In this episode, The Annuity Man discussed:

• Annuities have a lot of types
• Protecting the principal
• Buying an annuity can be your last resort
• You need a contractual guarantee

Key Takeaways:

• There are many types of annuities. There are Multi-Year Guarantee Annuities which is the industry's version of a CD. There are indexed annuities, variable annuities, Deferred Income Annuities, Qualified Longevity Annuity Contracts, and Single Premium Immediate Annuities. There are also buffer annuities, income rider attachments, and all kinds of different machinations out there.
• Interest rates have reached a point where you can buy a fixed-rate annuity, CDs, or whatever gives a fair interest rate. If you have enough money, you can just protect the principal and peel off the interest rate from that guarantee without touching the principal.
• If you've got a large enough lump sum that you can peel off the interest and live off that, then you don't need an annuity. It can remain as a last resort if the markets go drastically downward.
• When you're doing principal protection, peeling off the interest, you need a contractual guarantee. Index annuities are used primarily as a very efficient and cost-effective delivery system for income riders for future income needs, but they don't guarantee a return.

"Buying an immediate annuity, or buying a deferred income annuity, might be a last resort if you can live off the interest from the principle that you have." — Stan The Annuity Man.

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