What Is The Best Type Of Annuity For Retirement Income?

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What is the best type of annuity for retirement income?

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Hi there, my name is Stan The Annuity Man, America's annuity agent, licensed in all 50

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states. I know what you're saying. Why the "I Heart Annuity Haters" shirt? It's because

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I have fun wearing this through the airports because every single one of you with a Social

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Security number already owns the best inflation and lifetime income annuity on the planet. It's

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called Social Security. So, I love, "I hate all annuities."

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Really? You hate Social Security? You hate a pension, if you're getting?

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But this is a loaded question. You know, what's the best annuity for

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retirement income? That type of question, that category,

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it's a little loaded. But I'm going to make it very, very simple for you to understand how to

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choose the right type that's going to provide the highest contractual guarantee after this.

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So, what's the best annuity type for retirement income?

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There's four different types, and they have different areas where they're going to work

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for you or not work for you. You know, if you're one of those people that has a quadrillion dollars

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and can just live off the interest and never touch the principal, then you don't need a

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lifetime income annuity. But there's four types.

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The granddaddy of them all: single premium immediate annuities, acronym SPIA.

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Deferred income annuities, acronym DIA, which is nothing more than

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an immediate annuity that you defer. Qualified longevity annuity contracts

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that are used inside of your traditional IRA. Yes, you can have annuities inside

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of IRAs. "Never buy an annuity inside of an IRA." I mean, if advisors tell you that,

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they're not your advisor. Okay? And then the fourth way is income riders

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that are typically attached to variable or index annuities. I don't recommend variable annuities

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because of the high fees, but the index annuity is a very efficient and cost-effective delivery

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system for that lifetime income stream. So, which one's the best?

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I always get that call: "What's your best one, Stan? Don't BS me. Just give me the best one."

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Well, if I had the best one, that's all we'd talk about.

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But annuities are commodity products, okay? We quote all carriers for the highest contractual

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guarantee for your specific situation and dates of birth, life expectancies, etc.

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So, there's not just one. And if anyone just shows you just one,

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then they're not acting as a fiduciary. They're not acting in your best interest.

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A fiduciary to me isn't having a plaque on the wall that says, "I'm a good guy or a good gal."

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In the financial business, we should all be putting your interest ahead of

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ours. That's the business. That's how you stay in business for 30 years. You put you ahead of me.

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So, the two questions I always ask every single person— every single person that's

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been a client, quadrillion clients, multiple billions under management:

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What do you want the money to contractually do? When do you want those contractual

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guarantees to start? So, let's go under the premise,

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or the question is income. What do you want the money to

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contractually do? Lifetime income. That could mean single life or joint life with a spouse.

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But the key question is: when do you want that contractual lifetime income to start?

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That's going to determine the type of one of those four annuities, transfer-risk lifetime

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income strategies, that we're going to choose. If you said, "I need it to start immediately,

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within 6 months, within 1 year," 99% of the time, that's going to be a single

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premium immediate annuity— a transfer-risk pension, no moving parts, no annual fees,

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no market attachments, A+ or better. All lifetime income we're doing is A+

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or better. No exceptions. None. Okay? A+ or better because things are going to change

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in the annuity industry. And for lifetime income, you want to make sure it's that high of a rating.

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And we even do more. We go underneath the hood, look at their financials. We even judge them on

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how they do administrative paperwork, etc. Alright, so let's just say the second part

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of that: "I want lifetime income." And the second question: "I need it to start two years from now,

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three years from now, five years from now." Now we're looking at DIAs, income riders,

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deferred income annuities, income riders, and if it's IRA money,

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potentially qualified longevity annuity contracts. Q stands for qualified. Q stands for IRA.

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And by the way, the IRS and the Department of the

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Treasury put QLACs on the planet in 2014 to create lifetime income streams from your IRA.

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But if you said— and you can use lifetime income products in all types. I'm

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going to say it again: all types of structures you can use lifetime income products. Roth IRA,

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traditional IRA, non-IRA, checking account-type money, okay? The difference is just how it's

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taxed, how that income is taxed coming out. But if you said, let's just say you had non-IRA

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money, non-qualified money, checking account-type money, and you want income to start in five years

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for you and your spouse, we're going to quote deferred income annuities and income riders.

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They're both going to provide contractual guarantees. They're both going to pay as long

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as you're breathing. If it's joint life, as long as one of you is breathing or on a respirator.

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And then we're going to structure both so that 100% of any unused money, if you die early,

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goes to the family, not the annuity company. Do not think that if you die, money goes poof.

