Episode Transcript
[00:00:00] Speaker A: Hello and welcome everybody to the Annuity Straight Talk podcast, episode number 242.
My name is Brian Andersen, founder and creator of AnnuityStraightTalk.com and we got somebody in here from Iowa.
[00:00:13] Speaker B: Hey, good morning everyone. Nate Lee joining again. Thanks for having me, Brian.
[00:00:18] Speaker A: We got a new topic for you to do based on some of the changes we saw we've done to the website. Trying to make this a lot more user friendly, give you guys all the tools and information you need. Low pressure place to find the answers, get some clarity about your plan. So we're going to do rapid fire annuity questions. So Nate, like a few weeks ago we put live the chat bot, the AI version of me that answers your basic questions. Kind of directs you to make an appointment if you need a little more detailed answers. Right?
[00:00:50] Speaker B: Yeah. And you've gotten a ton of questions in a short amount of time, which is cool.
[00:00:55] Speaker A: And so what's interesting is what we decided to do is, and I would say like, honestly the, the chat box is working fairly well, but we can do, you know, a lot of other stuff. Like I think it needs to improve a touch. So we're going to continue working on that and we want to take the opportunity to do some rapid fire question and answer. Okay.
Like subscribe or comment and on any of your favorite platforms or on YouTube to schedule a call, hit the top right corner of any page on annuitystraighttalk.com Nate, should we get going with some rapid fire frequently asked questions?
[00:01:33] Speaker B: Let's do it.
[00:01:34] Speaker A: Okay, so the first one, and I got a whole list of these questions.
I don't have the answers to them, but we're going to answer them right out here. So I'm going to ask you the questions. You're going to do it. Okay. First one, what about riders that pay in case of a need for assistant live assisted living? What is your opinion?
[00:01:51] Speaker B: So I would say that depends on your situation. Like a lot of these questions. But what we've seen is the companies that do offer like a true long term care annuity, a lot of times you don't get the value out of them and the benefits aren't as, as good as you think. And then on the flip side, if you buy an income that has guarantee or, excuse me, an annuity with lifetime income, the guarantees are great but the like multiplier oftentimes, you know, doubling the payments only is for a, a period of time, usually five years, as long as there's cash value.
And so we tell people that should be secondary to the income. So I guess usually I would say the answer is no. The long term care policies and the benefits that are received, I don't usually see the value in there for most people.
[00:02:39] Speaker A: And that's why Nate and I did a podcast last time he was in Montana. We talked about those products specifically and kind of the idea was use it for income first. It could be a little bit of a benefit down the road. But do not use those products solely for the long term care benefit. Okay, so next question. Is Canvas safe for a five year myga? You know those guys that are trying to cut us out of the business?
[00:03:01] Speaker B: Yes. And the short answer is yes. Are they safe? Of course. There's a lot of good companies out there though that are offering annuities, including Mygas, Right. Just a multi year guaranteed annuity.
But if anything, what you and I have noticed from the chat bot and the questions we get all the time is that most people don't have all the information. They're not, you know, fully educated on annuities and how they work and ultimately where they fit in their retirement plan.
So why wouldn't you work with a professional, Right. Whether it's you and I or somebody else that can kind of help you navigate what the best fit is for you. Because there are differences with these products, whether it's withdrawal, flexibility, the duration, the guarantee. Right. What happens after the, the period is up. If it's a five year myga, then what?
There's all these different factors and things that you and I are always evaluating and considering to make sure it's suitable.
I just don't believe that going to Canvas is always your best bet. But I would argue it's probably a safe place.
[00:04:05] Speaker A: Right. And that's. It comes down to whether you want an advisor, you want someone to help you with it. Right. Because that's all they did. They eliminated the visor. You gotta wait in line on a phone call to get help with it. So
[00:04:15] Speaker B: one and one other thing, right. We get paid by the insurance company, that money doesn't come out of their pocket either way.
So if we can find them a better product than what Canvas is offering, I would want to go that route.
[00:04:27] Speaker A: Hey, but, but I'm just saying, like they're A minus, B plus, you know, so.
