Are annuities a good investment for retirement?
With $250 billion in sales each year, and $2.5 trillion in retirement annuity assets under contract, annuities comprise a huge slice of US retirement assets.
Understanding annuities – whether annuities are right for you, and how annuities fit into your retirement strategy – can get complicated given all the annuity options out there and the extreme uncertainty in today’s markets.
So this week, I sat down with Stan Haithcock, aka “Stan The Annuity Man,” to deep dive on annuities. We chat about how annuities work, why annuities are not investments (in the portfolio sense), and why there is no such thing as “best annuities.”
- What annuities are and what purpose they serve
- The different types of annuity options (immediate annuity, deferred annuity, fixed annuity, variable annuity, indexed annuity, multi-year guaranteed annuity, life annuity)
- How annuities account for inflation
- The mechanics of how to buy an annuity
- How insurance companies that sell annuities make money
- The different type of annuity fees you can expect, and typical all-in costs for different annuity types
- How to vet the insurance companies that sell annuities
- How to vet an agent and questions to ask before buying an annuity from them
- How agents who sell annuities are compensated
- Annuity taxes and the tax profile of annuities
- Basic protections your annuity gets if the insurance company you bought it from goes bankrupt
- Who annuities are best suited for, and whether annuities are a good idea for early retirees (FIRE)
Have you purchased any annuities before, either for yourself or a family member? What kind of annuity did you buy, and why? Let me know by leaving a comment.
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- The Annuity Man
- National Organization of Life & Health Insurance Guaranty Associations
- Social Security: How it works and optimal claiming strategies (HYW050)
- How Medicare works: eligibility, enrollment, cost, and coverage options, with Danielle Roberts (HYW048)
- How Social Security Works: The Ultimate Guide For Laypersons
- Life insurance: How to calculate exactly how much you need in 4 simple steps
- Retirement withdrawal calculator: How long will your savings last in retirement?
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Read this episode as a post:
Andrew Chen 01:22
My guest today is Stan Haithcock.
Stan is an independent annuity agent licensed in all 50 states representing all the insurance carriers that sell annuities.
He’s known in the industry as “Stan The Annuity Man” and he maintains an educational website with blog posts, videos, and a podcast on annuities. He has published 7 books on annuities.
Disclaimer upfront: Stan’s agency only recommends contractually guaranteed fixed annuities. He does not sell variable annuities or life insurance.
Stan, thanks so much for joining us today to share insights and knowledge all about annuities!
Stan Haithcock 01:52
It is great to be here, and I hope to help dispel some of the myths and get the truth and the facts out there on a topic that has earned this bad reputation. When you hear the guy on the TV saying, “I hate all annuities,” that’s really funny because Social Security is an annuity. But the industry has earned its bad reputation a lot of times on the sales practices.
So, today’s talk and conversation will be great because I can dispel a lot of that and give your listeners and viewers the information that they need.
Andrew Chen 02:26
I’d love to start just by learning a little bit about your background. How did you get into becoming an expert on annuities? How did you become “The Annuity Man”?
Stan Haithcock 02:34
No one wakes up in the morning and says, “You know what, I want to be in the annuity industry.” Annuity is the curse word of the financial business.
I started my career with Dean Witter, which was then purchased by Morgan Stanley. Then I went to Paine Webber, which was then purchased by Union Bank of Switzerland, known as UBS.
So I was a retail investment adviser for a long time, and then just decided that that wasn’t where I wanted to be for a lot of reasons: just the fact that there was not a lot of autonomy left, in my opinion, of how to build your book of business and what you wanted to focus on from an investment standpoint.
So I just took some time off and was driving around in the car. I’m primarily based in the Jacksonville, Florida area, Ponte Vedra Beach, which is north of St. Augustine, south of Jacksonville in the East Coast. And I heard one of these Saturday morning radio shows about indexed annuities.
I knew what they were saying on it was incorrect, and it was fraudulent, and they were misleading people, and it was just all hype. And so I called in, and I just completely destroyed the people factually.
Because I was pretty familiar with the annuity space, having worked with UBS. They were a leader in the Swiss annuity space a long time ago. And what I was hearing was just garbage.
So, from that, people recognized my name locally, started calling me, and saying, “Hey, Stan, can you look at our annuity?” And from that, it just became “Stan The Annuity Man.” So it wasn’t planned.
And then, from there, once I got in the space, I figured out that no one was really focusing on the contractual guarantees of the policy, which I thought was hilarious because these are contracts. You should never buy an annuity for what it might do. You should buy it for what it will do.
And the “will do” or the contractual guarantees of the policy, that’s the reason I focus primarily on the fixed annuity space. And there’s many different types of fixed annuities out there, but every single one of my recommendations and clients, when they purchase, they’re buying the contractual guarantees of the policy.
Andrew Chen 04:32
All right, that’s good background. Thanks for helping us get that context situated.
To kick things off, what is an annuity? And for folks new to the concept, what is the purpose of buying an annuity? Why would I want to buy one?
Stan Haithcock 04:46
Let’s go backwards a little bit. Annuities were actually introduced in the Roman times as a pension payment for the dutiful Roman soldiers and their family. If you’ve taken any type of Latin, annua is either payment or annual payment, and that’s where the root word comes from: annuities.
And annuities have been sold in the United States for hundreds of years, and their primary purpose is for lifetime income. It is a private personal pension plan.
That’s the reason I joke when you hear the ads that say, “I hate all annuities.” Social Security is the best inflation annuity on the planet.
But if you said, “What separates annuities as a class, as a category, from all other products?” it’s the fact that they offer lifetime income.
Now, with that being said, there’s products out there that are for principal protection. There’s products out there that’s for long-term care. There’s products out there that’s for legacy.
But I’ve come up with the acronym PILL, which I did backwards there. P stands for principal protection, I stands for income for life, L stands for legacy, and the other L stands for long-term care. If you don’t need to solve for one or more of those items in that PILL acronym, you do not need an annuity.
Annuities, for my clients, they’re using them primarily for principal protection or lifetime income, because we live in a world where most companies don’t provide pensions anymore. They provide 401(k)’s, defined contribution plans. And at the end of your working time, you’re going to have to convert that into a lifetime income stream of some sort, and that’s where annuities can fit.
Andrew Chen 06:19
That’s really helpful. I do want to get into the different types of annuities. But before I even do that, as if you were explaining to a four-year-old, how does an annuity actually work, the mechanics?
Stan Haithcock 06:30
It depends on the type. If you said, “Stan, explain to me the lifetime income types of annuities,” there’s four different ones: single premium immediate annuities, deferred income annuities, qualified longevity annuity contracts, and income riders.
