have pre

42:45
pre-existing conditions it would be

42:48
really nice if they could buy a

42:49
guaranteed issue product that addressed

42:52
that specific thing without having to go

42:56
and get underwritten whether it's

42:58
simplified issue or full underwriting

43:00
because as I always say annuity or or

43:04
long-term care companies they want to

43:05
they want to ensure young healthy people

43:08
um I think with 10,000 baby members

43:09
hitting 65 every single day most of us

43:13
and I'm in I'm not that there yet but

43:15
I'm I'm I'm not gonna tell everybody my

43:18
age because I look so vibrant and young

43:19
right most um but but I I would want to

43:23
buy something for pre-diabetic which is

43:25
who I am you know can I buy an annuity

43:27
that addresses that boy you talk about

43:31
opportunity and a niche market because

43:33
it sounds like to me that you're

43:36
thinking from the life insurance

43:38
standpoint that you can buy if you're a

43:39
smoker you can buy life insurance

43:41
because you're a smoker you know it

43:43
might cost you a little bit more but

43:45
it's never been addressed from the

43:46
standpoint of health issues from an

43:48
annuity standpoint and that's what

43:49
you're talking about that is

43:51
absolutely fascinating which means my my

43:54
spia calculator would be spia calculator

43:57
healthy spia calculator pre-diabetic

44:00
spia calculator cancer spia calculator

44:04
whatever you know St one of the things

44:06
that I've been sort of puzzled by is why

44:09
people don't ask for underwritten

44:11
annuities uh more meaning look I want an

44:15
annuity but I'm not in good health pay

44:16
me more I'm not going to cost you as

44:18
much uh in the UK in uh England Scotland

44:22
there's something called impaired

44:23
annuities where you say look I want an

44:25
annuity so I I I could certainly see

44:27
that uh if we can dig just a little bit

44:29
more into the Actuarial without turning

44:31
off your audience when you buy an

44:34
annuity from an insurance company

44:35
they're worried you're going to live a

44:36
very very long time that's their fear

44:38
they got to set aside capital and

44:40
reserves for that but if at the same

44:42
time you add to it something that pays

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

44:46
need then there's an internal hedge in

44:49
there because the actuaries are saying

44:50
look both aren't going to happen this

44:52
person isn't moving into a nursing home

44:54
tomorrow and living 40 years so they can

44:56
suddenly be a little bit better in

44:58
pricing what I mean is usually you buy a

45:01
toaster and you buy a fax machine you

45:03
know using the historical analogy you

45:05
never think of combining a toaster and a

45:07
fax machine like what but what if I told

45:10
you get a really really cheap because

45:12
the underlying mechanism for the toaster

45:14
and the fax machine are exactly the same

45:15
we can combine it we can make it cheaper

45:17
I think when it comes to long-term care

45:18
you might be able to get a better spia

45:20
payout a better pay your calculator will

45:23
show a higher payout if not necessarily

45:25
they come in and they say I've got

45:27
pre-diabetes I say I also want to buy a

45:29
long-term care Rider attached to it

45:31
it'll be cheaper than combining them

45:33
together I I I do think that if you're

45:34
in the annuity industry you have to have

45:36
some conversations around this you have

45:37
to be aware of it it's going on in the

45:39
background you need to understand it's

45:42
not the money that people want it's the

45:44
stuff they're going to do with it I

45:46
think that's the key message here and I

45:49
think the future of the annuity industry

45:51
is solving is right now the annuity

45:53
industry says we can solve the income

45:55
stream here here's the income stream

45:56
then go solve whatever you got to solve

45:59
and I think the future is like you're

46:01
saying here's the annuity income stream

46:04
that will also solve and and Target what

46:07
you're worried about instead of just

46:09
throwing it at you and say go get it I

46:11
think that's um that's fascinating now

46:14
to answer your question about why don't

46:16
people do um underwritten speeds there's

46:19
just not many I mean it's not

46:20
competitive and the great part about the

46:22
annuity industry in my opinion for most

46:25
products BSD QX MOS index anties

46:27
whatever these are commodity products

46:29
there's there's there's Bunches of them

46:31
and you shop them for the highest

46:32
contractual guarantee I always tell

46:33
people to do that you want annuity for

46:34
what it will do not what it might do but

46:36
if you're doing an underwritten spia and

46:38
for the consumer out there what you're

46:40
saying to the annuity company is you're

46:42
proving to them that your life

46:43
expectancy is actually less which means

46:46
that the payments will be fewer which