[00:04:30] Speaker B: Yeah,
[00:04:31] Speaker A: whatever. So it's not the strongest company. Heavily private, private equity influenced. But yeah, you know, probably safe and it's okay, but comes at a cost somewhere, right?
[00:04:40] Speaker B: Yeah. And I'd rather put my money with an A plus or an A plus plus. Rated carrier if given the option.
[00:04:46] Speaker A: Yeah, exactly. Okay, so next, one guy named Chris says, using your calculators, it appears the North American Income Pay Pro would provide what we're seeking for less money than Midland National. I'm not going to put the number in there.
However, we could start receiving payments from a Midland a year earlier. What about any fees associated with these products?
I want to be sure I'm comparing apples with apples.
[00:05:10] Speaker B: Excellent question. So, and this is something I'll let you highlight when it comes to the calculators and some of the things you've done to change and adjust. But face value, right? Just a guaranteed lifetime payout doesn't tell the whole story. Right? You and I did a podcast on this as well that, yeah, the guaranteed lifetime payout number is very important.
But then you got to consider, when do you get the payout? Right. If it's not immediate income, is it on a contract anniversary, or is it based on a birthday?
And then what are the fees?
Because if they're charging you a higher fee, it may not necessarily be the best value for you in your specific case. And so that is why you and I are always looking at each individual scenario, not only what's the best payout, but what's the best fit for their specific situation.
[00:05:59] Speaker A: And then explaining the fees and all that stuff. And we, like, we put the calculator in the illustrations. It talked about that already.
Where the illustrations will show the fees and how they differ between products. So if a residual value is important.
But that's an excellent example of a guy, we just need to have a quick conversation with him. And it's a little bit easier than writing a big, long email about how those are different and, you know, determine his situation to see which product would be better. Okay, are you ready for the next one?
[00:06:25] Speaker B: Yes, sir.
[00:06:26] Speaker A: Okay. An unnamed person said, I just switched my retirement savings of 1.2 million from 50 Fisher to some other company. We don't know what it's called because I didn't feel good about my retirement income. To meet my annual needs, the new guys put 700,000 out of 1.2 in Delaware life. That's aggressive growth. 10 fixed index annuity, 10% cap, 0% floor average, 7.33. That's hypothetical. Okay. Remaining remainders pump, Potomac Bear Fund. So the only thing I like like this, it's like, okay, fine, if you want to put that into the annuity, sounds like he needs guaranteed income. But they put him into a growth index annuity with, you know, an A minus carrier and are making a projection that may or may not last. Right.
[00:07:13] Speaker B: Yeah, that, that'd be my very first question is why Delaware Life? Right. What do they tell you? Because, I mean, again, it all comes down to the needs in your specific case and what you're trying to accomplish as far as, you know, your objectives in retirement. And from the sound of it, like you said, lifetime or guaranteed income would be more important and there's better options out there today than Delaware Life.
[00:07:38] Speaker A: And I like, I just, you know, I, I look at it and say, like, what are you giving up by going with an A plus company? Nothing. Right.
I mean, it's the same stuff. You get the same opportunity and then you get these big management firms that for whatever reason, they like a, you know, kind of a mediocre carrier, you know, I don't know, just kind of surprises me, these professionals that don't. I mean, I consider myself a professional because I take the top, the best companies and that's what I put my clients into. Right?
[00:08:07] Speaker B: Yeah. And I mean, you know, the diversification piece that they're mentioning, that is great. That's important. And you and I talk about that a lot. We can, you know, give countless examples of people where we tell them, don't put all your money into the annuities. Right.
Have some flexibility, give yourself some options as you move through retirement. But you know, again, that, that's definitely somebody that should probably give us a call and just have a conversation as to why it would make sense or why it wouldn't.
[00:08:34] Speaker A: Right. Okay. Yeah. Well, what's done is done. I hope it works out for you, honestly. Here we go. Dale asked what would be the best annuity for a Conservative couple retired 71 years old that needs to park some money just for monthly income?
I'm thinking I want the interest only for probably five years.
So
[00:08:52] Speaker B: that's an easy one.
[00:08:53] Speaker A: Yeah.
[00:08:54] Speaker B: With where MYGA rates are today, without a question. As long as that's going to give them enough income, I would tell them to do a five year myga, if that's the timeframe and just take the interest off of it. There's a lot of options that allow you to take out even up to 10% in the first year and definitely interest only on those different annuity contracts.
