Episode Transcript
[00:00:00] Hello and welcome, everybody, to the Annuity Straight Talk podcast. Episode number 208. This is going to be the last episode of 2025. My name is Brian Andersen, founder and creator of annuitystraighttalk.com grateful to every one of you for a good year and all the support, the positive feedback, the good ideas. Had some really great questions in the past few weeks that are going to kick off 2026 the right way. Please, like, subscribe or comment on any of your favorite podcast platforms or on YouTube. To schedule a call with me, hit the top right corner of any page on annuitystraight talk.com share it with your friends, your advisors, anybody you think it would benefit, anybody you think could poke holes on it or provide a different perspective. Those are always good. Makes everything better for you guys.
[00:00:45] I could do an episode next week right before New Year's, but I've done a couple of those good ones and nobody ever watches it. I guess everybody's all stuffed full of prime rib and ham and whatnot.
[00:00:56] So I'm going to give you guys a week off. I'm going to take the week off myself.
[00:00:59] Anyhow. Today we're just going to do a review. It's important to do these once in a while. When I first started doing this, I thought about it and it's like, oh, it's kind of a filler episode. But it's not actually, because new people come in all the time.
[00:01:10] Want to point to where you can find everything on the website?
[00:01:14] One thing that's not used as much, if you're watching the video. I'm going to go through this and start at the beginning of the year and talk about the most important. So stories, the most important information that I shared along the way.
[00:01:24] There's a search bar. You can search keywords, whatever it is to narrow down your search. But there's a lot of big stories. And it's pretty interesting because I look back at a lot of the stuff when I get to this point of the year, and it's a tremendous amount of work to do this, to do all this. Plus, Jeremy edits the podcast, posts it everywhere, YouTube or, you know, or just on the podcast. You can listen to it in your car or while you're working out, whatever it is. And it's always kind of like a sigh of relief. It's like, oh, I made it through another year going on 23. So January 9, 2025. John Ballmer, my buddy down in California who does the market analysis. A lot of people appreciate we're going to have him back soon because it's been several months.
[00:02:05] Big question at the beginning. The market really topped out at the end of 2024. Will it drop in 2025? Go back and watch that. What did he say? He said there's going to be some volatility. I expect to pull back sometime before the middle of the year, but the market should finish strong because the indicators are good. Well, what happened? March and april market lost 20%. Bounce back. It's up 10, 11, 12% for the year from the beginning. Not too bad. Maybe you should listen to us because we got some good stuff now around that time or the end of last year. The other story that was very next week, January 17th. I'm not going to go through every single one of them. I'll go quickly.
[00:02:43] One insurance company that did a lot of business in the income markets, the myga markets, got into some trouble. It's starting to sort out a little bit.
[00:02:50] But that was Sentinel Security Life. Nobody else that I know of with a big podcast mentioned it. I found out later, absolutely. That it's because they were selling it. I avoided those. And I try to tell you guys, safety is the most important thing. Take a few basis points off, maybe a touch less income. Most of the time it's not a whole lot less. But that company's back selling products and I don't know anyone in their right mind who wouldn't go back 12 months and look at the news cycle and say, you know what, maybe I'll go somewhere else. Okay, so annuity companies to avoid, stick with safety. Following that, don't fall for the fiduciary standard label. You are the only fiduciary. You're the only one who knows what's in your best interest. It's our job to educate you and present you with options. Most don't do that, whether they call themselves a fiduciary or not. I've seen some pretty crazy recommendations. Oh, just trust me, I'm a fiduciary. It doesn't work like that.
[00:03:40] So whether they say it or not, you still have to do your due diligence. Do not just take that word as the assumption of safety or a guarantee that it is the best thing for you because you're the only one that knows that. How California Fires Affected the Insurance Company. Good reminder that annuities are typically not in danger and do not get soaked up by catastrophic events like that. A lot of people rely on the state guarantee fund to do that, but it takes years and years for that to settle the insurance funds are more for those catastrophic instances like the California wildfires where an insurance company could lose billions in one fell swoop. Right.
[00:04:16] People still talk about it. I've covered that. There's a similar podcast. We did it about the hurricane in Florida a few years ago, four or five years ago. Probably have half a dozen podcasts. I'm going to have to keep doing and probably do one every year just because everybody still says that. I heard from a guy yesterday. Oh, well, I don't go over the limit of the guarantee fund. That's fine if you don't want to do that, but realize it's not the same kind of protection that you really think it is. Okay. All right. So that gets us into February sometime.
[00:04:41] Now we're all on this year's podcast. Start at the bottom. Buying the cheapest annuity and predictable regret. That was more about some people that really regretted being stuck with that company. Long term income deals. Do you want to be married to it for the rest of your life? Another case study on different income options that's always popular. That's a really good one to go back.
