Episode Transcript
[00:00:00] Speaker A: Hello and welcome to the Annuity Straight Talk podcast, episode number 118.
My name is Brian Anderson, founder and creator of this wonderful website that people are finding quite useful for retirement planning.
Wrote every word, did it all. Now I'm recording every episode. Make sure we get the best information out to good people who want to make great decisions. It's been a hell of a year and I'm here to recap 2023 for everyone.
If you're new to it, maybe get some ideas of old episodes that you can go look at that might help.
This is the first one I've recorded in a while, so I'm a little bit rusty. Hopefully that doesn't show through and I can still deliver some decent information. This time I was on the road. Many of you know that took a long road trip to go hunting with some friends. Kansas, Arizona. Covered a total of eleven states. Dragging a camper with my truck, 5800 and some od miles total in about six weeks.
It was supposed to be a working vacation, and the biggest thing about 2023 for me is I've been busier than ever.
And so I take the show on the road and everything comes printer ups, supplies. I didn't bring the camera equipment because everything was pre recorded, but I ended up working 95% of the time.
So I wouldn't say I was burned out, but it was kind of disappointing in some ways. But also I really enjoy what I do and I like talking to everybody. Great to share stories.
So I was very productive. So it was just me in the office in a camper somewhere between here and eleven states across the western uS.
Did get to meet a couple of people in person as well, which was lovely.
For those of you that can't travel to Montana or haven't yet, a lot of people like to come see national parks. Western Montana is beautiful. Anyway, love to meet everyone that I can. When I'm on the road, I like to let people know if at all possible we do get together. So anyway, headline of this recap is that interest rates have dropped to end the year.
Now I'm going to go back to some of these episodes, share the screen for anybody watching the video so we can kind of have a little bit of a visual aid. And we're going to look at the newsletter page because this is where everything's hidden. We've got the podcast and the newsletter. Most of these, almost all of them have written. It's a tremendous amount of work to write everything and then also record it, but it gives everybody a different type of medium. Some people like to listen to it at the gym on the way to work, or some people like to watch it having a cup of coffee on the weekend. And some people say, I just want the gist of it. You can usually read the article in two or three minutes. And so when we go to the newsletter page, if you want to look up old episodes, I want to urge everybody, there's a little search bar here. Somebody commented to me a few weeks ago. I said, hey, go look up this newsletter and find it. And they scrolled through the whole list and I had a hard time finding the search bar is. So if I mention an episode in here, you can go type the title or just a few words of it, hit search and you'll get all the results. Come up. It's an easier way to find it. That's why we added it a long time ago. I want to make sure everybody knows to use it.
If you're looking for, say, income, I want to know everything you wrote about income. Just type income and there's going to be about 20 tiles come up and you can go choose based on the title. You can read a little bit of the newsletter, and if that's what you're looking for, then go to the podcast because obviously there's going to be a lot more detail.
But to get everything on, this is my 49th episode of the year. We got one more for New Year's, but you're going to have to go to the fourth page of this to get to the beginning of this year. Kind of started it with, if you're watching the screen, you look one of the last ones last year was the 2022 review on December 16, and I remember John Balmer and I did seven ideas for retirees in 2023. He's going to be on the last episode next week right before New Year's, and I don't know what our topic is going to be, but we'll get together in the next few days, get something recorded. Again, always good to have him. A lot of people appreciate the information and analysis. So if I look at this, what we started last year with was interesting. If I didn't say it already, I'm going to eat my words on one of them because I thought rates were really going to dive in 2023. So at the beginning of this year, we saw the rates come off of multi year highs. I know how to help people navigate different interest rate environments because I've been through it throughout my career. I'm going on 21 years as of sometime in February.
So we've seen it, and I can tell you that it's so much more fun to deliver. Fixed annuities with a solid rate index, annuities with a ton of growth potential, income deals that have really early break even points, just everything. No matter what you're looking to do, now is an incredible time to do it. What we've seen in the past six weeks, since I was on the road, you've seen the treasury rates drop by, well, more than 1%, 1.2%. Now, annuities don't move that quickly, but we're on the tail end of some of the best deals that I've ever seen in my career. Understand that no matter what environment we're dealing with, I'm going to have the best way to navigate retirement, given those factors.