I’m looking at the four-year-old and saying, “Here’s how it works. The older you are, the higher the payment.”
The payments are primarily based on your life expectancy at the time you take the payments. Interest rates play a secondary role. If you set it up joint with a spouse or partner, it is on both lives.
So, as long as you’re breathing, the annuity company is on the hook to pay, which is tough for people to get their arms around because the first question people ask me is “What’s the ROI on that, Stan?”
And I go, “I don’t know. Until you die. Up until then, it’s a transfer risk.”
That’s the lifetime income. If you look at the principal protection annuities out there, like indexed annuities or multiyear guarantee annuities, those are CD type products. And the way it works, you give the annuity company money, they protect the principal, and they provide an interest rate from that.
I think one of the misconceptions out there is people think, “I’m not going to buy an annuity because if I buy the annuity and I die, the insurance company keeps the money.” That’s not true. That’s one way of 40 ways to structure an income annuity.
And then the other misconception is people think that it’s all about income. No, you can buy annuities that protect the principal.
Andrew Chen 07:49
When it comes to annuities, you’ve already referenced some of them, but I hear terms like immediate versus deferred, fixed versus variable versus indexed, certain period versus lifetime. For folks who are new to annuities, could you help shed light on what are the main differences in types of annuities, how do each of the types work, and what are the main pros and cons consumers should be aware of for each one?
Stan Haithcock 08:10
Let’s just talk about the cons first. Let’s get that out of the way because I always like to lead with what’s the downside. The downside with annuities, regardless of the type, is you’re giving up opportunity.
You’re buying a contract. You’re transferring risk because that’s what annuities are: they’re risk transfer products. You’re transferring the risk to either solve for lifetime income, principal protection, legacy, or long-term care.
I always tell people, with income, you either need income now or income later. You need either to start right now or at a future date. From that specific answer that you would give me, then that determines the product that we would then quote.
And from a principal protection standpoint, just looking at interest rates, a multiyear guarantee annuity is the annuity industry’s version of a CD. And I have a live feed on my site. You’re just choosing that for the highest interest rate.
I think it’s very important to make annuities simple because they are simple. They’re contracts.
And if people would just lean in on that PILL acronym that I give them, and not go into the weeds and go down the rabbit hole of “How does a variable annuity work?” or “How does an indexed annuity work?” but instead, say, “This is what they solve for. Do I need to solve for that?”
I can follow up on that. If you want to dig in with other questions based on specific products, I can do that. But once again, there’s many types of products, six or seven primary types, depending on how you’re looking at it.
Andrew Chen 09:40
Since you use this PILL acronym, maybe that’s the better frame. What would be the type of product that you would want to consider for each of the acronym letters?
Stan Haithcock 09:52
Principal protection comes down to two products. It’s a multiyear guarantee annuity, which is a fixed rate annuity, and what’s called a fixed indexed annuity, which has a call option attached for potential gains. But both of those are CD type products.
The I is income for life. That comes down really to four products: single premium immediate annuities, deferred income annuities, qualified longevity annuity contracts, and what’s called income riders that can be attached to variable or indexed products.
The L is for legacy. You can buy riders, attachments to policies. That can be a death benefit if you do not qualify for life insurance
And life insurance is the best death benefit strategy out there, but a lot of people can’t qualify for that. And annuities have guaranteed issue products that you can attach a rider for that legacy.
And then the other L is long-term care. There are annuities out there that provide the guarantee of the principal, but it also provides long-term care coverage. If you don’t need to use the long-term care coverage, you still have full control over the asset.
I think it’s very important for your listeners and the demographics that you’re reaching. And we discussed that on a recent call. We got to know each other.
You should never, ever buy an annuity of any type for market growth. If anyone is ever pitching you an annuity and saying, “You really should buy this for market growth,” they don’t know what they’re talking about, and they historically don’t know the facts about annuities.
Now, the only argument against that is a variable annuity, which I do not sell because I don’t sell anything that has the potential to go down. But in essence, a variable annuity is a life insurance policy, because life insurance companies issue annuities. It’s a wrapper around mutual funds.
My opinion on that: Just go buy the mutual funds. I think you’d be better off, and you have more choices, because all variable annuities have limitations on the mutual funds that you can choose.
Variable annuities were put on the planet in the 1950s for tax-deferred growth. And there’s an argument, say, for a no-load variable annuity, but even then, a no-load variable annuity limits your choices.
I think if you’re looking for pure market growth, you should not limit your choices. That’s the reason I say don’t buy an annuity for market growth.
Andrew Chen 12:06
You mentioned the four PILL acronym letters: principal protection, income, legacy, and long-term care. If you wanted to solve for two or more, should you buy two or more annuities, or is there a single product that can fit any combination of those?
Stan Haithcock 12:23
Even if you go to the bad chicken or expensive steak dinner seminar that the agent is going to invite you to, they’re going to tell you they have the product that fits all of that. They do not.
If you’re going to solve for it, you need to buy a specific annuity to solve for that specific goal. There is not a “one size fits all.”
I think it’s very important to point out to your listeners and viewers that annuities are commodity products. There’s not one that’s better than the other. You should shop them all like you shop a plane ticket.
That’s what we’ve done at my site theannuityman.com. You can run your own quotes, look at the best live feeds. No one is going to call you.
You can shop, because I say annuity quotes change like a gallon of milk. Every 7-10 days, they expire, and you have to re-quote it unless you lock it in, and go through the application process.
Andrew Chen 13:09
Is it fair to say that in terms of sales volume, in terms of the popularity of the product, if there’s a concept of a plain vanilla annuity, that that would be a fixed annuity? Is that fair to say?
Stan Haithcock 13:22
Not really because there’s six different types of fixed annuities. If you said, “What’s the plain vanilla version of an annuity for lifetime income?” that would be a single premium immediate annuity.
What’s the plain vanilla version of an annuity for principal protection? That would be a multiyear guarantee annuity.
So, I always ask people two questions: What do you want the money to contractually do? And when do you want those contractual guarantees to happen and to start?
From those two answers, then I can pinpoint: (1) if you even need an annuity (and I’ll tell you if you don’t), and (2) if you do need an annuity based upon those answers, then we know what type to go quote that’s going to provide the highest contractual guarantee.
Andrew Chen 14:04
Maybe I’ll ask a different way. What are the most common annuities that are sold?
Stan Haithcock 14:08
Unfortunately, it’s the highest commission ones. And we’re going to get to how commissions are paid, etc. But currently, the leading sales products are the variable annuity and indexed annuity.
