The Time to Buy is Now

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 62. Brian Anderson, come to you from Western Montana. Beautiful fall day men. The weather has been exceptional and we really enjoyed some nice weather. It's gonna turn quick and probably we'll get three feet of snow and sub-zero temperatures any day now. But as you can see, the sun is shining behind me. The fall colors were a little bit late cause it's been so warm. I've never actually seen it happen this much. We're getting the colors in and it is absolutely gorgeous. You guys are gonna be seeing this toward the end of October. I think of the 29th is when it comes out and I'm getting ready to take some friends on a hunting trip. You guys know I already did that, but I like to do a lot of it. So I'm gonna keep going. Speaker 2 00:01:27 Get the animals out in the woods for the last, last time this year and go enjoy and relax in a beautiful spot meeting. I've got a new client from Louisiana who is gonna join me for a day ride. One of the things we have in common is he happened to have been hunting the same area that I have for years and it's pretty cool. When I met him, I knew exactly where I said I, I told him, I said, You know what's funny is I probably have looked at you through a rifle scope on numerous occasions. So we found out, or even our dates matched up. It's like, Oh yeah, I was there. Yeah, so was I. Anyway, kind of a funny story that he gets it. I guess it's not maybe worth explaining to everybody anyhow, but I'm, I'm looking at the market that's going on and of course last week John and I did a market analysis, talked about stocks and bonds and what's going on in the market today. Speaker 2 00:02:10 And it's one of those things where after doing that I look at it and think, man, this stuff is so simple and I give you all the information. I give you all the ideas and I'm gonna be as about as salesy as I'm ever gonna get. And so I wanted to do this episode easy to do and say, You know what? If you've ever thought about buying an annuity, buy one now. Now is the time. And there are a lot of different reasons for that. Not the least of which is that every other asset in the world is losing money. Docs are down, bonds are down. Anyway, so I wrote a newsletter, the newsletters out there. It's a quick read if you don't wanna watch this whole podcast, I'm gonna, I usually try to go into more detail here. I'm not gonna share my screen because, well that's just words. Speaker 2 00:02:49 Uh, sometimes I'll do it, sometimes I won't. But I'm gonna say interest rate, like we have available, they have not been around since early 2009. That was the early days of annuity straight talk. I had been in the business for six going on seven years and I started the website and everybody that wants to go back and say how I learned about annuities, my annuity evolution, I think it was probably January of 2021 is when I let put out a series of newsletters. I talk about when I had started this website, I said it a bunch of times, if you don't know, fixed annuities were my jam. They were better than anything else. Index annuities were relatively new, weren't that used that much. And when I, the first in fixed annuities, I sold early in my career, 19 plus years ago, were fixed annuities, guaranteed 7% payout four, 10 years. Speaker 2 00:03:35 And nobody wanted them because, well it was.com, the market, Oh it's gonna come back, it's gonna do this, it's gonna do that. Well that's why I focused in retirement because I saw this underserved asset class that was out there and thought, man, there's a reason why a lot of people need these things. Okay, well 2009 comes out. Annuity straight talk was all about just use the simple fixed annuity. Just use the simple version. If rates would've held from the time I started this website, then I'd probably have three or four, maybe five pages every, there are people that are like annuity rate shopping websites. I probably would be doing something like that. Cause I was like, that's just obvious. Here's the reason why rates dropped and things got technical. I had to work and figure things out. I survived in this business cause I worked really hard and also because I found different ways of accomplishing retirement goals even when rates weren't high. Speaker 2 00:04:28 So we've got a lot of people through some of those challenging times. And I'm not gonna say these days, it's obviously we have challenging times, but you have so much more to work with than you would've had 7, 8, 9 years ago. So products and strategies have to change because the market changes over time. And now we've got something different. And again, people say what? What's the flex strategy? The flexibility approach. Flexibility is key. So after I started the website in 2009, rates just kind of kept going down for almost 10 years, jumped a bit in 2018, then they dropped right back down C lockdowns, all that garbage that happen and now we're finally seeing safe money rates move well past 4%. And a lot of people have gotten in on that this year. I'm not saying that I haven't been, I have been busy, but if you're waiting for a time, now is the time. Speaker 2 00:05:13 Last time I saw 4% on a fixed annuity was probably 20 10, 11, maybe 12. Nobody wanted it. It's not high enough. Then from the time it disappeared until it came back, everybody's like, All I want is 4%, All I want is 4%. Well we got 4%, we got higher than 4% now maybe going higher now they're like Ah, that's not enough. And that's where human behavior's really funny cuz that entire time people have been telling me that's all they want. And here it is, come get it. It's time. And unfortunately the best time to buy is often when no one wants to. 2018 was a great time to buy annuities, but you know the market had been running, it dropped back a little bit in 18 and nobody wanted, they wanna stay in the market that was paid off in 19 and 20. There's a blip in 2020, right? Speaker 2 00:06:02 So last week John and I re released a podcast analyzed the stock and bond markets in the past year. Both are down substantially. Without question everything I've said on this website, everything I've