Moshe Milevsky: Learning from History with Annuities (TAM Classic)
“Fun With Annuities” The Annuity Man Podcast
Release Date: 12/05/2023
The Retirement Income Rule You Can’t Ignore: Shootin' It Straight With Stan
“Fun With Annuities” The Annuity Man Podcast
In this episode, The Annuity Man discussed: Preserving principal Matching products to time horizons Adapting to changing rates Prioritizing peace of mind Key Takeaways: The “never touch the principal” rule emphasizes generating retirement income from interest alone, keeping original capital intact for protection and legacy. CDs and treasuries are best for terms under three years, while MYGAs provide tax-deferral benefits and stronger returns for longer durations. High interest rates make this strategy attractive now, but if rates fall, retirees may need...
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Why the “Perfect Annuity” Is a Myth: Shootin' It Straight With Stan
“Fun With Annuities” The Annuity Man Podcast
In this episode, The Annuity Man discussed: Recognizing annuity trade-offs Focusing on contractual guarantees Asking the right questions Evaluating strength over sales pitches Key Takeaways: No annuity is perfect; each comes with both benefits and limitations. They should be understood as commodity products rather than flawless solutions. Annuities should always be purchased for their contractual promises, such as lifetime income or principal protection, rather than hypothetical returns. The key to choosing the right annuity is identifying what you want the...
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The Truth About Annuities | How Income & Guarantees Really Work
“Fun With Annuities” The Annuity Man Podcast
In this episode, The Annuity Man discussed: Annuities as lifetime income How annuities are priced Focus on contractual guarantees Two primary purposes of annuities Key Takeaways: Annuities, like Social Security or pensions, provide guaranteed income for life. They come in several forms, such as immediate, deferred, and longevity annuities, each designed to fit different timing and retirement needs. The pricing of annuities is based on life expectancy, interest rates, and insurer capacity. Because of these factors, annuity quotes change frequently, much like...
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Smart Annuity Income Planning Explained: Shootin' It Straight with Stan
“Fun With Annuities” The Annuity Man Podcast
In this episode, The Annuity Man discussed: The value of annuities for lifetime income planning Laddering strategy with annuities Placing an annuity inside a trust Key Takeaways: When it comes to planning for lifetime income, annuities can be a valuable tool. However, it's essential to approach annuities with strategies that allow for flexibility and the ability to adapt to changing circumstances. By purchasing multiple annuities with different start dates, you can create a steady stream of income that aligns with your needs over time. This...
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The 3 Annuity Strategies for Principal Protection: Shootin' It Straight with Stan
“Fun With Annuities” The Annuity Man Podcast
In this episode, The Annuity Man discussed: CDs and MYGAs I-bond no-brainer The safest product in principal protection How safe are MYGAs? Key Takeaways: Here’s how CDs (Certificate of Deposit) work: you give the bank money, they protect the principal, and you don’t have to pay any fees. You can take the interest if you want to at the end of the term, and do what you want with your money. MYGAs are basically the annuity industry’s version of a CD. Treasury bonds are a no-brainer. Go to treasurydirect.gov to buy them for yourself. The...
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Can Your Annuity Income Increase With Inflation?: Shootin' It Straight With Stan
“Fun With Annuities” The Annuity Man Podcast
In this episode, The Annuity Man discussed: Annuities that increase with inflation The role of interest rates in pricing For products that adjust for inflation Reverse-engineering your income floor Key Takeaways: Annuities don’t give things away for free. A product that magically increases with inflation doesn’t exist. Lifetime income is primarily priced based on your life expectancy at the time you take the payment. Interest rates play a minor role. For products that have a potential or contractual increase for inflation, the...
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How to Reverse Engineer Annuities to Fight Inflation: Shootin' It Straight With Stan
“Fun With Annuities” The Annuity Man Podcast
In this episode, The Annuity Man discussed: Products that adjust for inflation Thinking rationally about inflation Reverse-engineering annuity Key Takeaways: Many bad sales pitches out there mention a way to beat inflation using indexed products that adjust for inflation. What really happens is that the annuity company severely lowers the initial payment to make up for any potential increase. Think rationally about inflation. It’s customizable to everybody, meaning not everyone is affected the same way. Some are not even affected at...
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Searching for Growth or Guarantees? Shootin' It Straight With Stan
“Fun With Annuities” The Annuity Man Podcast
In this episode, The Annuity Man discussed: Threading the needle with volatility Freedom from volatility Annuities are the haystack Time to secure guarantees Key Takeaways: Threading the needle to get market returns makes you dependent upon so much unknown. You’re dependent on world markets, geopolitical events, and meltdowns that are impossible to predict. A lot of people can retire from their jobs and the market, and they should; those who can’t yet should make it a goal to do that and be free from being dependent on volatility. ...
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Don’t Fall for Hypothetical Annuity Returns: Shootin' It Straight With Stan
“Fun With Annuities” The Annuity Man Podcast
In this episode, The Annuity Man discussed: Annuities are contracts How Indexed Annuities Should Be Used Don’t buy an annuity for market returns Key Takeaways: To say that something is “guaranteed and backtested” means that there is nothing guaranteed at all. Annuities are contracts; buy them for what they will do and not what they might do. Indexed Annuities have the potential to go down in value, but they can be used as an efficient delivery system for guaranteed lifetime income through an income rider attachment. If you...
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Flexible Annuity Start Dates Explained: Shootin' It Straight With Stan
“Fun With Annuities” The Annuity Man Podcast
In this episode, The Annuity Man discussed: The four lifetime income products How annuities are priced The simplicity of SPIA Getting the highest guarantee Key Takeaways: There are four lifetime income products: Single Premium Immediate Annuities, Deferred Income Annuities, Qualified Longevity Annuity Contracts, and Income Riders that can be attached to Variable Annuities and Indexed Annuities. Annuities are priced primarily on your life expectancy at the time you start the payment. Interest rates play a secondary role. Deferred...
info_outlineIn case you missed it, I have decided to circle back to one of my Fun With Annuities episodes that just cannot be missed. This one has annuity gold, and it is definitely a must-listen.
In this episode, The Annuity Man and Moshe Milevsky discuss:
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The problem with annuities
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What’s a tontine?
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How income increases with tontines
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The gap between healthspan and lifespan
Key Takeaways:
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The point of annuities is to generate predictable income even when you can no longer make decisions yourself due to cognitive decline. That’s why agents have to make sure the clients understand and continue to understand what they are buying and what contractual guarantees they have in place.
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A tontine is one of the many strategies people use to finance themselves in retirement in which the longest-living people get the most income while the people who didn’t live a long time get a smaller amount of income.
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Tontines increase the income for all living people involved as time passes because the same income amount is being split within a group that gets smaller as members pass away. The mortality rate becomes a real interest rate - this is most interesting in the current inflationary times.
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Money alone doesn’t solve your problems; just throwing money at a problem won’t make it go away. You need to do something with it to solve your problems, and one of the biggest problems in aging is the gap between health span and lifespan.
"When you have a product that is meant to help people that are eventually going to cognitively decline, there's a higher burden of care there because you got to make sure that they understand what they're buying and they continue to understand what they're buying. " — Moshe Milevsky.
Connect with Moshe Milevsky:
Website: https://moshemilevsky.com/
Twitter: https://twitter.com/RetirementQuant
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Email: [email protected]
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