In my opinion, and I do call myself America’s annuity agent because I do think I’m the thought leader out here, it’s solely for the purpose of that’s really the highest commission products out there. I think the most pro-consumer products are the ones that are low commission, that are easy to understand.
I always say, if you can’t explain the annuity to a nine-year-old, you shouldn’t buy it (no offense to nine-year-olds). It really should be that simple. The more complex, the longer the surrender charge of the product, the higher the commission.
Unfortunately, I think the annuity industry is making a mistake. They could solve this problem if they would just have a single level, low commission that’s built in for all product types. And I think it would force the agents and advisers to recommend a product that is suitable and appropriate for that specific situation.
Andrew Chen 15:09
When it comes to fixed annuities, is the payout rate based on the original lump sum contract premium out, with no inflation adjustment over the years? If I buy $100,000 fixed annuity, is my annual payout rate always going to be based on nominal $100,000, or does that $100,000 get inflation adjusted over time?
Stan Haithcock 15:27
Let’s break it down into two types. Let’s say you’re buying it just for principal protection. You’re going to get a guaranteed interest rate, just like you would on a bond coupon or a CD coupon.
But I think what you’re asking about is you put $100,000 in and you buy an annuity for lifetime income, what is that primarily based on? The pricing mechanism is primarily based on your life expectancy, or life expectancies, at the time you take the payment. Interest rates play a secondary role.
You’re transferring risk to solve for longevity. There’s mortality credits involved in there, which means that they’re taking everyone at your age group. They’re pricing where your life expectancy is going to be.
Some people are going to live longer. Some people are going to live shorter. That’s always how annuity companies have the big buildings for a reason: because they know when you’re going to die.
But the bigger question that you ask that I think is very important is about inflation. Inflation is the gorilla in the room. Is there an annuity product that really is good about addressing inflation?
The sales pitch people will say yes. The factual annuity man will say no.
When you buy a lifetime income stream product, whether it’s a single premium immediate annuity or deferred income annuity, you can attach what’s called a COLA (cost of living adjustment). You can choose that percentage increase that will increase your payments for the life of the policy.
Sounds fantastic. Let me put on the brakes here and tell you about the facts.
Once you do that, the annuity company is going to lower the initial payment by 30-40% to make up for that increase. So, if you’re buying an immediate annuity, I would encourage you to quote with and without a COLA to see how much that’s going to cost you to add that increase in.
In the past, you could attach what’s called a CPIU (consumer price index for urban consumers) increase, but those no longer exist. I think they’ll come back if interest rates come back. But right now, you can attach a COLA, cost of living increase, to the income stream.
But annuity companies have the big buildings for a reason. They do not give anything away, and they know when we’re going to die. So, it sounds good in theory, but mathematically, I don’t think you’ll like it.
Andrew Chen 17:36
It sounds like the default then is no inflation adjustment. You’d have to add that as an option. It’s going to lower your initial payments, but the default is no inflation.
That’s a major risk, right? Because it means, over your lifetime, especially toward the later years of your life, it’s meant for lifetime income, but it’s just going to erode your purchasing power.
So, if the purpose is to give you lifetime security, it seems like without a COLA adjustment, you diminish that security. Is that fair to say?
Stan Haithcock 18:03
Yes and no. Number one, when you get to the finish line, whatever the finish line is, chapter two of your life, when you are going to retire or do something different, you’re going to put an income floor in place. That income floor is going to include dividend stocks, bonds, Social Security down the road, and an annuity type structure that provides a lifetime income stream.
And let’s just say you don’t choose a COLA and you have one that’s just a static payment. The way to solve for inflation with annuities is to reverse engineer the quote for inflation when it hits.
The thing about inflation that I giggle about a little bit is it’s all personal. Inflation to me is different from inflation to you because you and Kelly have a three-and-a-half-year-old. You have a different inflation of buying diapers and buying baby food than I do with two daughters that are 24 and 22 because they’re out of the home.
But what I tell my clients: there’s two ways to use annuities to address inflation. Number one, you can buy annuities to start at a future date.
We do have laddering strategies that, let’s just say you’re 55 years old, you can have income starting at 60, 65, 70, 75, and 80, which will combat inflation, or you can buy annuities at the time you need to fill in that income gap floor.
I’ll give you an example. The income floor, let’s just say, is $3000 a month for you that you need to hit, and it needs to hit your bank account every month to live the lifestyle that you deserve. And let’s just say inflation hits, and you now need $3400 a month.
I would encourage people to then reverse engineer to solve for that $400 that you need for your specific income floor. And that’s where an immediate annuity comes in. And you can run that reverse engineer quote on my site.
But there’s no perfect answer to inflation with annuities, just a bunch of bad sales pitches.
Andrew Chen 19:49
So, in your $3000 versus $400 example, does that mean that you would want to basically buy another annuity at a later point in time to true up? Is that suggesting a laddering strategy? If you’re really worried about inflation, just do a laddering strategy that you just keep building ladders several years in advance or something like that?
Stan Haithcock 20:08
Yes, you can do that. But I would encourage your listeners or viewers, because they’re high IQ people, to what I call deferred SPIA.
Deferred SPIA means hold off until you need that lifetime income guarantee. At that point in time, you buy an immediate annuity.
In other words, keep your money in the market. Keep your money in growth vehicles that are not annuities, because annuities aren’t growth vehicles and strategies. And then, at the time you need income, you buy the immediate annuity at that time, transfer the risk, and put in that personal pension, which is, in essence, what a single premium immediate annuity is at that time.
If you’re one of those box checkers and planners, and you want to make sure that “I’m 55 (in the example I gave). It’s starting at 60, 65, 70, 75,” then yes, you could buy them all right now and know to the penny what that income stream is going to be at that future date.
Once again, remember, the income stream is primarily based on your life expectancy at the time you take the payment. If you’re buying annuities and deferring the income start date, the annuity companies do reward you for allowing them to hold on to the money. They do enhance that payment.
I always say, “The more you let it cook, the more you get.”
But remember, you’re transferring the risk. These are commodity products. You’ve got to shop all carriers for the highest contractual guarantee.
And fixed annuities are issued and approved at the state level, so every state is going to have different offerings than the other state. If you’re in Texas, you’re going to have a different quote. And that’s the reason we quote all carriers, just to make sure we’re covering every state in all of the companies that are available there.
Andrew Chen 21:39
I have so many questions. Why do different states have different pricing? Is that because of different longevity risk calculations?
Stan Haithcock 21:45
No, it’s because fixed annuities are regulated at the state level. Variable annuities are regulated by FINRA and the SEC.
