Episode Transcript
Speaker 1 00:00:05 This is Annuity Straight Talk. Since 2008, your host Brian Anderson, has helped clients nationwide navigate the complex market for annuities With Brian's assistance, hundreds of clients have achieved a profitable and secure retirement. I would know because Brian has answered many of my questions concerning annuities and retirement planning so that you can benefit as well. Let's get started. Here's Brian.
Speaker 2 00:00:48 Hello and welcome everyone to the Annuity Straight Talk podcast episode number 90. My name is B Brian Anderson, coming to you from Western Montana, founder and creator of annuity straight talk.com answers to all your retire retirement questions, especially as they relate to annuities. Got a good team of guys that work with me, support me, have taught me a lot of stuff, great mentors in the business that are, uh, true heavyweights, uh, of ethics and financial capability. Blessed to have, uh, taken the path that I have to get where I am now. And I appreciate you guys supporting me as I continue that endeavor. Wanna encourage everyone to like, subscribe, comment to the podcast on, uh, your favorite podcast platform. Be it Apple, Google, Spotify, wherever you get it or comment, share it with your friends. We got it on YouTube as well. If you wanna see me, uh, sit in my little cabin and talk.
Speaker 2 00:01:40 Some people like to do that, but you do it however you like it. And there's also, with most of 'em, there's a newsletter that goes along with it that is one that goes along with this as well on episode 90. So, uh, I'm gonna do a bit of a product review for you guys and I'll share my screen eventually. Right now, I'm just gonna talk about, kind of lead up to it. Uh, the product I'm gonna cover today is the Athe Performance Elite 10 Plus. It's a mouthful. That's for anybody that doesn't know that's the marketing name of the product. Uh, that's what they call it. Performance Elite 10 Plus. I've got a newsletter, I'm gonna refer back and forth to it. I'll share the screen when I get to the some numbers cause I wanna show you guys something. Uh, but every time I notice a trend, it means it's well past time to talk about it.
Speaker 2 00:02:21 I try to get ahead of things to make sure the information is there for people who need it. Anybody who's been searching this product in the past, Hey, is this a good thing or not? Well, here's the answer, but in the past month or so, probably at least a dozen people have come and asked me for a second opinion and they're like, Hey, well this was proposed to me. What do you think? And for everyone that asks the question, there's a hundred or more that are either too shy to ask or just throw it away cuz they don't want to think about it. Uh, so this is a, you know, a service to those people who ask to give a more detailed response. I took some time and wrote the letter. I'm gonna document my opinion so that anybody who doesn't feel like reaching out, not only get a good analysis on it, but a better option.
Speaker 2 00:03:05 Now a lot of times when I talk about a product I don't necessarily love, people will say, yeah, well why don't you tell us what does work? So I'm gonna do both. I'm gonna prove the second part of that where the better option, uh, and let everybody know where I got the information. So it's out there, maybe not publicly available, but this product was is with a theme and you're gonna get more, uh, you know, more details on this podcast and you get in the newsletter, you wanna read it quick, but here you'll get to read it quick. Go to the newsletter, but you can uh, get a lot more detail here as well. So a theme's a decent company, not always been my favorite. I know some people that really don't like them. I think they got good lineup of products for multi-year fixed annuities.
Speaker 2 00:03:44 The migas to fixed index X annuities for growth or with guaranteed Income Rider. In most competitive situations, Athen is in the mix. So there's an argument to be made where they might be the best product in a lot of situations. So anybody who's listened enough, notice that for accumulation products, I go with uh, Midland first, then Mass Mutual, send na then a theme. And that's my opinion. But certain people will choose a theme based on, you know, what the contract offers. It's something that suits their, their preference a little bit better. I've sold a couple of 'em this year and that was exactly what it was. I showed all the options to people. The guys that are coming to me asking about the performance of Elite 10 plus, this is the only option they saw and that's where the issue is really. Cuz they didn't get a choice.
Speaker 2 00:04:30 They said here's the best one. And I don't think it's the best one. In the past I've had a couple of customer service issues with Athen, so I kind of stayed away from 'em for the most part. You know, when it comes to income situations, it's an objective analysis. You plug in the numbers, here's the highest payout. Sometimes it's a theme, sometimes it's American General, sometimes it's North American Midland Protective life has been up there. Lots of different companies can can come to the top for your situation. So I use 'em from time to time last year. They're very competitive in the fixed annuity market. So I went that direction with a handful of people, uh, got their multi-year guaranteed fixed annuities. In doing that in the past year, the customer service, I will say I was pleasantly surprised. It has improved quite a bit.