So we'll see what happens. But last year, in the beginning of January, we'd already come off multi year highs. And all the analysts that I read or listened to talked to said, hey, I think rates are really going to fall off.
And so I was thinking this year was going to be tougher than it had been the year before, because we saw rates really settle down the ten year treasury into the mid to low 3% range.
Now it's somewhere high 3%. But I was pleasantly surprised and very grateful of the opportunity that we have, even though inflation is high. But rates did climb. The treasury went over five. Briefly, a lot of the contracts you can get today, and maybe not for very long, but that are available right now. So I've been working all the way up to Christmas, and then I'm just going to keep going through because, you guys know, I take my time when I need to take my time, and right now, I'll spend a few days with the family, but that's about it. And I'm back in here chugging away.
So at the beginning of the year, we looked at, like, pension versus annuity, because a lot of people, that was a good episode for people. A lot of people still do have pensions. Not everybody, but you're faced with taking the lump sum and buying an annuity with it, or taking the pension payments from the company that you worked for. There's a lot of reasons for doing one or the other.
Everybody that's looking for retirement income is kind of faced with this decision, whether you have a pension or not, because even if you don't have a company pension with a big cash value, you're still looking at a. An IRa, a balance that you saved up for years, and deciding whether you want to take that lump sum and convert it to income. I did the next week case study. Guaranteed income is back where I talked about a guy that I met because of the pensioner annuity question. And I thought, wow, these income deals, the way they looked, were just perfect. And if you've been around for a long time, I used to not like them. If we go back into really low rates, I'm probably going to pull back off of that and start talking shorter term stuff with people. Just understand that I'm going to be shifting my advice to accommodate the tools we have to work with coming down the lane.
So end of January, product review, safety, growth and income, everybody. Hey, protect money.
I want growth.
And I also need a little guaranteed income. That's a line of products that are no fee income products. They've got higher growth. You're not paying a fee. So now it's draining the balance. If you want all three, you got to take a little less of each. The growth is good, but it's not as good as just a growth contract. They're all safe. Okay. And the income is not as high because you're not paying a fee. The fee allows a company to pad reserves. I talked about that a little bit later.
That's a really good product. Those are kind of all around. That's where you run into the ones I don't like from Allianz. I've talked about that a lot. I might have to do it again because some people don't seem to be able to find it, which is okay. If I got to remind people, I will. If you need an idea of where that can be found, I'll tell you.
And again, too many people sell just, oh, I only sell ollions. Well, popular products like the two, two, two and the ABC are good for a specific purpose. They're suitable for certain situations. Are they the best? I don't think so. And they're certainly not the only ones. That's why anybody who says that's all I sell loses credibility in my book because they're not even willing to show you options, not to spend too much time on that. So I'm going to go to the third page. We're going to count our way back to now, and I'm going to talk about some of the things that I think are applicable, not go through every single one of them. But, oh, there's one we love. Fisher investments versus annuity. Straight talk. And in that we talked about a page they had talking about index annuities. And I showed everybody how it was misleading. And not only half truths. Part of the information wasn't a full, unbiased analysis of it. So I thought it was really funny. People know. I think most people are on to Ken Fisher. Some like him, some don't. I never say that what he does is bad. It's for a specific purpose. That's what he's catering to, is that audience of people who probably wouldn't like annuities anyway. So that's a good one to go back to. If you run into Ken Fisher, you got more than 500,000. A lot of people I talk to. Oh, yeah. Well, we talked to the Fisher investments again. Some people like them, some people don't.
Guaranteed income with or without fees was a really good one as well, that talked about people that say, well, it's really common, I don't want to pay fees. And in that episode, a lady said, I really don't want to pay fees.
So you get an income contract without fees. It's kind of like that old episode, safety, growth and income.