It’s a Series 7 issue. Series 7 is the licensure that you’d have to get, just like a stockbroker. I used to call them stockbroker back when I was doing that.
But all those fixed annuity types that I mentioned are regulated at the state level. Each state has Department of Financial Services or Insurance Services that regulates those insurance products within that state. For example, the offerings in Florida and Texas might be different than the offerings in New York, Oregon, New Jersey.
Andrew Chen 22:24
Can I arbitrage that? If I’m in Florida, can I buy a Texas annuity, if that’s more attractive, I get better bank from that?
Stan Haithcock 22:28
No, you can’t. You have to buy the annuity in your state of residence, and it has to be signed in that state. Very heavily regulated.
Annuity companies aren’t smarter than banks. They’re just more regulated. That’s the reason we haven’t seen any, if at all, problems with the annuity industry.
Now, could that change? Yes, but they’re not allowed to do stupid things with your money because they’re handcuffed by the regulatory agencies at the state level to not do crazy things with your money. That’s the reason fixed annuities have been traditionally safe money for people.
Andrew Chen 23:08
What if you move? You buy annuity and then you move?
Stan Haithcock 23:12
Let’s just say you move from Florida to Texas. Then the Texas rules apply.
And each state has what’s called a state guarantee fund. Everyone out there is familiar with FDIC coverage from banks, or SIPC coverage with brokerage firms. With annuities, it’s at the state level.
Each state has a state guarantee fund, and they back up annuities and life insurance. Remember, life insurance companies issue annuities. They back up those policies to a certain dollar amount, and every state is different.
Andrew Chen 23:44
But when I move, I don’t pay anything extra. I still get the benefit of my old state. With the contract that I signed in my old state, that’s still what applies in my new state, is that right?
Stan Haithcock 23:51
That is absolutely correct.
Andrew Chen 23:54
You mentioned that in the deferred case, because you can reverse engineer, first of all, I wanted to understand: when you say you can reverse engineer what you want, the way I interpret that is “I think I need $4000 a month to live. In order to generate that payment each month, how much do I need to put in?”
And then I get quotes for that. Is that basically what you mean?
Stan Haithcock 24:13
That’s exactly what it is. If you go to my site, you can choose either/or.
You can say, “I have $400,000. What will that create?”
Or “I need $4000 a month. How much will it take?”
Then we quote all carriers. And then the reverse engineered example, then we’re going to list the companies that’s going to require the least amount of money to guarantee that amount that you want.
Andrew Chen 24:33
So, if you were trying to build a ladder, then you could just project out, “I think I’m going to be in retirement in 30 years. In year one, I’m going to need $4000.”
“But if I just grow that at my assumed inflation rate, then each year, how much would I need to have?” And then you can stagger your purchases accordingly, is that right?
Stan Haithcock 24:53
That’s correct. That’s a great example.
Andrew Chen 24:57
So, in the deferred case, you mentioned that insurance companies will reward you for deferring payment. How does the reward mechanism work? Is it in the form of a higher payout rate, or is it in the form of your principal getting to grow with the market, and then the payout rate applies at the end?
Stan Haithcock 25:12
Depending on what type of annuity, both examples you gave apply. For example, if you buy an indexed annuity, or in essence, a variable annuity, I don’t sell those, but with an income rider, then you’re going to have the accumulation value grow, and also that income rider benefit grow as well.
With policies like qualified longevity annuity contracts or deferred income annuities that don’t have any moving parts or market attachments inside of them, they’re going to enhance the payment by just enhancing the payout and enhancing the income dollar figure, the longer you allow them to hold on to the money.
Andrew Chen 25:48
I’d love to shift and talk a little bit about how insurance companies that sell annuities actually make money on the annuity products. What is the main way annuities are monetized by insurance companies?
Stan Haithcock 26:01
Let’s cover it a couple of ways. When you buy a fixed annuity, the annuity company, by law, has to have 100% of your money on hand in investment grade bonds on day one.
Whereas, with a bank, I think they have to have 6% of your money. They can go loan out the other 94% and do what they want to do.
But annuity companies are not trying to hit homeruns with your money. They are trying to make 1-2% on it.
They can do that with a lot of corporate paper that the individuals can’t buy, whether it’s 7-day paper, 30-day paper, or whatever. And when you’ve been in the business, I have two of those levels that you can buy that.
Also understand that life insurance companies issue annuities. They’re selling life insurance, they’re selling annuity types, they have bond portfolio from decades back. Most of these companies are very old.
So it’s a dynamic pricing model. And when you’re buying a lifetime income stream product, they’re keeping all of your money, they’re doling it back to you over your projected life expectancy, and they’re adding an interest rate portion to that.
But remember, with lifetime income and annuities, and this is reality that people need to understand: when you get a lifetime income stream annuity, which is the four types, they’re giving your money back with interest. So, really the true value proposition is when your account is at zero, the annuity company is still on hook to pay.
That’s the reason I always say there’s no ROI until you die. It’s a transfer of risk. As long as you’re breathing, they’re on the hook to pay. And you have to find value in that.
I think one of the biggest hurdles for people with annuities, and I hope this podcast educates people: there’s not just one annuity. You can’t say you hate all annuities. That’s like saying you hate all restaurants.
There’s many different types. You have to drill down and see: does that make sense? But it’s the loss of opportunity, the fear of missing out, that I think is the negative attached to annuities.
Because regardless of the type, they’re contracts. You’re buying a contract. At the end of the process, you’re going to have a policy hard copy that’s mailed to you, and that’s going to be a contract between you and the annuity company.
The type of annuity that you own or have purchased is based on what you’re trying to solve for, that goal. But most of the time, it’s lifetime income.
Andrew Chen 28:11
I wanted to ask this in a different way. How are fees and expenses typically structured? I know, depending on the annuity type, there can be expense ratios, administrative fees, surrender fees.
I wanted to understand, I would like my listeners to understand, how is the insurance company making money? Because it will give them some insight into what the incentives are.
Stan Haithcock 28:30
I cover how they make money at the 1-2% level. That’s what they’re trying to do with your money.
But let’s talk about a couple of other things, fees, because you can’t carte blanchely talk about fees, because single premium immediate annuities, deferred income annuities, qualified longevity annuity contracts, multiyear guarantee annuities, and indexed annuities don’t have any annual fees.
Variable annuities have annual fees. And that’s where it sticks in their head, and they go, “Wait a minute. Aren’t these all high fees?” No, they’re not.
Now, let’s talk about also the commissions. Every agent that sells an annuity gets paid a commission. It’s built into the policy.