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99.9% of the lifetime income that we put together for our clients has a backstop in

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there so that if something happens to you, 100% of any unused money goes to the beneficiaries.

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So, please stop with that, "Well, the annuity company keeps the money." That's life only.

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And if you call me— and you can get an appointment with me if you want— [email protected] is my email—

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and you say, "I hate my kids. I hate my beneficiaries and I don't have any

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charities." Okay, we'll do life only. But 99% of the people don't do that.

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They've worked hard for that money— not going to sing the song— they worked hard for the money,

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and they want to make sure that it's going to go to the beneficiaries.

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But it's really that simple. So, one year and in: immediate annuities.

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More than one year: deferred income annuities, QLACs, income riders.

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Now, you can go to my site at theannuityman.com and run those scenarios yourself. That is a

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live feed quoting all carriers for the highest contractual guarantee.

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Just remember: A+ or better. We're marrying— M-A-R-R-Y— marrying the

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lifetime income company, the annuity company that's issuing that lifetime

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income guarantee. It has to be A+ or better. No exceptions.

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I don't care what Johnny Appleseed agent's showing you or telling you. A+ or better.

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Now, with MYGAs, which are fixed-rate annuities, not lifetime income annuities,

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we might do a little bit less rating because we're dating that carrier. But for lifetime income,

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it's A+ or better. Period. Not up for debate. We're not negotiating.

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And you'll thank me for that. Because when artificial intelligence changes the underlying

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life expectancy tables against you— because it's going to project you to live longer,

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which means payments will be lower— you'll thank me for locking in those guarantees

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now with current life expectancy tables. And remember, with lifetime income, okay,

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retirement income using annuities, the primary pricing mechanism is your life expectancy, or

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life expectancies if it's joint. It's not the Fed. The reason I have gray hair right now— a lot of

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reasons— but one of the main ones is people will email me and go, "Well,

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I'm just going to wait on the Fed, the next Fed meeting, for the lifetime income product."

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I'm like, you're dumb. That's not smart. That's not being educated. That's not being

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informed. That's the reason I'm out here doing what I do, which is educating you.

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These are lifetime income products based on life expectancies.

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The reason we quote all carriers is quotes change like a gallon of milk

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every 7 to 10 days, okay? Every 7 to 10 days, and we can lock that quote in for you. If you

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want to move forward, or if you want to lock it in and make a decision over

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a specific time period, we can do that for you. But annuity companies, life insurance companies,

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issue annuities for lifetime income, they're trying to fill age tranches. Maybe your age

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is a tranche they need to fill. Think of a football stadium,

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upper and lower bowl. Let's just say the quote of your favorite annuity company that you like,

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I guess, or you know the name of, their quote's low. Why is it low? They filled the tranche. Upper

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and lower bowl is full of you. If the quote's aggressive,

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they got to fill the stadium. They got to fill that life expectancy tranche.

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It's that simple. Interest rates play

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a very minor role in the pricing. Interest rates play a very minor role in the pricing.

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So, what's the best annuity for retirement income, lifetime income, transfer-risk

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income? It depends on what you're specifically trying to achieve and the two questions:

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What do you want your money to contractually do? And when do you want those contractual

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guarantees to start? That second question is

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going to determine the type of lifetime income annuity that fits you best, meaning provides the

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highest contractual guarantee. Alright? It's that simple.

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And if somebody out there is just showing one product and they don't have immediate annuities

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and deferred income annuities and QLACs— they only have income riders— then they're not legitimate.

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They're not a legitimate source for annuities. All they're doing is gunslinging one product

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and one-size-fits-all, and eventually they'll be out of business. They might go on a trip

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because they're going to sell enough of it. But if they're not showing all four products and not

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explaining all four products and representing carriers, the big carriers from all four

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product types, then they're not legitimate. We are. We're licensed in all 50 states,

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Puerto Rico. We represent pretty much every carrier out there on the planet.

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And, you know, there might be one or two that are captive, and we're trying to get those contracts,

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too, because if they went through us, we'd sell more than their captive agents.

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Alright? Do me a favor. Go to my site and run quotes yourself: theannuityman.com.

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I've also written owner's manuals on all four of these lifetime income products.

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QLACs, SPIAs, DIAs, Income Riders. Written owner's manuals, you can get them for free.

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But do me one last favor. Up above my head is a spinning clock, but there's a video that's going

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to pop up I want you to watch. It's about lifetime income, but it's about how artificial intelligence

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is going to change the game here pretty soon and that lifetime income right now is a bargain.

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But I'm going to explain that in detail. So, go take a look at that, and I'll see you next time.