MYGAs vs Inflation: How to Lock In Guaranteed Returns

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Hi there, Stan the Annuity Man,

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America's annuity agent, licensed in all

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50 states. I'm amped. I'm ready to go. I

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just had six Oreo cookies.

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So, sugar flowing through the veins. You

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know what I'm saying? I feel good. And I

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feel good also because we have a good

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topic today about multi-year guarantee

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annuities and how they solve for

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inflation, how they can solve for

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inflation, and at least address it in a

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pragmatic and contractual way. So,

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because I'm all sugared up and ready to

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go, it's time for music.

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[Music]

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Alrighty then. So, that's kind of a Jim

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Carrey thing. Alrighty then. We're going

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to talk about multi-year guarantee

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annuities. Let's do a little bit of a

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history lesson. This is the annuity

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industries version

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of of a CD, a certificate of deposit. Is

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it a CD? No, it's an annuity. It's a

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fixed rate annuity. But with a CD, as

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you all probably know by now, you lock

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in a specific interest rate for a

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specific period of time that you choose.

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With a multi-year guarantee annuity

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that's issued by a life insurance

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company, you lock in a specific interest

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rate for a specific period of time that

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you choose. Now, the di the primary

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difference between differences between

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multi-year guarantee annuities and CDs.

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Number one, the backing of CDs, which is

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FDIC insurance. It's the best. It's the

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best coverage you can get. F stands for

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federal. F stands for we're going to

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freaking tax you and get the money. F

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stands for good. It's it's the best

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coverage you can get out there. Now,

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with multi-year guarantee annuities,

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those have a backing of the state

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guarantee funds. Now, don't don't buy

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the annuity for that. Buy the annuity

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for the claims paying ability of that

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multi-year guarantee annuity issuing

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carrier. Now, state guarantee funds are

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fine. Every state has one. Every state

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has a different dollar amount that

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they'll back policies to a specific

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limit. But understand this, in the

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annuity industry, you cannot use mult uh

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the state guarantee fund in a sales

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pitch. You can't lead with that. You

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know, you you really can't you

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shouldn't. You should buy the annuity

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for the claims payability of the

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carrier, the ratings, the solveny ratio,

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you know, ask me when we get on the

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phone to say, "Hey, is this a good a

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good company? Can they back up the

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claims?" That's what you look at. And

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also, the other difference is multi-year

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guarantee annuities. In nonirra

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accounts, you can own multi-year

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guarantee annuities in all all accounts,

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Roth IAS, traditional IAS, and nonAS.

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But in a nonirra account, the interest

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grows and compounds tax deferred. There

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are some migas that have simple

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interest, but most of them are compound

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interest, but it's a tax deferred

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nature. Whereas in a nonIRRA CDs, you

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have to pay taxes on that interest every

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year. But let's talk about inflation.

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Now, inflation's the gorilla in the

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room, every like, wait a minute, you

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know, does that interest rate, is that

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going to address inflation? I don't

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know. You don't either, by the way.

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Nobody knows. Um, at the time of this

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taping, look at the time of this taping,

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you know, the 10-year Treasury and the

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Treasury rates are at perceived lows,

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but if you compare those like the

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10-year Treasury equivalent across the

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globe in other countries, we still have

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the highest rates at the time of this

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taping. That doesn't mean they're Jimmy

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Carter rates. I mean, we all remember

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those great CD rates back in the day.

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We're probably not going to ever see

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that in our lifetime. So, how do you use

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Migas to address inflation? my opinion,

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America's annuity agent, top agent in

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the country. The way to do that is to

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ladder them. And let me give you an

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example. I had a call the other day.