And that’s not playing word games and playing semantics here. The annuity companies pay it from their reserves, just like they pay their light bill and their water bill. So, when you put $100,000 in annuity of any type, and you get your statement, or you go online to view it at the company’s website, you’re going to see $100,000, but understand that the annuity agent did get paid typically a one-time charge.
Once again, with annuity commissions, the simpler the product, the lower the commission. That’s the reason everyone is going and pitching the long-term surrender charge products that are very complex. So, that’s how the agent makes money.
The annuity company makes money because they’re making money while they’re holding on to your money, 1-2%, and they’re doling it back over your life expectancy.
Let’s take the fixed annuity type. Let’s just say a fixed annuity at this point in time, at the time of this taping, some states have a 5-year annual guarantee of 3%. I know this sounds low to people, but look at the 10 Year Treasury and the 30 Year.
So, how do they give more than that? What they’ll do is they’ll look at all of their dynamic pricing models with their life insurance, the annuities they sell, the bonds they have, etc., and they’ll say, “Okay, we think we can make 3.5% off that portfolio, we’re going to guarantee 3% to the consumer, and keep the 50 basis points.”
Does that make sense?
Andrew Chen 30:32
Yeah. So it sounds like they’re making money off a spread. On some annuity products, they’re going to also charge fees.
I understand that agents are paid a commission out of reserve, but it’s baked into the cost. But in practice, that just means that your payout rate will be lower. Because if those commissions were off the table, in theory, at least some of that value would flow back to the consumer.
Stan Haithcock 30:57
Let’s hope. That would be the hope that they would pass that on.
And I think that when I started the annuityman.com, my whole thing was I want to go direct-to-consumer. At the time I started this, there was no direct-to-consumer. 95% of all annuities were sold 30 miles from where the agent lived, and they went to your kitchen table.
I looked at the industry and said, “Wait a minute. This is a commodity product. It should be sold like a commodity product.”
And pioneers take all the arrows. When I first started this, the companies did not like the fact that the paperwork was being signed via FedEx. They were used to face to face.
I think in the future, probably in 5-7 years, you will be able to buy annuities direct from the carrier without someone like me. If the annuity companies could figure out how to do that now, they would, and get rid of all of the distribution. But right now, they haven’t figured that out, and I’m giving you just some inside information.
But that’s what we’re prepared for: for that time when they say, “You can buy it direct. We want to be the conduit for that.”
You pretty much can do that on my site right now. Just by law, at the end of the process, a licensed agent has to get on the phone with you and make sure it’s suitable and appropriate.
But I do think that eventually it will go to a direct-to-consumer model, because I was with Dean Witter a long time ago when the first direct-to-consumer models for buying stocks online hit, and I remember people saying, “That’s never going to work. That’s never going to happen.”
And look at where we are now. I think the same thing is going to happen in the annuity industry. I just think it’s going to take a few more years.
Andrew Chen 32:33
I’ve asked before the same question about life insurance, and I’ve rationalized that the products are so varied, and the consumer doesn’t always even know what they need. And there’s a lot of discovery that happens in a conversation. The consumer may not even know how to answer certain questions on a website.
This is maybe the theory: that you need an agent who can actually be very high touch and ask these questions, and then figure out what’s the most suitable policy, hopefully don’t have too much of a conflict of interest, etc. Do you agree with that?
It sounds like you think the same is not true for annuities because you think that in five years, you’ll be able to buy annuity online, just like you buy on Amazon. Is that right?
Stan Haithcock 33:18
I agree with that premise now, but I’m trying to be the person that provides enough information, so people can make an informed decision on their own terms and their own timeframe. I have a “Stan The Annuity Man” YouTube channel with almost 500 videos that explain the details, good and bad, limitations, benefits of these annuity types, and strategies.
I have a podcast. I send these books out for free to people. I am in the education mode.
Yes, I do sell annuity. Yes, I’m the top agent in the country. But I only sell them when they’re appropriate and suitable.
And most of the time, when people call up, I ask the two questions: “What do you want the money to contractually do?” and “When do you want those contractual guarantees to start?”
And then the PILL acronym, that could easily be formatted into a suitability and appropriateness questionnaire, so that people could buy them without an agent being involved.
I think I’m the pioneer on that, and I hope people will join me. The industry drags their feet on this because they think I’m crazy for this, but it’s eventually going to happen.
And the reason I say that is, at the time of this taping, you have 10,000 baby boomers hitting the age of 65 every single day. 90% of the people don’t work for the government or a company that provides a pension. Most people have to buy a pension.
The fact that the annuity industry isn’t ahead of this demographic tidal wave is hilarious. All they’re doing is making me wealthy because I am ahead of it.
And I’m trying to educate people in “Here’s how they work. Here’s the limitations, the benefits. And here’s why you either should or should not buy one.”
And then provide a commoditized contractual guarantee quote, just like you buy a plane ticket, so people can make a good decision. I just think it makes sense eventually to go to that direct-to-consumer model.
The argument the industry is going to have against me is “What about variable annuity or indexed annuities that are very complex?” My comment to that is: Maybe they shouldn’t be so complex.
Andrew Chen 35:17
I think what I heard you say earlier was that fixed annuities generally do not have explicit fees. They’re baked in (the commission anyway). Variable annuities will have fees.
At least for the variable side, even though I know you don’t sell them, I want to give a sense so folks understand. What is the typical or reasonable all-in cost as a percent of the total contract premium that consumers should expect to pay for the variable? I know there’s multiple types, but maybe a range that consumers should expect to pay for variable annuities.
Stan Haithcock 35:49
Let’s talk about variable annuities. I want the listeners and viewers to understand, we’re just talking about variables.
And you can buy no-load variables. No-load variable annuities have no annual fees, and they’re fully liquid. You can get one at Fidelity.
But the load variable annuities, the ones with commissions, the average annual fee that you should expect to pay for the life of the policy is 2-3%.
Andrew Chen 36:15
You caveat the life of the policy, which has what implication or meaning?
Stan Haithcock 36:20
As long as you own it, and as long as you’re breathing. That’s it.
When people put large amounts of money in variable annuities, and there’s a 3% annual fee, that doesn’t make the variable annuity bad. It’s just reality. You have to look at the benefits that it provides if you’re attaching riders, etc.
But you also have to look at the fee structure because if you’re buying the variable annuity for market growth, which you shouldn’t, but let’s just say you do, and you’re looking at the mutual funds, if the annual fee is 3%, you’re starting every year on the mutual fund side, which they call separate accounts, you’re starting at minus 3.