[00:09:15] Speaker A: All right, perfect. That, I mean, that's a simple and easy one. You know, that's a five minute phone call. Okay. And obviously if you're gonna buy the annuity, you gotta learn, you know, the little details about it. But there's no gotchas in those things, there's no fees. It's just guaranteed interest, strong company. We're seeing really good rates from some very, very solid carriers right now. So. Okay, you. You like this one, Nate? This was. Would an annuity be a good tool for leaving money to a child that does not manage their money well?
[00:09:39] Speaker B: So a couple of questions. First is, you know, how old is the child? You know, it does depend. An annuity usually isn't going to be the best place for a young person. When I say young, you know, under 20 type of a scenario. But let's say you have an adult who is in their, you know, 60s or 70s, and they have grown children, maybe in their 20s or even 30s, that either. Maybe a special needs or. Or they have concerns with spending it on. Could be anything. Right. A car, drug, gambling, whatever it is. Right.
And so it's something that we call control from the grave. Essentially, it works like a trust. But what makes the annuity a good place is that it avoids probate. And as long as you have your beneficiaries named, you can specify exactly how you want that money paid out when you die.
So the answer is, if you have three kids, two of them are doing great, but the third you have concerns about, you can put no restrictions on the first two beneficiaries, and on the third, you can specify and depending on the qualification of the asset, you know, have some options on how that'll get distributed to that child. And then therefore, they can't blow it all and get it all in the lump sum.
[00:10:53] Speaker A: Yeah. And that's a good example because I. I worked with three brothers, I don't know, probably seven or eight years ago, and that was exactly the case. The three brother brothers were splitting and, you know, 800 and some thousand dollars. And each of the brothers had a very different financial circumstances. Right. One didn't need it because he had plenty of money. One didn't want it because he was going to get denied federal benefits.
You know, the other one, I don't know, it was. It was weird, but you could. So they had to figure it out on their own. But, you know, mom who gave them the annuity could have, like, set that in place at the time when she bought the annuity and could have put those restrictions, those controls on there. Right?
[00:11:32] Speaker B: Yeah. And it's that peace of mind, too. Right. For mom and dad or whoever is leaving that legacy, just to know that, hey, when they're gone, you know, their legacy is intact and the money's going to get distributed to the way they wanted it, you know, to go.
[00:11:46] Speaker A: Right.
Okay, next question. I'm working with a professional. This is a guy named Edward. I'm not going to do last names. It's fine. Sometimes we get a name, sometimes you don't.
We're not bugging these people. They're just getting answers. And we're going to try to make sure that they're getting good answers and it works. Right. But he says, I'm working with a professional annuity guy and he thinks that Allianz Benefit Control Annuity is the best solution for my situations. Do you have some thoughts on their company and products?
Easy.
[00:12:16] Speaker B: Yeah. So, I mean, you and I, we've talked about Allianz quite
[00:12:19] Speaker A: a bit. That's a meatball. That's a meatball, man. Softball right down the middle.
[00:12:23] Speaker B: Right. Well, I don't know if I'm going to knock it out of the park, but I would say that more than any other company, you and I get questions about Allianz. And unfortunately, a lot of times these people already own these contracts. And then what we see is the performance rarely meets their expectations.
And so these professionals, right, as they call themselves, that are pushing these products, haven't necessarily done their homework and found the best fit.
And then a lot of times they realize after a few years, this contract isn't performing the way that, you know, I was told. And so, you know, big bonuses, lots of sizzle, as I like to say. But unfortunately,
[00:13:04] Speaker A: there
[00:13:04] Speaker B: isn't a lot of substance behind these contracts. And today there are way better options with guaranteed income that I would suggest over that. Allianz abc.
[00:13:14] Speaker A: Yeah. And the only thing I say is, like, if you think it's the best, prove it and show why you think it's the best. And when you go and look at, if you do what we're supposed to do and you compare it to a few other contracts that are in the same class of product, like, we don't know, maybe the guy needs to maximize income, then it's not the best, right. Maybe he wants fee free performance based income. And we can objectively tell you that no, there's better options, right? So I was always said, like, if, if it was as great as some of these guys make it seem, I'd be selling it right now. There's a reason I'm not.