46:47
means that the payments will be higher

46:49
that's what that means that's what mosha

46:51
is talking about the problem now is

46:53
there's maybe one or two maybe maybe

46:56
three tops companies that are doing

46:59
underwritten immediate annuities at this

47:00
time in the United States that is a

47:03
problem big time so I would love that

47:05
but I for whatever reason companies have

47:08
shied away from that yeah so Stan you

47:10
know it's a chicken and egg issue you

47:11
know what comes first I mean nobody's

47:13
interested in it so companies don't find

47:15
the need to maintain an active line

47:17
marketing keeping your registrations you

47:19
know satisfying it's not worth it uh but

47:22
then if the demand comes there then the

47:24
the company see opportunity so you know

47:27
the question is what's going to happen

47:28
first is somebody going to get up and

47:29
say we're starting to offer impaired

47:30
annuities and just let's give it a try

47:32
or will advisers uh people such as

47:35
yourself influencers you know with a

47:37
very wide audience and readership say

47:39
Hey you know it's time to bring these

47:40
things in we might increase the size of

47:43
the annuity message from people who say

47:45
look I'm not in great health I would

47:47
like to get one of them well and what we

47:49
have to do when we we go through that

47:51
process as someone says I want to

47:52
underwrite a spia to see if I can get a

47:54
better payout because I'm going to prove

47:56
that my life expectancy is less we warn

47:58
them upfront that there is a good

48:01
possibility you're going to be

48:03
denied and that's a problem as well I I

48:06
think if there would be a simplified

48:08
issue type underwritten spia consumer

48:11
friendly I think people would flock to

48:14
it just because a lot of people have

48:15
underlying conditions and would like to

48:17
get you know in essence an accelerated

48:20
payment but I I think it's fascinating

48:22
where you're headed with this I

48:23
encourage you to to dig into the long

48:25
term care side

48:27
because as you know the long-term

48:30
traditional long-term care there's not

48:31
many carriers left in the United States

48:33
for a myriad of reasons and there's

48:36
three different types of long-term care

48:38
which you know I have a long-term care

48:39
expert on and we go through those things

48:41
his name is Jack lindenberg he's

48:43
fantastic if you want me to point you to

48:45
him um but I think that's that's

48:50
interesting where you're headed what's

48:52
the difference between Canadian and US

48:55
type an new you know I get I get a lot

48:57
of calls from from people that watch my

48:59
videos and and podcasts I'm sure that

49:01
you're you being on will give those

49:03
Canadian calls in yeah what do you see

49:06
up there yeah so it's it's very

49:08
interesting that you you asked that so I

49:10
am a Canadian and US citizen right which

49:12
means that I file taxes in both

49:15
countries lucky me um I mean I don't

49:19
even want to start talking about what a

49:21
patrion huh yeah what get well there's

49:23
some tax credits that you get for one

49:25
not 100% tax credits I I I could do a

49:28
whole podcast on on tax regimes in fact

49:30
my PhD thesis was on the reconciliation

49:32
of the Canadian and US tax system But to

49:34
answer your question there are many

49:36
annuity products that are available in

49:38
the US that are simply unavailable in

49:40
Canada correct so when I purch I own

49:43
three annuities I mean we can get into

49:44
which ones but I I bought them all as an

49:46
American citizen with a residence in

49:48
Florida because you simply can't get

49:50
them here they don't exist they're not

49:52
offered and why the Innovation hasn't

49:55
hit here here may be part of the fact

49:56
that there's more defined benefit

49:58
pensions here per capita than there is

50:00
in the US but for all of you that are

50:01
listening to this all three of you that

50:03
happen to be Canadian and US citizens

50:05
who happen to have a Canadian residency

50:07
and a US residency all one all one of

50:09
you if you're buying one of these things

50:11
get it from Stan in the US even if

50:14
there's a Stan in Canada that's right

50:16
that's that well obviously we we we

50:19
appreciate that um and we do like

50:21
working with people all across the

50:22
United States and if there was a chance

50:24
for us to do Canadian we would cu we do

50:25
get a lot of those calls um if you were

50:29
annuity

50:30
Zar and you were sitting over top of

50:33
everything what would you

50:36
change I know it's loaded and Broad but

50:38
pick something yeah yeah so

50:41
unfortunately there isn't such a

50:43
position you know insurance is regulated

50:44
by the state so there are 52 or 51 let

50:47
me dream I'm dreaming okay all right um

50:51
I I think that uh if I could throw you

50:55