talked about for the past 10 years, 12 years, everything I've been working toward in my career is coming to fruition right now. And I'm not gonna say I told you so that's not the point, but I've been talking about issues with bonds for a long time, right? I wanna say 20 13, 14 was the first time I said bonds plus index annuities are bonds plus fixed annuities. Bonds plus the insurance company owns the bonds, the back your contract plus you get reserves on top of it. Why would you not own an annuity if you want to own a bond? Now some people have bonds. I've run into a lot of people, bonds are down, you know, 15, 20% this year. Speaker 2 00:06:47 The US bond index, the last week in the podcast I quoted was 14.98% was where it's at. If you're in a bond, do not sell it and take that loss. Typically your coupon payment's gonna continue to roll. You'll get your principal back when it matures. Okay? If you have a traditional portfolio right now equity stocks are equities and bonds, you're in a tough spot. Your advisor, whoever told you to put it in there has some explaining to you. That's Smart Money Magazine. That's Forbes, that's Wall Street Journal, that's Barons. Everybody that said you could retire on a stock and bond portfolio has got their foot in their mouth right now and I've been telling you not to do it that way for a long, long time. Some people use annuities to improve a safe allocation, right? That's like it's a little bit better than bonds, it's not interest rate sensitive. Speaker 2 00:07:36 There's more liquidity going to that liquidity free from interest rate risk. That's the challenge right now with bonds down and value, yes they pay their coupon payment, but what you want in that safe allocation is you want the ability to draw some more, more money out of it. If you gotta take an RMD or an income from that, you wanna take some more out of the bonds because you can't take it outta your stocks right now those things lost so much money. But if you pull more than the coupon, if you sell your bond, you're gonna take a loss on that as well. It's a double whammy for retirement and it's silly. Now if rates turn around, bonds will bump in value. But again, you're just, you're volatile with those, you know, with that allocation. So no matter why you wanna buy it, if you know if you're improving safe allocations or just avoiding market volatility and annuity would would've saved you a lot of money in the past year. Speaker 2 00:08:24 So anybody who bought an annuity last year may have locked in a lower rate but they did it with more money. Now a lot of people have less money so they wanna wait for it to recover before committing to a guarantee, a fixed interest rate or an income payment, whatever it is. I know so many people who have been waiting for more than 10 years or they said, Oh I'll just do a one year cd, then another one year cd, then another one year cd and it keeps going. They get to the point where, you know, four, four and a half, 5% even right now and they're like, Ah, well I'm gonna wait a little bit longer. You've waited long enough. So here's my interesting example for the day. Let's say you had a hundred bucks last year and you could have locked in a long term rate of 2%. Speaker 2 00:09:06 So five to 10 years you could outta 2% base rate or you could've waited a year lost 20% and invested $80 today at 4%. So there's a difference between last year and this year. Now I'm not quoting specific rates, but that's roughly accurate. I'm not a rate shopping website. They change all the time. And I'm not here to tell you what the best rate is cause I'm recording this 10 days before it comes out. That's gonna change. But here's the lesson. Would you rather have a hundred dollars at 2% or $80 at 4%? Which is the better deal in the long run? Okay, the $80 and four at 4% takes 12 years for the lower investment and higher rate to catch up in terms of total account value. You don't have money, more money for 12 years inflation, anyone. These are the things you have to start connecting and I'll get back to that a little bit later. Speaker 2 00:09:55 The most important thing about making money is not losing it before you get going. So take it one step further. Let's assume it's typical stock portfolio over the past 20 years. Oh what did I, hold on a second before I did that, I also did, I wonder if I still have it up here? I do. I'm gonna look at it. If you were taking a $4,000 withdrawal, the 2% versus 4%, then it takes, did they even put that in the newsletter? I might have to do that if you, Oh yeah, I did it right here. If you're taking income, the the two don't come close to even in the out until after 17 years. So if you're pulling money out of a portfolio, that's 2% on a hundred dollars or 4% on $80. If you're taking a $4 withdrawal, that's 4% of the account value and we use a hundred thousand or a million or whatever. Speaker 2 00:10:42 But just the numbers, then the 4% at the lower, at the 4% on the lower amount of $80 does not catch up in total remainder until year 17. So that whole time, you know, for a lot of people that's a retirement. You retire at 65, 70, you know you're early to mid late eighties by the time it actually catches up. And then go one step further and you talk about a typical stock portfolio over the past 20 years with the same withdrawal. So a hundred bucks in taking out $4 a year, 4% of it, it's a million. Taking up 4,000 or a hundred thousand taken 4,000. If you had half the money in in an annuity and half the money in the market, you'd have about the same amount remaining as as if you had had it all invested in the market. The amu, the annuity decreases one key to making money, inflation accumulation income, all that stuff is don't lose money. Speaker 2 00:11:39 So half annuity, half market versus all market, they're about the same after 20 years. If you have an investment manager for the market, you've got fees, right? So that's even worse. But it's so obvious to me where it's like nothing's gonna change. You put 4%, 5% on half your portfolio, you're gonna end up better after 20 years. What do we have in the stock market over the past 20 years? It was amazing and