[00:13:48] Speaker B: Well, yeah, and this is also another good point, right? This is why you have the calculators, right? On the, on the website, you can go to annuitiestraighttalk.com you can run numbers and see performance and then we'll explain the different products to you and why one may be better than the other. But unfortunately Allianz gets pushed more than probably any other carrier in the industry. And I honestly don't know why.
[00:14:13] Speaker A: Yeah, they just got a very aggressive marketing engine, so. All right, we got podcasts on that, you know, left and right. There's a bunch of stuff out there. Okay, next one. I am 77 years old and have 1 million in investments. Is it really a good idea for me to lock up my money for 10 years?
[00:14:29] Speaker B: Depends. What are you trying to do with your money? I would argue that, you know, for a 77 year old, going out 10 years isn't a big deal if it addresses, you know, your needs. And
[00:14:41] Speaker A: if you're conservative and you want the money protected and don't want to lose value. Sure.
[00:14:45] Speaker B: Well, yeah. And a portion of it. Right. I mean, maybe taking some of that money and guaranteeing some of it. And again, we can show all day long how owning an annuity as a part of your retirement portfolio takes pressure off some of those other assets and really will put you in a better position than by not owning the annuity.
[00:15:04] Speaker A: Right, right. And so that, that's one thing where by 77 years old you're going to know if you need to go like, say, obviously not the whole million, you know, part of it. Right. It'd be a good place because you should be in a more conservative position. So let's say 300,000 of it. Right. 30%. Okay.
I mean, if you think you need to go blow 300,000 within a few years, then no, it's not a great place to. You don't put money in the annuity. But by 77 years old, you kind of know what you need when you know what you're going to spend. And as long as the withdrawal privileges work in there, then, you know, if whatever you're allowed to take free per year works with the liquidity that you need, then it's a great place to put it into a myga, even an fia, if you want to take the shot at higher interest. Right. But I think a lot of those questions come from thinking that the money doesn't go away, it just goes into, into a different account. And if you're 77, you think you're not going to live 10 years.
Well, the surrender charges are waived and the full account value passes as a death benefit to your beneficiaries. Right, so.
[00:16:05] Speaker B: Exactly.
[00:16:06] Speaker A: No, there's nothing wrong with it, but you have to understand it. And it like you said it has to meet your goals, right?
[00:16:11] Speaker B: Well, yeah. And if they're conservative, a MYGA might make the most sense.
[00:16:17] Speaker A: Yeah, I think I usually, that's what I go to for, you know, people that are approaching 80. It's like Myga. It's easy done. Right.
Okay, next question. I have a sentinel insurance 5 year myga maturing 2029.
Should I pull out and pay the surrender fee or should I ride it out and hope they don't liquidate?
[00:16:35] Speaker B: Short answer is I'd probably leave my money where it is.
Long answer is we would need to know more. Right?
[00:16:41] Speaker A: Yeah. Get to 2029. Don't do that again, Right?
[00:16:44] Speaker B: Yeah, yeah.
[00:16:46] Speaker A: With sentinel, like, they're not, they're not broke, right?
[00:16:50] Speaker B: No,
[00:16:51] Speaker A: they're. They're still gonna. What's gonna happen if they liquidate? They're gonna sell off. You might get another company's wrapper on your annuity.
You know, they're fine. Like, the regulators don't like how they're managed, don't like some of the investments that are kind of riskier. They're, you know, blended the wrong way. Doesn't mean those assets lost value. But that's what they're gonna do is they're. You're essentially. They'll liquidate the company and probably sell it off to some other company.
[00:17:15] Speaker B: Yeah. And just like any other annuity, there are circumstances where it might make sense to replace it. It sounds like it's been enforced for a while. And so depending on what their objectives are, there may be a better solution for them. But that's definitely something you'd want to have to, you know, set in a meeting, give us a call, we can go through all that with you. But yeah, otherwise I would say, no, don't move it. Find a better option in three years.
[00:17:38] Speaker A: Yeah, exactly. So. Well, it's maybe two years. What? What?