And because you're not paying a fee, it's going to cost more to produce the same amount of income.
If you pay a fee, it costs you less. And the reason being the company takes that fee and it pads their reserves so they can insure against the risk of you living way too long and collecting that payment for longer. So you pay the fee, you save money. You got to decide if you want that extra money in the annuity without a fee or if you want to just get the most efficient. You go maximum income, you pay a fee. Doesn't matter because it saves you money on the front end. If you want it all in one, you got to spend more to get more benefit. And then right behind that case study annuity income options, that shows you every different way you can do income. Guaranteed income with an annuity. That's a really good one for people looking at retirement who haven't done this before. Hey, this is literally every possible way you could do it. It starts you with a broad search so that you can focus in on your strategy instead of products. So many people come to me, I've met with three different people. I got these product ideas. The first question, why are you buying an annuity? A lot of them say, I don't know. They just said I should buy them.
Case study annuity income options, March 10, 2023.
It's going to show you if you need income, read those, and you can zero and say, you know what? I kind of like these two. I think there's four different ways that I highlighted doing it, and it's a piece of cake. Then you can look at it and say, well, I like these two, so I want to compare those. Typically when we do an income case, or when I do it for someone, we look at all four options so they can choose, and we go strategy first, product later. Once you decide strategy, hey, I'll pay a fee and I want maximum income. Go to the database. Here's the top product. I like aa plus. I don't usually go a minus.
That's up to you. But I disclose all that stuff, so it's an open book and you get a really good chance of going through seeing everything that's out there. The kind of thing that you'd have to be very knowledgeable in the world of annuities and meet with ten or twelve people, different people, to get the same thing that you're going to get. Here, a 30 minutes initial consultation and an hour follow up where we talk about your case, it's going to save you so much time. Doesn't mean you have to buy one, but that's the way I would look at it if I were you. Okay. Income was a big deal this year because I previously had not sold a lot of income deals for quite a while. And the fact that we did more of them this year means that it was a better deal and often came out as the best deal and the most desirable for a lot of people.
Of course, we covered basics of how indexed annuities work. We talked a lot about that. Again, I sell index annuities for growth, are probably the smallest part of my business right now, but I talk about them a lot because they require more explanation. And there's a lot of guys out there that are, this is kind of funny. A lot of people come to me and they say, well, I'm thinking about protecting some money. I don't need the income, I just want to grow it. And they're looking at index annuities. It's like, well, we had bonds and I've looked at CDs and now index annuities, you don't make that jump. Bond CDs, index annuities, you got to stop at migas fixed annuities first.
So we talked about that down the road, I'll probably get to it a little bit later. Had an alliance, two. Two guaranteed income case. That's a really good one for a younger person. Again, I think that product is built for probably people in their early 50s that have ten years to wait. It can be used as a legacy product I don't love it for that because I think the illustrations are overblown.
But there's a clear and cut case study of, you take the fully guaranteed or the alliance. Two, two, two. And those guys chose the fully guaranteed annuities create a legacy on May 4, 2023. That was interesting, talking to one couple. Oh, we know we need the income, but we feel like if we buy this annuity, then we're not going to be able to leave as much to our kids. And that's one of those people where that was important to them. It's not the same for everybody. And that's one thing to remember, is that annuities create a legacy because it allows for additional growth inside your portfolio, takes pressure off your portfolio. You can take more risk. You can let it grow longer, stay long term invested, which leads to more growth over time in just about every scenario. So while it feels like you're letting go of some money, you're actually making much more on the back end because you took the pressure off, and you never have to worry about that income. The peace of mind, somebody giving you a paycheck for the rest of your life is amazing, right? Oh, man. Page two.
