Swap Your Income Rider for a SPIA: Shootin' It Straight With Stan

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welcome to shooting it straight with

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Stan I am your host Stan the annuity man

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America's annuity agent licensed in all

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50 states so glad you join me for this

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topic which is a good one and it came

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from my good friend John Lind I call him

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the annuity architect if you not

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familiar with John you should be he's

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one of the smartest people in the

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annuity room and that is including

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myself big statement but I do this fun

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with annuities podcast that you can find

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on all major podcast platforms and John

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is a frequent guest on that um podcast

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because he's so darn smart he makes me

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look good and anyone who makes me look

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good I hang out with you know what I'm

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saying um it's kind of like a lead

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singer and you're like in the lead

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guitarist is like Jimmy Hendricks or

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Eddie Van Halen that's John Lind now he

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and I were talking the other day and he

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told me about a case and I've seen these

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before but it's worth us talking about

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uh me and you of course exchanging your

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income writer for a spia a single

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premium immediate annuity now there's a

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that that's a loaded statement I mean so

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we've got to we've got to dig in a

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little bit here um because it's not that

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easy in other words I got an inome rer

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I'm just gonna flip that thing to a spia

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and you don't need an agent to do that

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either it's got to mathematically work

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in your favor for that to happen I'm

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going to go through that but John told

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me a great case that he was working on

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that they looked at the income riter and

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this in this case it was a attached to a

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variable annuity and it can be attached

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to variable annuities or index annuities

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but an income writer just to give you um

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a glance at that and what that is from a

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30,000 foot view that's an attachment to

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a policy variable annuity or index

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annuity policy at the time of

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application that guarantees a lifetime

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income stream you can set up your life

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joint life Etc but it's a separate

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calculation from the accumulation value

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I know I'm going fast I'm going to stop

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accumulation value in real terms is the

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real money in the variable annuity side

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that's the separate accounts meaning you

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call the mutual funds and the index

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annuity world that's the index option

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strategy caps and spreads and

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participation

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rates and that stuff the the walkway

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amount so if you draw a line down a

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blank sheet of paper visually you know

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left hand side is the accumulation value

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side again for variable annuities it's

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the mutual funds I.E separate account

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and the index annuities these caps and

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spreads of participation the index

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option side and then the other side is

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the income Rider two separate

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calculations and typically the income

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writer is higher than the accumulation

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value you say wait a minute why why you

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say that cart blunch stand the annuity

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man is because the annuity companies

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annuities issued by life insurance

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companies the life insurance companies

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they want to keep your money and the

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then the income riter is not

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transferable that amount in the income

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rer Side Of The Ledger is not

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transferable if you decided you wanted

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to transfer the

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money okay so now we're getting to the

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meat of the matter so how do you even

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determine if you can legally morally

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ethically transfer it to an immediate

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annuity here's what you have to do you

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have to take the accumulation value of

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the policy not the income riter value

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the accumulation value of the policy and

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you have to ask that that company to

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give you two that you're with currently

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to give you two um guaranteed

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contractual numbers n the number one the

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income writer number of what that

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lifetime income stream would be and

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number two the annuitization number the

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the spia number if you took that

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accumulation value and you converted it

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into a single premium immediate annuity

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and most of these policies will allow

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you to do that and then you go to my

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site at the annuity man

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obviously you schedule a call with us

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we'll walk you through this process and

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you can run a single premium immediate

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annuity

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quote using the accumulation value the

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walkway amount remember again variable

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annuities that's the separate accounts

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and the mutual funds that value and

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index anties that's the cap spread and

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participation rates index option value

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that walkway amount minus surrender

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charges right and so you run that number

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on our site single premium immediate

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annuities um our calculator there and

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see what the number is now in this case

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what John was telling me is the income

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writer number they looked at the income

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writer number and the single premium

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immediate annuity number quoting all

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carriers beat that number using the

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accumulation value unbelievable okay

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that's incredible shouldn't happen but

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it did and it was a big case and it was

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in the client's favor I mean it was a

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huge difference between the guaranteed

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lifetime income writer amount that the

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variable annuity was was offering and

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the single premium immediate annuity

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using the accumulation value not the

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income riter

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value to quote

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it here's what it all comes down to

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annuities are math and when you do a

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transfer and by the way let's talk about

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transfers for a second if you have the

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annuity variable or index do with the

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income writer inside of an IRA it's an

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IRA to IRA Transfer it's a non-t taxable

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event if it's in a non IRA account it

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falls under IRS Section 1035 look it up

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if you're so bored and that says you can

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transfer from one annuity to another

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non- taxable event so in any case of

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transferring annuity to annuity it's a

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non taxable event but it's bigger than

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that the annuity industry does not want

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agents and advisors out there what they

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call flipping and churning and twisting

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accounts meaning they're transferring it

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to create a commission for the agent or

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adviser the annuity industry whatever

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you think about it whatever you think

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about the annuity industry they really

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do care about the consumer and they're

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trying to thwart love that love that

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word which means stop in southern stop