In 2029, right.
I don't know.
[00:17:45] Speaker B: Yeah.
[00:17:45] Speaker A: Is it early or late?
So it could be two years away.
All right, we're doing one more. And then I think if we got a bunch of other ones and we, you know, we like to do this, we'll do. I'm going to do one more. Which is the most general of all. Right. That's a unique name. So I'm not going to say it, but what is the best plan to use with 600,000?
[00:18:01] Speaker B: The best plan?
[00:18:03] Speaker A: The impossible question to answer. Right.
Well, there's a lot of annuity guys that would come and be like, oh, but you buy this. Like, oh, go buy this 40% bonus or do this or do that. Right. But it depends on what are you trying to do.
[00:18:15] Speaker B: Well, yeah, and I mean, again, this is the difference between pushing a product and providing solutions based on needs.
And probably what I hear more than anything on these conversations with people all over the country is they don't know what they have or why they have it, and then ultimately what it's going to do or provide for them going into retirement. And so that's the biggest issue I have is, yeah, somebody shouldn't just be saying, yeah, go buy this annuity.
They should be explaining exactly what it's going to do for you and how it's going to meet your needs versus, yeah, just go invest 600k.
[00:18:50] Speaker A: Right. Well, and like, is. Is 600k? Is that everything you've got or is it a piece of what you have? Is that what you're thinking about putting into an annuity? Do you need income? What all the other questions. What purpose does it meet? Right. So anyway, so we're here, like, I don't know, Nate, you can talk about it a little bit, too. We're just here to answer questions for you. Don't need to sell an annuity to every single person. Got a couple meetings this week, and people that are very much in the exploring stage don't need pressure, just need education.
[00:19:19] Speaker B: Yeah. And just to, I guess, echo, what you've said is, you know, just based on the questions that you've received and the questions we get all the time, don't be afraid to reach out to us. We don't charge you to set a meeting, to have a phone call to answer questions.
We're happy to do it. Of course, we'd love to help you and work with you, but if nothing else, make sure you're getting a second opinion. And all these questions just make me feel like they're getting bad information.
Somebody is not telling the whole story.
[00:19:48] Speaker A: Well. And then there's a lot of guys out there being too aggressive and not really, like, covering their bases and, you know, laying that foundation first so people understand why they're doing it and what, you know, what, you know, what the purpose is so that they're happy a few years down there. We don't want to have contentious conversations with any of our clients three or four years down the road.
[00:20:07] Speaker B: Well, and this is why annuities get a bad name. They're sold incorrectly.
[00:20:12] Speaker A: Yep. You know that as well as anyone because you watch guys sell it for 20 years. Right.
[00:20:18] Speaker B: Well, sadly, oftentimes not the right way.
[00:20:21] Speaker A: Yeah.
[00:20:21] Speaker B: I know a lot of those, you know, advisors that were pushing products instead of providing solutions, which is part of the reason why I'm doing what I do today and why I work with you at Annuity Straight Talk. People need our help.
Don't be afraid to reach out and ask for it.
[00:20:35] Speaker A: Yep. So we're. We are here, guys. Nate, thanks so much for joining me today. We'll. I think we'll do this again. Cause it's kind of a good way to get a bunch of questions answered out there. What do you think?
[00:20:46] Speaker B: I think it's great. I mean, obviously the questions are out there. People, you know, we know there's a lot more of them that maybe haven't gotten on the website and use the chat bottom but would love to hear what people think if this is helpful. We definitely have podcasts, you've got newsletters. This is episode 242. So,
[00:21:04] Speaker A: yep, that is it.
[00:21:05] Speaker B: Use the website, Use the resources that you've got available to these people because the answers are in the information that you've already got on the website.
[00:21:12] Speaker A: Yeah, tons of stuff out there. So we're trying to get. Get this to the point where you guys have everything you could hope for on this website. So Nate's along for the ride. We're going to do everything we can to help you out. And we're available. So this has been episode 242, rapid fire question and answer on Annuities. Brian Anderson and Nate Lee signing off. Thanks so much for joining us. We will see you guys next week.
[00:21:34] Speaker B: Thanks, Brian.
[00:21:35] Speaker A: All right, see you. Bye.