know a couple of hundred million dollars

50:56
at the problem which is what Zars are

50:58
allowed to do these days they can go to

51:00
Congress they put in a footnote and

51:02
before you know it 100 million dollars

51:03
has come into their budget uh a you know

51:06
a public advertising campaign to clarify

51:09
what these things are and how important

51:11
they are to reduce the financial

51:14
illiteracy around these products don't

51:17
have it run by companies or Affiliated

51:20
organizations that where you they got a

51:22
bias they're not really and I'm I'm the

51:24
last one to say let's hand it over to

51:26
government but you've just given me a

51:27
government job I got to figure out what

51:29
to do right I'm not saying let's hand it

51:31
over if you handed me a government job I

51:33
would suck out that budget and say let's

51:35
get this thing clarified here are the

51:37
different types here's what they do

51:40
these are the different vitamins A B C D

51:42
and here's what the vitamins do and we

51:44
put it on the package and and there's

51:46
Clarity around the nutritional content

51:48
of these things I go to the store I pick

51:50
up my vitamins I know am I getting zinc

51:52
in there there's no zinc my doctor said

51:54
I needed zinc let's pick up the

51:56
multivitamins with that sort of clarity

51:58
of message and Clarity of ingredients

52:01
and Clarity of what are these things is

52:04
what I would do 's let's get a messaging

52:07
campaign out there uh instead of putting

52:09
more roadblocks or barriers or

52:11
legislative uh roadblocks in front of

52:13
the or or mandating anything for that

52:15
matter and I would do the exact same

52:18
thing it would all be about messaging it

52:19
would all be simplified it would all be

52:22
repetitive and easy to understand it

52:24
would stick in the back of your head and

52:25
you'd understand when the word annuity

52:27
was used whether it was got guarantees

52:29
or transfer of risk or whatever we came

52:32
up with I think that's the biggest

52:34
problem with an industry that has a

52:37
monopoly an absolute Monopoly on

52:40
Lifetime income how that how this is in

52:42
a multi-trillion dollar market annually

52:45
I don't understand and sometimes it

52:48
feels like I'm screaming into a

52:49
hurricane with people that don't under

52:51
that the industry that doesn't seem to

52:53
care because they're making some much

52:55
money last question mtion I appreciate

52:57
once again mtion meski we're going to

52:59
have his stuff on the site but boys it

53:01
been a pleasure and I could talk to you

53:03
forever and hopefully one of these days

53:05
we our paths will cross especially in

53:08
Florida I live in Florida and Las Vegas

53:10
so maybe we'll or Florida P will cross

53:12
but this is the last question and I do

53:15
it with all my celebrity guests I don't

53:16
give my heads up on it but it's called

53:18
the mic drop moment and what I want you

53:20
to do is I'm going to hand you the mic

53:22
and you're G to say something that you

53:24
think that consumers out there that are

53:26
listening to this need to hear and walk

53:28
away with because you're motion meski so

53:31
Mike drop moment mosha

53:36
meski yeah I I think that consumers

53:39
should pay more attention to what fees

53:42
commissions and um you know Revenue

53:45
sharing agreements uh exist with all the

53:47
financial products that they buy I think

53:49
many of them are embarrassed to ask this

53:51
they have a good relationship with their

53:52
financial adviser their local insurance

53:54
agent local car insurance sales person I

53:57
think that people have to become more

53:58
accustomed to look what what's the

53:59
markup on this thing you know I'm buying

54:01
a car this is what I'm paying you know

54:03
you can easily spreadsheet and compare I

54:06
think that would also solve part of the

54:07
problem the skeptic in the consumer says

54:09
yeah you're making a big you know you're

54:11
ripping me off well if you disclose that

54:13
it wasn't that much you know maybe I'd

54:16
feel more comfortable with it it's not

54:17
just I don't understand it even if I do

54:20
understand it I'm concerned that it's

54:21
very opaque and I don't understand how

54:23
much I'm making so ask a a questions

54:26
that's the mic drop moment learn to ask

54:28
awkward questions to people you like

54:31
yeah I know I have a great relationship

54:32
with my advisor but here's an awkward

54:34
question exactly how much money are you

54:36
making from this I love that I'm I'm I'm

54:40
gonna I that might be a t-shirt mosha

54:42
that we have us ask awkward questions to

54:46
get the right answers I really

54:47
appreciate that and I really appreciate

54:48
you joining me and thank you so much for

54:50
everyone out there that's that's joined

54:52
us on all the podcast platforms then

54:54
YouTube

54:55
Channel called fun with annuities and I

54:57
will see you next

55:03
week