And again, you guys can scroll through these things, or you can search on any of them that you want to look at. Specifically, what annuities do I have on May 19? That was a really good one. A lot of people. What do you sell? And I think they're conditioned because they go to two or three people and someone throws a product in front of them. I got them all. If I don't have it, and it's the right thing. Probably a couple of dozen people this year. Hey, I want this annuity. This is what it is. It's something I don't sell. I make sure they understand it. I'm going to touch on that because I did a specific podcast about that. I don't have anything specific. My goal is to help you figure out what you need in a lot of the cases. I do have access to that product, and it's something that I'm going to try. I'll shoot for the business and appreciate the opportunity from everyone, but it's important to understand that I don't sit there and think of when you first call me. I don't sit there and think of, hey, what about this product? What about that product? I got to know what you're looking at first. That goes to June 25. Why? Midland national is my number one recommendation. Fantastic company. Had a great experience at one of their conferences. A lot of high level advisors. I really liked it, and that's not typical. I don't usually like the industry stuff. I went to this one, had a great time, learned a lot from some really sharp guys. And the level of professionalism was higher than I had experienced anywhere else in 21 years. But going back to what annuities do I have? Midland national.
They've got competitive products for growth, for income. They're not always the best, but they're often close.
And I looked at it, and even though it's my number one recommendation, it made up for just under 20% of my sales for the year. I don't have an agenda. I'm just sharing with you what I know. We did a full blown retirement plan as well. That was one. I get a lot. Well, you're not a financial planner.
Excuse me. All this is done in the context of a retirement plan. Went through the full blown plan, talked about the ten or twelve or 13 things that you could consider. We talk about Medicare, we talk about income, we talk about Social Security, we talk about legacy planning, tax planning, roth conversions. Everything that could be important to you is covered. When I recommend an annuity, it's with respect to all the things that you could face. I tell people all the time, I'm never going to sell you something that's going to put you in a bind ten or twelve or 15 years from now.
That's the way it's supposed to happen. Better relationships are built. We have easier conversations.
It's a piece of cake. I did a story about what if a grizzly bear kills me? Interesting story about times in Alaska. That's talking about business succession for me. I'm going to introduce to you someone who's joining my team. Very excited about that. But that's going to be information in the new year, and we will have her join us probably just to say hello to everybody. It's good stuff.
One thing about second opinion on annuities, which was in July, a lot of people, what do you think of this?
And I remember it goes back to what annuities do. I have all that stuff.
I'm not going to fight everyone who wants to buy an annuity from someone else. It's like there was a time, it's like, oh, I think I can do better.
I'm pulling back. If you want a second opinion, you got to answer three questions. Right. Do you understand the product? Number one. And a lot of people fall on that one because they think it does something that won't. Number two, do you believe that is suited to your purpose or to your goals. So, yes, I understand it. Yes, it helps me accomplish my goals. Number three is, do you trust the guy selling it to, you know, he's going to be there to help you out.
I get a call from a lot of people that, oh, this guy sold me, so I know I lost him. Right. I'm not always the best at communicating, but I am always here. Answer those three questions and you have my blessing. Go ahead and do whatever you want.
It's your money and I just want to make sure you make good decisions. If it's doing business with someone else, I love it. When I had a call a couple weeks ago with a guy, he wanted me to, hey, tell me what you think of this annuity. And it actually was one of my favorite annuities. It's from mass mutual ascend. And I said, what's your purpose?
And he explained it exactly. And you understand the product? Yeah, I get it. And he did. And I said, well, congratulations. That's one of my favorite products. And if you were coming to me with those exact goals, this is definitely an option I would give you. So go for it. The guy you're dealing with sounds good. I didn't make any money on that. I'm doing a service. That's the idea, right? Had an annuity. Straight talk, review, communication issues with a past customer.
I wanted to face that head on and talk about where the breakdown in communication was. Hopefully we can repair that. I think we'll be fine over time. But again, I do my best and it's not something I'm going to try to sweep under the rug or scrub off. It is what it is, and it's there. And last one on this page from August is you have to want an annuity in that one. I told a story about a pack trip I went on with a couple of friends, guys that are retired, two really successful guys that I look up to. Great to hang out with, very accomplished outdoorsmen, successful in business and in life.
How neither one of them was likely suited to an annuity.
Those guys, being friends of mine, I don't push them too hard. We talk finance, we talk all sorts of stuff like that.