Speaker 2 00:05:13 I'm not as reluctant to recommend them as I once was. They're a good company and think they got good people working for me. They got some of those, uh, growing pains ironed out. And that goes back into, you know, a merger that happened about 10 years ago. Not the subject of this, it doesn't really matter. As for the performance Elite 10 plus it is an nudity focused on asset accumulation. Protect the downside, get upside potential attached to the market. The plus means an additional bonus you can get it with or without that bonus. If you take the plus you get up to a 16% first year bonus. And if you don't take the plus, if you just take the performance Elite 10 get up to a 10% bonus. When I say up to, it's because certain states have restrictions on bonuses. So the numbers above are what most people will see.
Speaker 2 00:06:01 Some won't, depending on the state you live in for the plus, I think there's one that one state that's only 14% anyway. So we're just talk generally speaking here. But that's based on the state, not the company. First problem I have with the contractors is that enhanced bonus comes with a 0.95% fee. So I think I am going to share my screen. I guess I should have printed the newsletter out so I could have my uh, my guide. But uh, here we go. And you can see on the product guide you have premium bonus is there's an annual rider charge rate. So my first problem is you take the plus option, it's 0.95% annual rider charge. All right? And you can see most states are 16% Connecticut, Idaho, Minnesota, New Jersey, 14 Florida, if you're over 65 is 15 Alaska's 10 Delaware is eight. Those are just state, uh, state regulated caps on bonuses.
Speaker 2 00:06:59 And if you take the base contract, you only get a 10% bonus, but you don't pay that fee. All right? That's the first part of that. So it costs something to get the extra bonus by way of a 0.95% fee. Now there are a few other benefits, you know, and one thing I don't like is like you're getting the bonus but it's bleeding it out over time. So is it gonna add add to more growth? No, because you're gonna end up paying a fee for it over time and you're just slowly giving back what they bonused you in the first place. So what you get with the 0.95%, a few other benefits that come with the enhancement list, those below enhanced liquidity. If you pay the fee, you can take up to a 20% free withdrawal in any year when the full 10% withdrawal wasn't taken the year before.
Speaker 2 00:07:41 This sounds nice, but it's fairly easy to do without paying a fee. You don't need the enhancement to take 10% withdrawals the day before your anniversary and 10% the day after it works out about the same but doesn't cost you anything. So anytime a product does that, I kinda like, eh, I don't think it's that great. Okay, return of premium is the second one. You can get your money back after the fourth year if you don't like it or your plans change. So I'd say this is a decent benefit, but in most cases, growth in the contract exceeds surrender fees by the fourth year. So I don't exactly think it's a deciding factor. I did a, a podcast several weeks ago where I talked about minimum guaranteed surrender values, state mandated minimum surrender values. And I showed you a 10 year contract that had a positive minimum guarantee after the fifth year.
Speaker 2 00:08:27 So you're within one year there. That's no growth whatsoever. So this could be seen as a decent benefit. But the problem is you get to four years thinking, hey, I might use that. What if you like it, you're stuck with that 0.95 fee and you never even exercise the return of pre premium benefit. Take it or leave it. I don't think that's a great reason to do it, but that's up to you. It'll be sold that way. A lot of people like, oh you can take, you know, return a premium. I know people that bought return of premiums four or five years ago. You know what? They didn't serve into the contract. They're just paying a fee for no reason. The third one is enhanced annuitization. Every contract has annuity options or can be commuted to a stream of lifetime income. And every contract's a little bit different.
Speaker 2 00:09:09 What they do or or how they spell out what the rules are when you can do it. A lot of contracts make you wait three to five years. Some you can do right away. This one, I don't know what the base without the plus bonus, I don't know what it is without that. But this gives you the enhanced ization, gives you the option to commute the account value for a stream of guaranteed lifetime income at an earlier date then would usually be available within that contract. Not other contracts within that contract. Most people who use the accumulation contracts that w or that way, I don't usually see 'em shooting for annuitization. I think people like to know that it's an option, but most people don't. So I don't consider this to be a deciding factor because there's a lot of contracts. If that is your goal one day you could probably get better terms without paying a fee.
Speaker 2 00:09:55 So I don't think there's a massive advantage to this fee, especially since it's just bleeding away. The bonus they gave you in the first place, it's an accumulation contract growth is important. Correct? So you're protected on the downside you want to grow. I'm gonna go back to their sheet here on this first page. Now there's lots of different index options and this is going to hold true for all of 'em. But I'm gonna pick, I'm gonna pick something simple. This is what I went through in the newsletter, okay? Fixed account one year guarantee, 3.6% is your fixed rate. All right? And 3% if you live in California, it's because California has limits on surrendered charges. So they don't get as good a deals. Some companies average the contracts out and I guess everybody else is supplementing California in a couple other states. But these guys are separating California and saying, all right, because of lower surrender charges, you're gonna get less out of it, right?