That complements what I said earlier, which is, you shouldn’t buy an annuity for market growth, in my opinion. Now, the variable annuity people hate it when I say that, but I’ve been on the other side of the coin with Morgan and Paine Webber.
I understand growth. I understand markets. I understand where annuities fit and where they don’t fit in a portfolio.
Andrew Chen 37:23
We’ve touched upon this a little bit: where you think the industry is going. But in terms of mechanics, how does a consumer actually buy an annuity? Do they go to the life insurance company website, which sounds like not the case today, make a purchase online?
Stan Haithcock 37:35
Andrew Chen 37:35
Do they go to a bank, brokerage firm? Do they go to a third party agent, a financial planner, all of the above?
Stan Haithcock 37:41
A bank, brokerage firm, or independent agent like myself. The problem with the banks and the brokerage firms is typically they’re going to have limited offerings. And in a commoditized world, you want to see all carriers for the highest contractual guarantees.
But to go through the paperwork, just for us, for example, it’s an online paperwork, encrypted, safe way to fill out the paperwork. Most annuities are sold face to face, unfortunately, and they’re filling out the paperwork there.
There’s no underwriting. You don’t have to worry about your health or all guaranteed issue products. There are some annuities that can be underwritten, but we can talk about those at a later date.
But 99% of them are guaranteed issue, and you have to go through the specific paperwork, give the financial information just like you open a brokerage account, etc. But right now, it has gone from an industry where independent annuity agents were the primary sellers of annuity, and now it then matriculated into banks, and now it’s going into the brokerage firms.
And they’re really pushing it, which I’m not sure is a good thing. I think if I’m going to a brokerage firm, in my opinion, I want someone to manage my money and look at markets from a broad standpoint. If they’re selling you a package product, my question to them is: Why are you doing that?
Andrew Chen 39:13
We talked a little bit about how agents are compensated with commission. Just so folks know, even though they’re baked in, they may not be paying for it explicitly, they should understand the intensity of incentives.
What are the types of commissions? How much are the types of commissions that agents will make (and a range is fine) for the different types of annuity products?
Stan Haithcock 39:36
It obviously ranges from the type of annuity you structure it, or the company and the specific product. But let’s just go through the types real quick.
Single premium immediate annuities are going to be anywhere from 1-3% baked in. Same for deferred income annuities. Same for qualified longevity annuity contracts.
Multiyear guarantee annuities (that’s the industry’s version of a CD), it’s going to be anywhere from 50 basis points to maybe 2% baked in, depending on the duration. Just remember, the longer the duration for deferred annuity, the higher the commission.
And then, looking at the variable and the indexed annuities, those are where the high commissions come into play, and you’ll see anywhere from 5-9%. And then, on the fixed annuity side, there’s some soft money arrangements that had been eliminated. On the variable annuity side, the SEC has stopped doing the incentive trips and all that stuff.
But I always kid people, if someone is selling you one indexed annuity and showing you one indexed annuity, they’re trying to earn the trip to Italy. And that still goes on in the annuity industry, and there’s no transparency to that, which is unfortunate.
And I would encourage people to ask the agent what the commission is. It really comes down to the more simple the product, the lower the commission. The more complex and long term the product, the higher the commission.
But the 5-7%, 5-9% commission on either variable or indexed. And if you go long term, some of those commissions can go as high as 9%. That’s a lot.
I’m not sure I totally sign off on that, coming from the brokerage world where it was a very low fee environment, and then when I came out here and I saw that, I’m like, “Wow. No wonder people just sell indexed annuities, even though that’s inappropriate.” But that’s the reason that there’s a lot of one-trick ponies in the annuity industry.
Andrew Chen 41:29
And for folks, because we didn’t actually define these things, what is an indexed annuity?
Stan Haithcock 41:34
An indexed annuity is a fixed annuity that was designed in 1995 as another industry version of a CD. I just got stats out today that the last 10 years, indexed annuity returns have averaged around 3.3% annually. But that’s not how they’re sold.
Indexed annuities are the hottest product out there because you’ll hear stuff like market upside with no downside, or market participation with principal protection. If that was true, then that’s all the feds should buy because that sounds too good to be true. And I tell people all the time, if the annuity sales pitch that you’re getting sounds too good to be true, it is every single time, no exceptions.
So, an indexed annuity is the go-go product right now, because in a sales pitch world, in a seminar world, it really shows well. But the reality is it’s a CD product, it’s a principal protection product, it’s a very good and efficient and cost-effective delivery system for income rider guarantees if you need income in the future, but if it sounds too good to be true, it is every single time.
And don’t allow anyone to show you backtested numbers, hypotheticals, theoreticals, projections, what it did do 10 years ago. That’s garbage, and in some states, it’s illegal. I wish it was illegal in all states.
Andrew Chen 42:48
So it sounds like you agree that it is totally fair game to ask the agent, “How are you being compensated, and how much for each specific product?”
Stan Haithcock 42:56
One hundred percent.
Andrew Chen 42:58
Should you always ask to see other annuity products from other competing insurance companies when you’re being sold an annuity product?
Stan Haithcock 43:05
Correct. Never allow someone just to show you one. And if they say, “I’ve looked at all of them, and this is the best one for you,” translation is it’s the best one for them.
Like I said, it’s a commodity product. If you’re solving for a specific goal, you should see 3-5 carrier quotes. Now, when you go to our site and run quotes, you’ll see 10-15 listing from top contractual guarantee down.
People always say, “Which one is your favorite annuity?”
I don’t have that. I don’t know. I represent all carriers.
My favorite annuity is the one that provides the highest contractual guarantee for your specific situation. But you need to see 3-5 different carriers for the solution that you’re trying to solve for.
Andrew Chen 43:49
How should a consumer vet an agent before buying an annuity from them? What questions should they always ask?
Stan Haithcock 43:55
That’s a hard one. I wish there was a clearing house. FINRA has a clearing house where you can go pull up brokers.
But from an independent agent, it’s the wild wild west. I know this sounds archaic, but you might just want to Google the person’s name and the word “complaint” beside it. That’s probably the easiest way to do it.
But the great part about annuity, I think one thing we need to cover, is every single annuity type, when you buy it, you get what’s called a “free look” time period where you can receive the policy, the policy is enforced, but you can get your money back. You don’t have to call the agent. You can call the company and get your money back.
And what I tell people, that’s pretty cool because you’re getting to test drive the product, and it’s enforced. So if someone high pressures someone into an annuity, and you get the policy, call the company and say, “Hey, this guy said it was going to do this, this, and this. Is that true?”
If the company says no, say, “Send me my money back,” and they will.