One of them has come to me and said, hey, should I buy an annuity? And based on his personality and what he normally does with his money, as hard as he works and the type of ventures he goes after with that, I consider him to not be suitable for it. He's not the kind of guy that's going to park money and not want to touch it. He's going to see a real estate deal he wants to take down. And I said, it's not right for it, but you have to want one. He wants one because he likes me. Hey, throw me a bone. I don't want to do that just so he'll give me a little bit of money.
I'd rather go ride mules with him and go fishing. Right.
A lot of people run into that. That's the same thing that I see all the time. Goes back to product selection, meeting with two or three people, seeing products before you have a strategy, why are you doing it? Is this what you want? And I disqualify a lot of people based on that alone. And it's not that they couldn't use one, but it's not what I think. It's a matter of just your personality. It has to match your preferences and your style.
It has to be for security purposes. Peace of mind, luxury item. You stick it away, you know, you always got the money, you always got the income, you always got the cash. Whatever it is, that's what it's for.
And if you don't care about her, that's not your primary purpose. Maybe it's based on age, maybe it's based on risk tolerance. Whatever it is, there is no cookie cutter model to determine whether you need an annuity. And a lot of people out there, hey, you're 60 years old, 65. You're retiring in two years. You need an annuity. Why? That's an easy question to answer.
You're the one that determines whether you want one. And now we are on the first page, so easiest stuff to find. Newsletter page. Oh, yeah. Right off the bat. August 17, annuities for dummies with Carrie Pector wrote the book annuity. Straight Talk got mentioned in there for its flex strategy. It's interesting. It's really difficult to brand something that nobody's ever heard of. But I love the fact that the AST Flex strategy has kind of branded itself because we've been doing it long enough. So just kind of an interview with Kerry to introduce the second edition of annuities for dummies, where we got an honorable mention in there, which that was awesome. Right along. A lot of the other good dudes in the business, there's a bunch of morons out there, but not all of them. There's some really good people, and I think I'm going to do an episode. Maybe you guys can tell me if you think that'd be good. Is like annuity websites you can trust. It'd be kind of tough not to single some out. And then if I leave somebody out, then make you think that I don't trust them or you shouldn't trust them. I don't know. So I'll have to think about that one, but it's a possibility. Speaking of the Flex strategy, we talk about it, the old videos are out there. I probably should redo them. But a lot of people are just going to the podcast for information now, so we'll see what happens and what kind of time I have. But I did an update on the AST Flex strategy in 2023, and it's no longer just a different way of using annuities. It's a way to analyze the different ways of using annuities. We can do a lot of different things for it. And so what I did in that instance is I did a case study.
Are you better off with guaranteed income, or are you better off keeping control of your assets and having flexibility with withdrawals? The Flex strategy, all that stuff. But the way the spreadsheet works, it allows us to evaluate those two. So you can see, you can see the results of it, and a lot of people are using that and then swinging back to say, yeah, I think I'm going to take guaranteed income. Right.
Really interesting stuff. Because a lot of the big management institutions are recommending annuities, and I'm going to cover that probably right after the first of the year. And again, I just think there's so much more in it for people than the next one. 9.3% annual annuity return. It's a banner ad that's all over the Internet, whatever it is. 8%, 10%.
I'm calling that out because it's misleading. It's not a 9.3% return.
A lot of people, 78%.
If you see something, seven, eight, 9%, 10%. What it is, it's a roll up or it's a phantom bonus or a roll up. Everybody knows how Social Security increases every year. You wait, it goes up a percentage. That's the same thing here. 9.3%.
It's either a bonus, a teaser bonus, or it's a roll up rate where income increases by 9.3. But it means something different than what it reads. That's why I consider it to be misleading. Another story. Annuities are settled. That was about my hunting trip and riding a mule in the dark and then picking their steps and feeling like the mules were. They knew their way, their eyes collect more light. They can see, when I can't. And it's the security of having that is so similar to what you do in retirement when you add an annuity to your portfolio. Pretty good, easy story. Sometimes I like to add those in there. Hey, it's just casual listening. It's not technical. And then why you should buy an annuity from me, talked about again, it goes back to all the annuity income options, how I lined it out. I'm not going to just show you a product until we have a strategy. And even then, I'm going to show you two different strategies, different products, guaranteed income. It's easy to find the highest payment.