you could have had half of it in a 4% annuity and done the same. So you got half the risk, half the fees if you're paying an investment manager, right? It's so dang obvious to me. I can't believe it and kudos to anybody who's already figured it out. Thank you to my clients, I love you all. But I'm trying to open everybody's eyes a little bit and say, you know what, four percent's not bad. Speaker 2 00:12:28 It's the up and the down and I think we're gonna see a lot of it. So this is where like the inflation discussion is very, very interesting to me because everybody wants an interest rate that beats inflation. Oh 5%, well inflation's 8%, okay? I would take 5% guarantee in an environment of 8% inflation over losing 25% in the stock market. And I think there's a rally today goes up and it gives it back. That's what you're gonna see. You're just gonna see a lot of ups and downs. So if you wanna stay in the market, I, you know, suggest you go get a vacation rental in the Caribbean and relax for a little while cuz I wouldn't watch it. You'll just up one day and down the next. So yeah, for inflation, yeah the fixed interest rate's not gonna beat the rate of inflation, but neither is losing a pile of money in the stock market. Speaker 2 00:13:16 I think the lesson I've learned is like when annuities are the best, nobody wants 'em. Nobody wanted 'em. Earlier this year when the stock market was at the high, I think for the past, you know, 18 months prior I told people, be careful, we're gonna hit a top here, right? We're gonna hit a top. You want to take, go back to what, I don't know, six, seven episodes go Vegas. Odds of stock market and annuities. What did I say? You take your winnings off the table and put 'em in your back pocket. That's the same thing. So to me it makes a lot of sense. You could have bought last year and other people was like, Oh I don't want 2%. It's like, well yeah, but you would've saved 20. And I think I told everybody this before, you know, one client who put a chunk of money into an index annuity last year, I don't know, he made like half a percent on it and we had a meeting, he called me and he said, Man, I just made 16% so you you, you're looking at something different than I am. Speaker 2 00:14:06 He's like, well everything else I have was down 16%. That was in June. It's even worse now. So now last year would've been fine cuz you would've saved a lot of money. This year's good. But it's hard. I mean I'm not saying sell losses of course cuz I can't predict like greater losses if you don't do it. But a lot of people sat in cash for the last few years. This is the time to do it. If you're waiting for a fixed rate now, like now they're getting close to five and they say, Oh, I want six and I had people that bought four, six months ago and they're fine, I'm gonna do that where it's like it takes 4% six months ago, they've already made 2% on their account this year. It'll take a period of years to catch up to that 5% by waiting. Speaker 2 00:14:46 So that's the cost to wait and I'm gonna cover that May, I don't know if it's the next one but probably, probably should be anyway. It has been almost 11 months since the stock market hit. Its all time high on January 2nd. Since then we've seen dramatic reductions in asset values for both safe and risk based assets. It is now clear that annuities belong in a retirement portfolio. There is no question anybody who says they don't does not know what they're talking about. It's called confirmation bias. They're so biased to the way they do things that they cannot possibly see the alternative. And I'm not saying all of it. No, not at all. I mean, and I've done this, what's the right amount? It depends on what you spend, you what's like your risk tolerance, all those things. There is no question they're better asset now we have the rates that everybody's wanted for 10 years bang time to do it. Speaker 2 00:15:32 If it's not now, then when are you gonna do it? Good question, right? Anyway, so I appreciate you guys tolerating my rant about annuities. Get one. If you don't have one, buy another one. If you don't want risk, of course it goes through a suitability process and planning process. See how it works for you. I'm not blanket saying everyone should have one, but I do believe 99% of the retirees I have met should have an annuity of some sort in their portfolio. It will improve things at the very least, keep things the same. And it makes times like this a lot more tolerable. You know, in times like this, I love the stacks of silver in the closet and money in the bank, right? Well, I don't have to worry about what's going on in the market. So anyway, episodes 62, the time to buy is now. Speaker 2 00:16:13 My name's Brian Anderson. You can schedule a call, uh, the top right corner of any page on the website, annuity straight talk.com. Founder, creator, writer, everything, all mine, read it all. Challenge me. Go ahead, put pressure on me. I've been under pressure. I can handle it and I can explain it. There are lots of caveats and details and different things. I'm an obsessive thinker. I can handle it. So hit me with whatever you want. My number is 804 3 8 5 1 2 1. You can give me a call, I'll answer it. Sometimes I'm out this time of year. I go out for, you know, three, four days at a time. Go straight to voicemail, leave me a message and I'll uh, I'll call you back as soon as I can. So not a big deal. Easy to get ahold of me again. Episode 62, the time to buy is now. Thank you so much for joining me. My name is Brian Anderson. Looking forward to speaking with you next week. You guys all have a great day. Okay, thank you. Bye. Speaker 1 00:17:15 You have been listening to annuity straight talk. The preceding information is for information and educational purposes only, does not represent tax legal investment advice. The views expressed by guests on this program are their own and do not necessarily reflect the view on the ministry talk or his partners. No information presented today should be acted upon without meeting with. It is important that all insurance closures carefully before a purchase. 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