So, I think the annuity industry has built in that in case there’s some charlatans and sociopaths out there that are really pushing these products. I think the problem with that statement is most consumers don’t know that the “free look” exists, even though they put the little slip of paper in the policy. But it needs to be something that the annuity industry promotes.
If I was annuity czar for the day, first of all, the logo for the annuity industry would be called “Got Guarantees?” just like the “Got Milk?” ad, because it’s all about contractual guarantees.
And then I would say, “Listen, this is the only financial product on the planet you can test drive and get your money back. Why wouldn’t you do that?”
Meaning that you are protected. The insurance industry is protecting you from that slimy sales pitch at the bad chicken dinner seminar.
Andrew Chen 45:41
When you say test drive, though, what exactly are you test driving? Because when you pay the money, 30 days later, you haven’t gotten any money back yet, right?
Stan Haithcock 45:49
You’re only talking about one annuity. You’re talking about an immediate annuity. An immediate annuity, most cases, people know what they’re going to get.
But what I’m primarily talking about are variable annuities and indexed annuities. And some of the things that the sales pitch has pushed a little bit over the line, those are the ones that you can call up and say, “Is this sales pitch actually going to happen? This is what they say.”
Or “This is how I understood it, and this is where I base my decision to buy it. Is this true?” And if they say, “No, it’s not,” then you get your money back.
And also, sometimes people buy an annuity, and things change between the time they buy it and the time the policy is issued. Once again, you get that “free look” time period to get your money back.
Andrew Chen 46:33
We talked about agents. It sounds like there’s not a great vetting mechanism. But in terms of vetting insurance companies, how should investors evaluate the insurance companies that sell annuities besides just looking at their AM Best or Fitch ratings?
What questions should consumers be sure to ask to properly vet the insurance company they’re thinking about buying from?
Stan Haithcock 46:53
One of the services that I use, and I offer it for free on my site, is called COMDEX rankings. It has AM Best, Standard & Poor’s, Moody’s, and Fitch, all of those ratings. And then it has 1-100 score because no one knows what A, A+, AA are.
It has 1-100 score, 100 being perfect, of those carriers. That would be your first starting point. And then from there, most of these carriers have sites that list their financials, and you can dig in deep from there.
But if you’re really worried about carriers, or carriers going out of business, or the future, then you would buy the annuities underneath that state guarantee coverage amount, just to make sure that you’re covered, in case something goes wrong.
One of the things that’s interesting about the annuity industry that I’ve witnessed is that there’s a lot of self-regulation between carriers, meaning that annuities are confidence products. And the big carriers know that, and they don’t want to lose any confidence with the public, so they will swoop in and buy up smaller carriers if they were in trouble, to protect the golden goose.
I call it the annuity mafia, but it’s pro-consumer because the New York Life’s of the world – and I throw that out just because they’re one of the big ones – they’re not going to allow some small company to mess things up, in my opinion.
Andrew Chen 48:07
Meaning having a smear effect, like a small company goes under, then people question the validity of a big company, for example?
Stan Haithcock 48:12
Correct. The last thing the annuity company wants ever is, regardless of the annuity company, they don’t want someone like my mom to go on the nightly news and say she didn’t get her monthly income payment. They’re going to do everything possible to not have that happen because of the demographic tidal wave of these people hitting age 65.
If they do it right, if the annuity companies and the annuity industry would market this right, it would be a different world. But they just don’t. It’s like hurting cats.
Andrew Chen 48:42
You talked about the state guarantees. I’m sure every state is different, but what are the ranges of the guarantees that folks should expect?
Stan Haithcock 48:49
$100,000-300,000 per policy per owner. That’s what they’re looking at. And it’s dependent on the state.
The site is nolhga.com. You can pull up your state and find out what that state guarantee fund coverage is.
I will say this: The annuity industry has done a good job by self-regulating and handcuffing these companies not to do stupid things with your money. The state guarantee funds have really never been tested.
Now, maybe that changes in the future, but up until this point, I can’t point back to a time where chaos reigned and here’s how the state guarantee funds performed. At this point in time, it’s just a warm fuzzy safety blanket for people to buy annuities with.
Andrew Chen 49:38
And just for a rough mental shortcut, $100,000-300,000, let’s say we’re just talking about fixed immediate. That would translate into approximately how much of a monthly payment?
Stan Haithcock 49:54
I can’t tell you that unless I know your date of birth and when you started the income stream. People ask me that all the time, “Hey, what’s the payout on $100,000?”
It’s different if you’re 55 or 65 or 75 because your life expectancy is less. The less the life expectancy, the more the payments because of that.
And I never give numbers on interviews like this because I have a 24/7/365 quotation system that will give you those numbers. The reason I also don’t give numbers is they change every 7-10 days, like I mentioned before. Today’s number, if we’re recording this today, a year from now, it’s going to be completely different.
Because maybe life expectancy tables change, or interest rates change, even though interest rates play a secondary role in the income pricing. I personally believe that you have more risk in the life expectancy tables changing than you do drastic interest rate changes at this point in time.
Andrew Chen 50:47
Fair enough. We talked about state guarantees. I also wanted to understand whether annuity products are protected by the reinsurance market at all, or is it just like this mafia dynamic where big companies, they internally just do not want anything to happen to the industry, so they effectively guarantee it, even if there’s not an explicit reinsurance market?
Stan Haithcock 51:10
And the hope is that that continues, and they continue to police and step in and take care of everything. But there is a trend right now that’s going on where the hedge funds, the private equities, the family offices, the big money, the institutions are getting into the annuity space because of the demographic tidal wave.
And a lot of things are happening from the reinsurance area where the companies in Bermuda, etc. are buying lots of annuities. I don’t want to go in the weeds here, but there are some issues that are facing the annuity companies and the annuity industry where there needs to be more transparency on the reinsurance steps that are in place where companies are selling lots of annuities to these reinsurers.
At the end of the day, the state guarantee fund does protect you. But even myself, I got a call today from a lady that a large carrier had sold a bunch of the older annuities to a reinsurer, and she wanted to know what that meant. My comment was, “I think you’re okay because you’re with a big annuity company, but we’re digging in to find out what those numbers are and what those actually mean.”
And I encourage the annuity companies to be more transparent on that as this type of transaction continues.
Andrew Chen 52:24
For early retirees, so these are folks who are FIREd or plan to FIRE (Financial Independence, Retire Early), are there annuity products that exist for this group of investors, given that they’re effectively planning for up to two back-to-back 30-year retirements? Does it even make sense for early retirees to consider annuities?