[00:05:02] Presents two different options with a different set of benefits. One with more income that's, you know, going to give you the maximum cash flow. One with more benefits, maybe lower fees or something like that. But it's not going to have the highest income, but you'll have a bigger residual. All those things. You have to weigh the options again. That's our job to educate you and show you what the different options are. Not to stay on the sentinel security thing too much, but I did issue the annuity fraud alert in Arizona. Explained in detail. I helped the consumers get to the Arizona State Insurance Department. They took it very seriously. That's something you need to watch out for. The checks that are in place to make sure that the money is transferred properly so that all disclosures are made. That was one of the coolest things I've ever done in my career. We actually got the agents involved to apologize. They settled for a chunk of money. Plus we're able to negotiate getting the money out of the final insurance company without surrender charges. So those guys were made whole because I was such a squeaky wheel. Great people.
[00:06:05] And at the end of it, they were good to go back. And some people thought, oh, you're just trying to sell an annuity. No way. I'm not going to try to do that. They've been through hell. They had two full surrenders. It cost them $120,000 and they were facing another surrender charge from a company that was in financial trouble.
[00:06:20] So they were very stressed. Over a four year period in a safe investment, they'd lost $120,000 of their retirement savings. So it's very, very happy that we were able to sort that out and get them made whole for the most part and put them in a good spot. So in April, we were dealing with a big market fallout. I got a comment from a client, talked about the benefits of annuities. They really stand out when the market's in bad shape. And I don't want the market to be bad, but that really underscores the benefit of having that guaranteed income, that safe, protected money, so that it doesn't affect you negatively. Got a great comment from someone and then that came back just a couple weeks ago where I did it again.
[00:06:58] Compared index annuities to the stock market over a two year run. Of course, the stock market's high index annuities were second place as far as yield goes.
[00:07:07] So if you're talking pure stock market, then the index annuities did not keep up over that time period. But if you're comparing them to bonds, they were substantially better than bonds. And if you look at a blended stock bond portfolio, they're neck and neck with what those would have produced. Roth conversions are still a big topic. I get it all the time. I'm not against them. I just don't think it really is going to benefit you. A lot of those guys go, hey, never pay taxes again. Most of the time is not the most efficient way to get there. I have a cynical mind about it. I don't believe it's always going to be tax free. You take a distribution from a Roth, they'll still issue a 1099. And then there were guys that were going and saying, hey, this big 20% annuity bonus will cover your taxes. It doesn't, because the tax savings would be in the annuity. So you have to have another reason to own the annuity anyway. Great ones to go back and revisit if you're thinking about these ones. Okay, then we did the hidden truth behind annuity sales and distribution. My buddy Nate, a former annuity wholesaler for two major companies, for 20 years he's working with me now. He's helping advise clients. He's got an incredible perspective because he's seen how hundreds and hundreds of agents operate. He knows the distribution system better than anyone.
[00:08:22] And the compensation model for those will dictate what products and why.
[00:08:27] And it's not always up to the agent. That's why I always wanted to stay independent because sometimes one of these companies that distributes the products doesn't have what's best for you. I'm limited some ways based on the distribution system as well. And there are times when I have to admit, yep, there's a better product in the broker dealer channel or something like that. Very few products I can't get. But if I can't get it and it's best for you, I will tell you.
[00:08:49] I don't need you to find out from someone else. And yeah, have you come back and call me a liar. Right. May 16th was awesome. Annuity income calculators. We got SPIA and GLWB calculators that we put live on the website. Only publicly available place you can get it. It'll give you an accurate quote that is general in nature. Call us if you want more detail or if you want to add more options to that.
[00:09:12] So that is available on the top of the page there's a link that says annuity calculators. Okay. You can do your own research on that. Get an idea. I took this tack a lot. This year is like annuities make you more money. I started with that in late May. Actually did kind of a case study for a client of mine who was rolling over a MYGA numbers suggested it was better for him to put a GLWB in his contract.
[00:09:35] And his investment manager really wanted to get those assets under management and said, no, you don't need an annuity. Well, he's one of those guys that doesn't need an annuity more than enough money. But we had to show the way it benefits benefited him and would create a larger portfolio. So the investment manager, if he was just patient and did the right thing for the client, would manage a bigger portfolio down the road.
[00:09:55] That was the mantra for a while. Make more money, right? Guys that listen all the time remember that. Now here's one like market volatility, interest rates and annuities. Again, John was here to analyze the market. What he expected after the drop in April and May, interest rates stayed steady. Everybody worried about that. And I hit that a little bit later as well.
[00:10:14] So a lot of things I talked about and I have to keep talking about it because a lot of people come in and don't remember what I said. Oh, the Fed's dropping rates. I should act fast. We'll get to that in a little bit. Product comparison, SPIA versus glwb. Immediate income or deferred income. That Would be a DIA versus glwb. Done a lot of stuff on that. Direct comparison of two different spots. Sometimes a GLWB produces the highest immediate income.