That was a guy who got only index annuities with income writers. He came to me and said, hey, let's do a single premium immediate annuity. Look at that. Well, it was a 20% cost savings. He decided to put the same amount of money in, just get more income. Then he asked, why should I buy an annuity from you? And I said, well, because I went through all the different strategies and options, and you decided on this one instead of being the guy that just threw you an annuity. A lot of that comes from management. They want to manage the rest of the money. Hey, just buy this annuity, right? So there's a benefit from doing it here. Choosing the best fixed annuity, or miga, that's a really good one for people. A lot of what I did this year, just selling annuities to people that want to protect money and want to get a decent rate for a multiple number of years, that's a really good one to look at, because there's a lot of different features, contract features and whatnot. You can decide what kind of flexibility, what kind of free withdrawals you want, what kind of renewal terms you want at the end of the surrender schedule, all of those things. So that more or less wraps it up when an annuity is critical. That's a case study about a guy who decided not to buy it. He was at Fisher investments. He wants to take the risk, fine. I determined in his situation, he's got to have a piece of safety in there. But he chose somebody told him, nah, you're okay. I disagree, and I hope it works out for him. Or maybe he just bought it from somebody else, which should be a good thing, because I just want him to have a comfortable retirement, not have to sacrifice a standard of living because the market drops. Market's on a really nice rally toward the end of the year. It's not going to be there forever. So now we're basically flat for two years. So two years ago was January 2, all time high. We'll see what happens and we'll get John Ballmer's thoughts on it next week.
Now that only goes back to early November. And then what we did because we did the big rebuild with all the index annuity information. The last five or six podcasts have been videos for those pages. So that's where it ends again. I'm going to eat my words on the interest rates. I thought they were going to drop. I will do an update, but I've got to check with a couple of the people who know a lot of that stuff so I can get a pretty good idea of what to tell people. I'm going to wait until I feel like I got something worthwhile to say to tell you what I think rates are going to do in the next year and we'll make adjustments accordingly no matter how it goes. So anyway, I've been an awesome year. I've learned a lot. I got a lot from you guys. I certainly appreciate the opportunity to help. I appreciate your support and listening to this gives me energy, focus, and makes me a better advisor every day I do it.
I want to wish everyone a Merry Christmas. If you want to chat with me, top right corner of any page on annuitystraighttalk.com, schedule a call calendar. Is there anybody who's had a previous meeting with me? Just email me. I'm probably going to cut down the appointments just to make room for everybody. I don't need to have nine to five open every single day, but we'll see what happens. Anyway, please go ahead and like subscribe or comment on your favorite podcast platform or on YouTube. Share it with your friends. Heard a lot of people doing that. I thank you for doing it. A feedback I receive leads me to believe that a lot of people can use this information. You don't have to make an appointment. An annuity is not going to stick to you if you talk to me, but you can base your decisions off of this information and be an empowered consumer. That is exactly what this is all about.
So again, great to have you. Looking forward to another a great 2024. Best information, best strategies, best annuities, everything we got. I'm going to give you the best of everything I have and everything I've learned over 21 years.
Thanks so much. Enjoy Christmas holiday with your family and I will be back before New Year's with another episode. Okay guys, have a great day. Bye.
[00:30:30] Speaker B: You have been listening to annuity, straight talk the preceding information is for informational and educational purposes only and does not represent tax, legal, or investment advice.
Reviews expressed by guests on this program are their own and do not necessarily reflect the views of a nerdy straight talk or its partners.
No information presented today should be acted upon without meeting with a qualified and licensed professional.
It is important that you read all insurance contract disclosures carefully before making the purchase. Decision guarantees are based on the financial strength and claims.
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.