Speaker 2 00:10:49 Everybody likes the regulation that seems to benefit them, but it comes back to bite 'em cuz they don't get as much growth potential, right? So 3.6 is your fixed rate and instead of talking about the AI powered index or the NASDAQ fast convergence, whatever it is, right? We're just gonna look at the s and p 500 point to point index strategy, okay? One year cap. Now every one of these options has a fee for additional performance. You can get eight and a quarter if you have no fee. So that's a one year cap of eight and a quarter on the s and p 500 goes up nine you get eight, eight and a quarter. Or you can pay a 1.25% fee and you'll get 10.75 cap. The problem if it goes up nine good year, you still only get, you'll get nine, but you paid one and a quarter fee to get it.
Speaker 2 00:11:41 I don't think that's a big enough spread there to make it viable to do the extra. So those are the two we're gonna compare it to. Okay? Now we can look it's gonna and it's gonna hold true. The comparison I do is gonna hold true across the nasdaq, the ai, the s and p daily risk control, all these things are gonna change. Okay? So I'm not gonna talk about those just because then we gotta go into the, you know, the, the specifics of the index, okay? And we're gonna talk about the two easiest ones. The fixed rate in the account. Every index annuity has a fixed rate. You can just take the fixed rate for a year or two years or you can take a break from doing the indexing strategies, get a guaranteed yield, that's it, right? So it's there and a lot of people forget that.
Speaker 2 00:12:21 So 3.6 annually s and p 500 cap eight and a quarter or 10 and three quarters if you want to pay the fee, mention that it has enhanced earning potential. That is a choice you make. Every index option has the ability except for the fixed rate you pay one and a quarter to get additional performance potential. Now one thing that's important to note on this newsletter near the bottom of the page where we've got it right now that between the 10 and the 10 plus there's no distinction between growth potential or enhanced performance fees. So you have the same growth potential on the regular 10 than you do on the 10 plus. So I'd say, hey, if you like this contract, then I would go with just the regular old 10. I wouldn't add the plus, I wouldn't pay the fee cuz we can do all that other stuff that we want to.
Speaker 2 00:13:06 So take the 10% bonus, I'm gonna have to change that to bonus. Avoid the fee and learn how to use it. If you, you gotta, you learn how to use the contract if you like all the other benefits work with somebody who knows how to explain these and get that stuff without paying a fee for it. But so I said okay well don't take the 10 plus, just take the 10 if you really like it. This is, I went through this process with someone about six weeks ago and I thought why do you pay the extra bonus? I don't get it. You know, scratching my head didn't make sense to me. Then what did I do here? So it goes through all the different things here, right? Here's the issue, right? Free withdrawal percentage schedule. So then you look at the free withdrawal schedule and you go the performance Elite 10 is the dark blue year one 0% free withdrawal.
Speaker 2 00:13:55 Year two plus 5%. So if you don't take the 16, you can't get even 10% dang kind of a rock and a hard place. Now I don't like contracts that that restrict. There's a lot of contracts that are built for growth and they put all these big numbers on them but they crank that free withdrawal down to 5%. They can do it, keep an eye out for it. So then I don't think there's an advantage to buying the 10 plus. Now I look at it and say there's not really an advantage to buying the 10 either. Hopefully you guys are following me on this, okay? So a 5% free withdrawal is a deal breaker for me. It would still work for accumulation and accumulate just as well. Actually better than the other one cuz there's no fee. The only way this is wor would work if you're gonna park your money there and you know you'll never touch it, it'll work out just fine for those, those who want the extra options, don't want to pay a fee and you want a full 10% free withdrawal, you need to find a different contract.
Speaker 2 00:14:51 Okay, so here's where we get, I'm gonna eliminate the performance elite 10 and 10 plus entirely from my product selection list for those looking for accumulation. That's just me. If you like it, go for it. You got all the information here. All the things that could catch ya. And I did this with a great guy from uh, Seattle. We did a little bit of business, we looked at the 10, we looked at Athen and Midland and uh, MassMutual and he liked the Athen the best. I have no problem with that. But we went through the process of looking all at all the contracts. So why would he do the 10? Okay, several of you want to know. Everybody wants to know. What would you recommend as luck would have it, I got a perfect option and I don't have to talk you outta doing business with a theme to get you to look at it.
Speaker 2 00:15:36 Cause a lot of people look at, oh, I like a NASDAQ index and I like this and I like that. Okay, fine, it's your money, your choice. This is the performance Elite seven. Basically the same thing with a shorter surrender term. Okay? Now it also has a plus version. Go into that one here. So here's the performance Elite seven, you see it on the top left corner, right? They're also charging you a 0.95 for a bonus. That's 6% in most state, 5% in others, or you have the base version that is no bonus, right? Because I already explained why I want, it's the same thing. The 0.95 fee gives you a little bit of bonus. They drain it out over time with the fee so you're not getting a bonus. But it goes, those extra options are all the same. It's exactly the same. What I like to point out however, is that we're gonna go to the growth potential of it.