[00:10:44] Sometimes the SPIA does. Every case is different. I don't know anybody else who looks at all of them. Just something we do. Because again, I know you guys are shoppers. I know how I get you. That's how I'm going to lose you. I'm going to lose you if I'm not honest. If I'm going to lose you if I don't show you Everything right. Gets us to the middle of the year. Lots and lots of episodes.
[00:11:02] In June I did one of my great once in a lifetime trips. And I thought about this because somebody challenged a claim I made in the podcast in the past. Do annuity owners live longer? Yes. There are some data that suggests it's true through the peace of mind, the lack of stress.
[00:11:14] I think they said four to five years longer with people with guaranteed income. So that's good. Covered the best fixed index annuities for growth. My choice is why they are somewhat limited and how they're pretty much the same across the entire market. A reminder of the 5 to 7% annuity income. It's even a little higher now. It's funny, right after that rates came up a little bit. Ooh. And everybody thought they're going to drop. But I look back at one of the very first podcasts we did. Oh. We had a 5% payout for a 65 year old couple. Now it's 7% and higher.
[00:11:43] So it's a 40% increase in income since the beginning of the podcast. That's about four years ago. So early. Well, four and a half, right? Deferred annuity income is powerful. Incredible payouts. Look how it can guarantee income, make your life easy and grow more money in your portfolio. We hit Allianz again. I think there's another one too. Again, they're not bad products. I think they're oversold and their focus is put on the wrong benefit. People aren't really recognizing the bottom line and thinking about the realistic expectations that you to get into those because I know a lot of people that have them and are fine with them. It's because they didn't put crazy expectations on them. Why I don't chase myga rates. I don't do that just because again, you're giving up safety. There's a lot of private equity coming into small insurance companies, companies you've never heard of produce higher rates. There's One company that takes the agent out of it. So you get no financial planning to go along with it. That's your choice. You do what you want with your money. That's not what I'm going to do. So we looked at some real fixed index annuity performance results. You want to say you compared to the stock market, Compare it to bonds. I showed a couple of contracts that are averaging between 8 and almost 10% in the past three years. One of those contracts came through and hit a reset again just in the past few weeks. Got another 10 and a half percent.
[00:12:59] It's doing really well. Beware deadbeat annuity agents. That's all the calls I get from people who aren't getting serviced on their contracts. If you got a contract from me and you don't hear like we've got automated emails that go out every year, yes, there are plenty of you. I'm always available for anyone who needs it. Do business with someone who promises to be there and hold their feet to the fire. Pretty easy. We had Nate back in August when he came to visit to talk about the annuity he bought from me and why he bought that one specifically. It's not appropriate for everyone, but it's the kind of annuity that's really good for some guaranteed income, some guaranteed no loss protection index annuity, good market upside, all those things with no fee. That's why he did it. Then I went marketing sales pitch to talk about the bonus annuities, how other guys sell them. I thought, okay, well, I'll tell people what it really means. But the 17.42% first year index annuity return, a true bonus annuity, that cash value up front with the fixed rate will guarantee that's your first year yield. Now, bonus annuities come with lower growth potential, but you gotta decide, do you want it upfront in exchange for a little bit lower growth over time, or do you want to have maximum growth in an index annuity? Then you skip the bonus and you go with higher rates. Pretty easy. And then the next week I showed an example of a client who did it the year before. He got a 14% bonus. He got 6.5% on the S&P 500. He went over 20% in his first year. That was coming out of an Allianz contract that had never done more than 2%.
[00:14:16] He was really happy and that worked really well for him. So just some proof and it's not, oh, you got to get this. But if that's what you're looking at, I keep track of all this stuff so that I can give you real examples when we talk. I'm going to cover a podcast that Leandra talked about. My lovely assistant many of you have met. Everybody's pleased with her. She does a great job and has the best positive attitude ever.
[00:14:38] Always brightens your day when you talk to her. And she said, you know what's funny is like, well, these sales ideas over the years where they were inventing case studies. She said, wouldn't you share a case study? It's a real story. I'm like, oh, of course it is. I'm not making anything up. So down to the last page.
[00:14:53] Exciting, Big year, Lots of episodes. Go find the ones that work for you guys. If you're just starting out, this is a really good one to look back and say, okay, let me pick a few of these. If you need some help or want to tell me what your specific focus is, I can send you some or give you ideas.
[00:15:08] We ran into a lot of people getting bad advice. In one week, I had one person who, you know, a big portfolio, a million and a half plus. Hey, put all your money into this annuity.
[00:15:20] Terrible idea when you don't even know what an annuity is.