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Gentleman called up and he said, "You

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know what? I'm thinking," he was a

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doctor. He's a really good really good

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guy. And uh he had been thinking about a

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long time. You know, doctors, they're

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just pragmatic. They're like looking

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into and do the research. And I sent him

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my books and he watched the videos and

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he'd listen to the podcast and all that

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stuff. He said, "You know what, Stan the

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Annuity Man? I think I want to do a

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$400,000

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MIGA ladder. I said, "Okay, great. Let's

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do this. Let's let's put a h 100,000 in

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a two-year, a threeyear, a four year,

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and a 5year. At the time of this taping,

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you can buy longer duration multi-year

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guarantee annuities. But I think

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fiveyear is kind of the sweet spot, my

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opinion. So, we had a 2-year, threeear,

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four year, and 5year. The way that that

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addresses inflation is you have money

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coming due and maturing, that policy

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maturing starting in year two. And at

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the at that time, you could either cash

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the money out with interest, get the

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money sent back to you, or you could

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roll it, do a a a 1035 transfer non-t

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taxable event or IRA to IRA transfer

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non-t taxable event to a higher

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hopefully higher guarantee. So that

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every year starting year two, I'm going

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to be on the phone with him and say,

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"Okay, what do you want to do? You want

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the money back or you want to roll it?

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You want the money back or you want to

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roll it all the way until five years?"

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And a lot of my clients do that. they

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keep rolling and rolling and rolling

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these interest rates, which is

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fantastic. The great news about

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multi-year guarantee annuities um and

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CDs as well, CDs are great products,

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right? Right now, they're just really

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low, is the fact that there's no annual

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fees. There's no moving parts. There's

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no market attachments. It's very easy to

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understand. The commissions are very

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low. They're built into the policy just

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like administrative cost, light bill,

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water bill, whatever from these annuity

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companies, just part of the

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administrative cost. But if you put

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$100,000 in, you're going to see

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$100,000 go to work for you. Now, I

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would encourage you to go to my site at

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theanuityman.com.

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And on the front page, you're going to

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see a big yellow box that say CF fix

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rates or live fix rates. You can click

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that, put in your state, put in the

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duration that you're looking for, and

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then it will pop and list all of those

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companies from the highest yield to

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maturity on down and show the ratings,

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etc. And you can actually even click a

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more info uh link on that page and get

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the brochure sent to you and more

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information on that specific MA. But

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from an inflation standpoint, there's no

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good answers. It's just bad sales

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pitches with inflations with inflation.

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MAS, the way to do it is just ladder the

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maturities. Or if you say, Stan, I don't

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want to do a ladder, but I think in

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three years or five years, I think rates

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will move them by threeear or a

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fiveyear. But there's no perfect answer.

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Now, people always ask me, "Hey, Sandy,

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the annuity man, America's annuity

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agent. How does this multi-year

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guarantee annuity yield more than a CD?

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That doesn't make sense. A CD over here

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at the bank, I love my banker." And they

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give me a toaster and they're nice to me

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when I walk in, they hug me, but their

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CD rates are horrific. How's this

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multi-year guarantee annuity beat that?

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Well, remember, life insurance companies

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issue annuities. They issue all types,

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including multi-year guarantee annuity

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mas, right? But there's a dynamic

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pricing model with life insurance. So

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they're not just looking at the 10-year

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Treasury or current interest rates. They

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have bonds in the portfolio has been

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there for decades. They have they issue

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life insurance. They know when we're

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going to die, right? So they know how to

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price that. They issue lifetime income

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products, meaning you're giving them a

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lump sum of money and they're giving you

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money back over your life expectancy.

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And then they look at current interest

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rates and other things that are

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happening within the company. In other

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words, they're not just pulling from

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just the current interest rate level.

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They're pulling from a myriad of um

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strategies within their portfolio to

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price that multi-year guarantee annuity

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guaranteed interest rate that you're

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seeing. So, that's the reason that

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they're higher. Does that mean they're

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better than CDs? Absolutely not. But in

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the world of protecting your principal

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and getting a guaranteed interest rate,

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it's a pretty good option to have. So,

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is a MIGA a good investment? Is a MIGA

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safe? That's good. That's good questions

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to have and ask. Of course, I asked them

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for you. Is it safe? It depends on the

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claim spanability of that carrier. Now,

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I'm the person that you need to talk to.

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Go to the theanuityman.com

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top lefthand corner of the homepage,

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book a call. You get me at the time of

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this taping. Hopefully, my health holds

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up and you're going to talk to me and

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we're going to talk about the the MA in

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your state that you've looked at. You've

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gone to my live feed and you've pointed

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it out. You've gotten the information.