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all that nonsense so what do they do you

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say wait a minute see that sounds good

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in principle but what the heck what kind

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of policies or what kind of what kind of

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best practices are they putting in place

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well here's what they do when you

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transfer from one annuity to another

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doesn't matter if it's Ira Roth IRA um

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non

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Ira the

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application has a side by-side

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comparison of the annuity that you're

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coming

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from going into the annuity that you're

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going to and the annuity that you're

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going to has to provide wait for it a

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higher

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contractual guarantee not a hypothetical

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not a theoretical not unicorns changeed

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butterflies a contractual a higher

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contractual guarantee

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when you move from the old annuity to

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the new annuity so in this case with

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John he had to

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show to the annuity receiving annuity

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company that Not only was the income

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Rider amount not high not higher than

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the single premium immediate annuity

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amount using the accumulation value but

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also the single premium immediate

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annuity quote from the old carrier

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wasn't as high as the spia quote quote

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voting all carriers he had to prove both

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of those okay say wait a minute that's

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that's a lot it is a lot and it should

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be a lot there should be huge Hoops to

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to jump through before you make a

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decision to move from one annuity to

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another knowing that the income writer

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value is not transferable knowing that

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the accumulation value if there are

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surrender charges you got to factor that

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in and there's no games to be played and

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if there's games played by the agent or

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adviser filling out the application

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that's a whole whole another problem

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that the agent advisor is going to have

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to deal with and ain't fun ain't fun

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it's uh lose your license see you later

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and it should be it's like filling out a

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mortgage application

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fictitiously I mean there's no way to

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juice the numbers on a side by side

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contractual guaranteed

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comparison so what okay Stan that's

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fantastic I get it so what now if you

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have an income writer if you've

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purchased a variable annuity with an

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income writer and or an index annuity

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with an income writer then I would

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encourage you to go to my site at the

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annuity man.com and schedule call it

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says book a call in a big I think it's a

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yellow box I'm kind of color blond

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yellow box and you'll either get me or

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one of my smarter people on the phone

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and we can do that side by-side

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comparison spoiler

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alert most and I say the majority of the

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time I would say over 70% of the time

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with income

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writers you're not going to be able to

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Beat It by transferring the accumulation

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value the walkway amount the real money

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amount to an immediate annuity quoting

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all carries you're just not but you know

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what isn't it worth the exercise isn't

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it worth you looking at your income

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riter that you've had in place you've

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been paying fees on it every year and

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you're going to pay fees on it for as

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long as you're breathing just to make

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sure that you have the highest

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contractual guarantee makes sense to me

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it's like having an income warranty

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right and we are providing it at the

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annuity man.com for free and under no

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obligation all we're going to do is run

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the comparison and tell you hey you stay

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there stay 70% of the time we're GNA say

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hey that's good I'm glad we did this now

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you know stay there turn on the income

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riter when you need income period but

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you might have the situation that John

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Lind ran into one of his value clients

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that says hey this income riter is not

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compe itive when it was written and we

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can do better with a lifetime income

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guarantee with a single premium

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immediate annuity now if that's the case

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that's a pretty good deal because what

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are you doing good question if you

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transfer from the variable and index

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index annuity to the income riter to an

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immediate annuity after we have proven

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that the contractual guarantees are

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higher with that single premium

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immediate annuity now you've stripped

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out all those fees I'm not saying the

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fees are bad for income writers because

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it it doesn't affect the lifetime income

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stream but you are paying a fee for the

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life of the policy for that income

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writer attached to variable or index

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annuities if we can mathematically and

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contractually show that you're going to

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get a better and higher payout Apples to

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Apples move into an immediate annuity

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you've also stripped out all fees all

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fees now income Riders typically 99% of

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the time are are what I call life with

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cash refund meaning that when you pass

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away whatever's left in the accumulation

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value will um will go to your list of

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beneficiaries the evil life insurance

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and annuity company won't keep a penny

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even though they're contractually on the

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hook to pay as long as you're breathing

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what we typically do in an apple stles

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comparison is run the single premium

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immediate annuity life with cash refund

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or joint life with cash refund to mirror

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m i r r o r mirror the income writer

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that were that we're comparing it to

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okay I know I threw a lot at you that

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was a fire hose of annuity man

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information but very valuable to all of

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those income writers that were sold out

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there and a lot of you are not sure what

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they are not sure what you bought not

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sure if it's good why am I paying this

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fee etc etc etc what we want to do at

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the annuity man is clarify that so that

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you don't have to think about that

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anymore and and like I said 70% of the

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time we're say you're good stay stay

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there you're good you can't beat it on

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the street as they say the annuity

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Street stay where you are and turn on

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the income wrer when you need income but

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there there are going to be those

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situations like John Lind ran into that

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we can actually beat the income Rider

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using the accumulation value in a spia

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single premium immediate annuity quoting

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all carriers how about that little

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nugget of wisdom

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unbelievable from Stand the an new man

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and that is shooting it straight with

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Stan I'm Stan the annity Man America's

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annuity agent I'll see you next time