[00:15:23] No way. No bueno. And in the same week, I had a couple who was getting out of an esop and they had a deadline to move the money and people were trying to push them to buy an annuity with the money. I said, no, roll it into an IRA at Schwab first and take your time. That's what they did. Still working with those guys. But that was back September 19th. We are three months later. They still have not made any major moves that open up the door so they could take their time and relax. You know, one of them's still working, so they're busy. They weren't forced into making a million dollar commitment because everybody else was trying to get them to move their money to the final spot. Kick the can down the road, put it in. An IRA opens up all sorts of flexibility. You can roll it in one day, one week, one month, or a year. Okay, maximum guaranteed income versus no fee income. That's another one. That's income. Annuities, with or without a fee.
[00:16:11] Are CDs a scam? No, they're not a scam. They're easy. But don't ever complain about me making a commission on annuities. If you really look in and realize how much the bank makes off your CD money, they pay you 4% and they loan it out 10 times. And make 50, 60%. Crazy, huh?
[00:16:29] Whole different set of rules there. And they don't even pay you for participation. Another one, you make more money with annuities. I had to be direct. The point of this is to show you how to make more money. Episode 200 was good. Annuities protecting parents, preserving a legacy. Just to talk about getting your house in order.
[00:16:45] Making sure that the important people that will be there to take care of you and manage your assets at some point are looped into it so they don't have to go at a couple clients who are really trying to understand their parents financial plan when it's getting kind of late in the game. And that can be tough. So I thought that was a good episode because it's something everybody can do. We will all need help at some point in time. Make it easy on those who will help us.
[00:17:09] Annuities required minimum distribution. Whether you're stabilizing the market or you got an income contract that offsets a big portion of what you got to pull from other IRAs, yes, you can make more money if managing RMDs is your only reason for using an annuity. Then I looked at an actual alliance statement. Nice lady who shared her statements with me was making 0.6% over the past five years. Then we hit Fidelity's annuity quotes a lot of times because a lot of information on Fidelity. I got one client who kind of keeps me in the loop, reads a lot of stuff. Great guy Eric in San Diego. Shout out. Thank you. I told him the other day, he gave me another great idea that's coming out in the new year. It's like, man, you should be my producer. He's busy with his own productive job. So I appreciate that as well. So fixed index annuities for growth versus guaranteed income. Two purposes for using them. Make sure you know exactly what you're doing. There's a lot of guys that will sell you guaranteed income and say it's growth. And a lot of guys will sell you growth and say you can get guaranteed income. I had one client that's been new but before she met me was sold a growth contract, told it was guaranteed income. So she just happily drew the money out every month thinking she had guaranteed income. And she got 19 years into it and the company stopped paying because it was out of money. So that's a really bum deal. Make sure you know what you're getting.
[00:18:24] How to choose the best fixed index annuity. The criteria I use, the things that I think you should use as well. The questions you should ask index Universal life is a huge part of retirement pitches. I picked that apart. I got a comment from Bill. Thank you, Bill. I have not responded to you yet. Yes, there are ways you can do it correctly. I left the door open for doing that. My opinion is you should just use whole life insurance for those things. Don't expect to knock it out of the park. Understand the fundamentals of financial products before you get deep into a plan with unreasonable expectations. And then last time, like I talked about the guy in April who said, hey, this is great. I didn't freak out when the market dropped because I get guaranteed income. He came back just a month ago or so and said, hey, never thought I'd feel this peaceful and, you know, carefree in retirement. This is great. We're 18 months into an income stream. Got a long way to go. It's automatic. You're right, it's there. It's direct deposit. Piece of cake. That is sleep at night. Annuities, that's the point. Relieve stress, reduce stress. And so that kind of wraps up this year in 2025 where we're at. Here's the review. I'm going to try to go after it in 2026 the same way. Can't stress enough that your comments, feedback and questions contribute greatly to the information I'm able to share. It gives me an idea and allows me to share information that is relevant to what you're doing now. And I will continue to do so in 2026. Got 52 weeks ahead of us. We'll see how many I can do. Thank you so much for joining me. I want to wish everyone a merry Christmas and a happy New Year. I'll be back after the new year. Probably do some writing in the next two weeks and get started the right way. So thank you guys so much for joining me again for episode 208, caps off a great 2025. Markets are good. Interest rates are good.
[00:20:09] They didn't drop like I said they wouldn't. So I could go. Where was I right? Where was I wrong? You guys want me to do that? But no, thanks. And enjoy the holidays with your families. I'm still available if you want to chat. I'm usually pretty quiet this year, so I'm open for, for good discussions. I'm gonna go to Florida to see my dad and my uncle and my cousins. That's gonna be great. So you guys have a great holiday season. I will see you in 2026 and we'll get kicked off. Again, thank you so much for joining me. And you guys have a great day. Okay, Bye.