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You've gotten my books on MAS. You're

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saying, "Hey, Stan the Annuity Man, is

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this a good MA company? Is it safe? Is

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it a good investment?" Well, with MAS, I

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take a little bit different approach

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from the analysis standpoint. If you're

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asking me, Stan the Annuity Man,

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America's annuity agent, I'm looking at

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a lifetime income stream for me and the

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wife or me and the or me and the

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husband. Well, that's a different

8:24
analysis. I'm looking at can that

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company pay a lifetime income stream for

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your projected life expectancy for as

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long as you're breathing. But with mine

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does, I'm it's a little bit different.

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I'm looking at the duration. So, let's

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just say there's a B+ rated company that

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has a 2-year or a three-year multi-year

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guarantee annuity, and that interest

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rate is the highest one out there in the

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country. So, your question has to be,

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"Wait a minute, Stan the annuity man. I

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would really like to have an A+ company

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there be the top, me and you both." But

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that didn't happen a lot. So, what do I

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do, Stan? Do I buy the B+ company? Well,

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I'm going to tell you if I think it's

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safe. I'm going to put my rear end on

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that line. Okay. But I'm only looking at

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the duration. So, if you're saying,

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Stan, I'm looking at this two-year.

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Should I buy that? I'm going to say, I

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think for those two years, they can back

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up that claim because after those two

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years, we're going to be gone. I'm

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either going to send you the money

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because you want to cash it in or we're

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going to roll it to another annuity. And

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most likely, it will be with a different

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carrier. Um, unless that carrier has a

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high renewal rate.

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So, in other words, I'm doing a

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different analysis. I'm saying, "Okay,

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can they back up the three-year claim?

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Can they back up the two-year claim? Can

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they back up the five-year claim?"

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That's a completely different analysis

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um when compared to can they back up a

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lifetime income stream. And I'm not

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saying we're bottom fishing, but I'm

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saying we're realistically looking at

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how long your money is going to be with

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that life insurance company when you buy

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this MA. And when it comes to inflation

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and us looking at how to address that

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and looking at lading these these

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maturities like say a two or three or

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four and a fivey year like we did with

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this gentleman, this doctor that said,

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"Hey, I got $400,000. Let's put $100,000

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in each tunch." Two, three, four, and

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five. I'm looking at each one and going,

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they can back up the claim for that time

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period. They can back up the claim for

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that time period. So, I hope that helps

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when we get to the finish line of you

10:19
making a decision. do I implement that

10:22
into my portfolio? And if you do decide

10:24
to work with us, you're going to be

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working with the best team on the planet

10:27
from administrative side. We take a care

10:29
of everything from start to finish,

10:30
whether it's IRA, nonirra, Roth IRA,

10:33
assets, whatever you choose. So, but

10:36
when it comes to inflation, we're just

10:38
going to have to ladder things because

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nobody knows where inflation's going to

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go and nobody can predict whether

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interest rates are going to go higher or

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interest rates are going to go lower.

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And to talk about that for just one

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second. For the last six years, at the

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time of this taping, I've received the

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following phone call. Hey, Stan the

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annuity man. Interest rates have to go

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up, right? For the last six years,

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they've gone down. Can they go farther

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down from the at the time of this

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taping? You darn right they can. They

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certainly can. Do I hope they do? No. I

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hope I hope they don't. I hope they go

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up. I want you to have higher interest

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rates, but they could go down. They

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could go to zero. They could go

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negative. I hope that doesn't happen.

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But that's the reason we need to keep

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the maturity short when you do the MA

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ladder. Listen, I'm so glad that you

11:23
joined us for this video on MAS. I was

11:25
kind of going, you know, we tried to do

11:27
some time frames here, like they don't

11:28
want me to just talk forever. Of course,

11:30
I could talk forever. And so my CEO is

11:32
in the back, you know, holding her hands

11:33
up going, you know, it's time. Slow

11:36
down. I'm like, I thought she was doing

11:37
a hallelujah. Hallelujah. Stand the

11:39
annuity, man. Preach it. Preach that

11:41
mag. That's not what she was saying.

11:44
That's okay. Listen, I am so glad you

11:46
joined us for this video. Keep joining

11:48
me. I'm I'm putting these things out as

11:50
much as I can, as fast as I can, as fast

11:52
as they can edit. So, hit the subscribe

11:55
button and I'll see you on the next Stan

11:57
the Annuity Man YouTube video.

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[Music]

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[Applause]