Stan Haithcock 52:42
Most of the time, I tell people, if you’re less than 50, you probably shouldn’t look at annuities, except if there’s an extenuating circumstance, primarily because, like with deferred annuities, the IRS has a 59 ½ rule, which means that if you take money out before 59 ½, they ding you with a 10% penalty, so you don’t want that.
There are ways around it, which is creating a lifetime income stream through annuitization. That rule, if you want to get in the weeds, is called the 72(t) rule. We can do that.
But if you’re less than 50, I have no problem with you talking to me and giving me specific situations where it might make sense for you from an early retirement standpoint. But remember, if you’re really young and you’re buying a lifetime income stream, you’re locking in current interest rates, even though it’s a secondary pricing mechanism.
And also, you have a long life expectancy, so the payments aren’t going to be high. I’d rather you weather the storm a little bit with the markets, and to call me when you’re in your 50s.
Now, the exception to those rules is, for instance, in the State of Florida, in the State of Texas, as examples, annuities provide creditor protection. People talk about OJ Simpson having annuities and being arrested in Florida, but in some cases, I do have a bunch of so-called entrepreneurs or doctors or whatever that make a lot of money. They just want to protect the money, and they want to protect it from frivolous lawsuits.
In that case, if you’re young, annuities do make sense, but you do have to understand the limitations from the standpoint of liquidity, the 59 ½ rule, etc. But there are cases where it does make sense.
Andrew Chen 54:16
Don’t you believe there are other legal tools that are perhaps better at creditor protection and frivolous lawsuits than this?
Stan Haithcock 54:27
I would say yeah, you can make that argument, but the creditor protection statutes that you read in the State of Florida and the State of Texas, just as two examples for annuities, they’re locked down and they’re tight. What you can’t do is get sued and then buy an annuity.
But if the annuities are in place and someone comes at you, in those specific states (and there’s other states. I’m just giving those as examples), then you’re pretty much set.
You see a lot of people that are in litigious type jobs where there’s a possibility of getting sued. A lot of their money is in life insurance products and annuity products, so that they can protect that from the frivolous lawsuits, because lawyers just can’t go there.
Andrew Chen 55:09
And when you say protected from lawyers, is it correct that it’s only the principal that was invested? When you start getting payments, each of those payments, when it hits your bank account, can lawyers go after that?
Stan Haithcock 55:21
Yes, they can. If it’s inside the annuity structure, like a deferred annuity or a life insurance policy that has an internal growth mechanism inside of it, they can’t touch it. Once the money comes out and into a bank account, certainly, absolutely.
Andrew Chen 55:38
In high net worth and early retiree communities where investors are typically financially literate, capable of self-managing their own portfolio, I haven’t often seen annuities discussed as a retirement planning tool. I could also just be not aware of it.
But I’m just curious if you could comment on, at the end of the day, when you synthesize everything we’ve discussed, what type of investor do you think is a really good fit for annuities? What are the markers or profile characteristics that would indicate that the person is a really good fit for annuity versus not?
Stan Haithcock 56:12
A person that’s not fit for annuities is a person that can shoulder the risk and has no trouble with risk, has no problem with it at all, can manage it. It doesn’t affect them.
That could be a 40-year-old. It could be an 80-year-old. It doesn’t matter.
But the person that wants to transfer risk or set up guarantees. And a lot of times, for instance, myself, I’ve been married for 35 years, a lot of annuities I have in place are for my wife, because she doesn’t care about markets or anything like that. She just wants to know she can go see the kids and the grandkids, and I put in those pension type annuity payments for the rest of her life and my life that she can never outlive.
So, I think it depends on the situation. I would encourage people that say, “I never look at annuity because I can manage the markets. The markets are doing fine.”
You’re right, and you probably should not buy one, but maybe think about your spouse or partner, and say, “Would they need that? Would I need to put that in place or start incrementally putting those laddered income guarantees in place?”
That’s the way that I think anyone out there, it really comes down to: do you want to shoulder risk or transfer risk? And if you want to transfer risk, are you transferring the risk to protect the principal, or are you transferring the risk to provide a lifetime income stream and create that income floor that combines with a pension, if you’re so fortunate, Social Security, dividend stocks, rental income, whatever?
Because at the end of the day, when you get to chapter two of your life, the income floor is the most important thing because that’s the money hitting the bank account every single month.
I think that the 4% rule that people have always grabbed onto, “I can just keep my money in the market and pull 4% off,” that works in raging bull markets, works like a charm, and historically, it has worked. But the closer you get to retirement, the less time you have to make up for those potential losses. So the 4% rule needs to be reevaluated.
I just had a person on my podcast named Wade Pfau, and he did research into the 4% rule, and he doesn’t think it applies because when it was first introduced, it was only looking at U.S. markets, not European markets. And if you run it in the European markets or Asian markets, it doesn’t work.
So, those type of common thoughts, “I’ll just take 4% off the portfolio,” I think we need to reevaluate that. And that’s where annuities might fit from the standpoint of contractual guarantees.
I think the biggest hurdle for your listeners and viewers is loss of opportunity, the fact that they’re tying their money up in some type of thing. They could do better. Yes, you could do better.
Which leads me back to what I said earlier: You might be a candidate for what I call deferred SPIA, meaning don’t buy an annuity until you need that income to start right when you need it to start, and then you go shop all carriers for the highest contractual guarantee.
Andrew Chen 59:00
Stan, this has been extremely insightful. I love the candor, the no-nonsense, straight to the truth insight here. Where can listeners find out more about you and what you’re up to?
Stan Haithcock 59:14
Go to theannuityman.com. That’s where I would start because you can order my books. We’ll ship them to you for free, and no one is going to call you.
They’re really unique owner’s manuals that cover all the product types I’ve talked about. They’re 50-60 pages, easy reads, and we’ll ship them to you for free, no problem to do that.
Also, at theannuityman.com, you can use our calculators and you can run quotes 24/7/365, without anybody bothering you, etc.
People always say, “No one wakes up in the morning and wants to buy an annuity.” Our saying is “The Annuity Man” is where annuities are bought, not sold. We want you to understand what you’re getting, understand the good and the bad of that.
In addition, I do a podcast called “Fun With Annuities” in my YouTube channel, “Stan The Annuity Man.” We post 3-4 videos a week, and there’s right at 500, on all product types. So you can get educated without having to interact with anybody.
And of course, I’m available if you want to book a call with me.
Andrew Chen 1:00:11
Awesome. We’ll link to that resource in the show notes.
Thanks so much again for taking the time to chat with us. I look forward to sharing this with our audience, and best wishes on everything.
Stan Haithcock 1:00:20
Thanks for having me on.
Andrew Chen 1:00:21
Cheers. Take care.