Speaker 2 00:16:27 The fixed account 4.15%, wasn't it 3.6 in the 10-year contract s and p 500 cap 10% without the fee 12.75 with the fee. So we are at eight and a quarter without a fee on the s and p five cap in the 10 year product. We're at 10% here on the seven. Are you really trying to accumulate money and protect the downside? If you are and you like a theme, this is the contract you go with game set match all over. This is the one that I sold. This is the process we go through to see if it's viable. And what I have to ask is like, did these other guys even give you an option? And then I had one guy say, oh well I'll go tell 'em I want the seven. Are you kidding me? Like maybe ask him why he didn't come up with it in the first place.
Speaker 2 00:17:15 Then they're just getting greedy and they, oh yeah, I'll sell you whatever you want, right? Pretty simple. I forgot I have a touch screen. Maybe be easier. Now what we have to do, what? What about the free withdrawal, right? This is a seven year surrender schedule, right? Free withdrawal percentage schedule, year one plus every year, 10%, right? Wow, we got our free withdrawal, we got better growth throughs. We've got a shorter contract if you like a theme. This is the product for accumulation Income products could be completely different. I can't make it any more clear than that. I don't know why anybody's showing you the performance Elite 10 plus. Honestly, unless they're just trying to make more money, you have to ask them if you even want to talk to 'em. I don't know why you don't pay for a bonus. You still get 10% free withdrawal and you get probably 10 to 15% more growth potential. That's pretty solid offer right there in comparison.
Speaker 2 00:18:12 Um, you don't need to pay a fee to get a giant bonus and some extra benefits that won't really deliver that much. Don't forget it's a shorter surrender schedule too. Some people I've talked to like how the Performance Elite looks, you got the seven or the 10, the base of the plus For anybody that likes the Athe product, I would always recommend the seven year option. And you gotta ask, why don't they sell it? I don't know, it's, it's just funny to me. Someone comes, well that's all they say and that, that creates confusion because then, so I had to find a, an option close enough to show that like that guy's full of it. He's not even willing to show you an option. And another thing they do is like, oh, we'll show you this index that's got a great history. It's only been around for two years, but it backdates really well.
Speaker 2 00:18:56 I don't buy into backdating. That's why I use the fixed rate and the s and p 500 cap. Okay? I don't understand why they don't give you an option. We're actually required to give you an option. So bottom line is you buy a 10 year annuity. If it offers more but not less, why would you buy a 10 if it doesn't offer as much benefit as a seven? We have 10 year options that offer more than the, you know, and you get to lock in a good deal for a little bit longer. I'm not saying don't buy a 10. There's some that I really like. You guys all know that I do have other contracts I like better than this, but they're different. And so a lot of people, some people buy too, some people split their money. This is a great split. You'll find no comp, you'll hear no complaint from me so long as you buy the right annuity.
Speaker 2 00:19:36 All right? Do you guys wanna talk to me? You gimme a call next week if you've seen this one, you wanna look at a different option. It's really simple to walk through these things. Index annuities are only complicated if they were not explained to you the right way. And that's why I go into detail and talk about the simple stuff so everybody can understand. Okay, this has been episode 90. The theme performance Elite 10 plus Santo is a mouthful. I can't even remember it after I said it so many times. Again, thank you guys for joining me. I certainly appreciate the opportunity to educate you and help you with your retirement planning decisions. Strip it down, go to the basics, do a little bit of research so that it's easy and that's what I'm here to help, help you do. So again, please subscribe to your favorite podcast platform or the YouTube channel and comment or share it with your friends.
Speaker 2 00:20:26 Get the message out there. Everybody needs help. Everybody deserves this level of service and this level of analysis. Not many people are willing to get it. There are good people out there, but that's not everyone. So I certainly appreciate the opportunity to serve you meeting with you or seeing you guys again next week for episode 91. Not quite sure what the topic is, but I got a couple ideas and I got about a week to work on it. So wish me luck and meet me back here and I will see you again next week. Okay, thanks guys. Bye.
Speaker 1 00:21:08 You have been listening to Annuity Straight Talk. The proceeding information is for informational and educational purposes only and does not represent tax, legal, or investment advice. The views expressed by guests on this program are their own and do not necessarily reflect the views of annuity, straight talk or its partners. No information presented today should be acted upon without meeting with the qualified and licensed professional. It is important that you read all insurance contract disclosures carefully before making a purchase. Decision guarantees are based on the financial strength and claims of the insurance company.
