Current Annuity Market Conditions | 7 Figure Annuity Sales Podcast | Ep. 293

Well, when it comes to current annuity market conditions, rates are holding, but products are enhancing. Welcome back to the Seven Figure Annuity Sales. It's Caleb north here with Chad. Chad, I'm looking good.

I am. What is wrong with you? You never compliment me on things. Hey, but that's because your camera's turned off.

You can't even see me. That's the best you've ever looked, man.

Hey, for. For all the listeners, you guys can go to the YouTube 7 figure annuity sales, the. The annuity sales coach, and see how good or not good Chad and I are looking today.

But anyhow, well, you still got your hat on, which I don't know why you always. You're going to be a bald man at, like, 22 years old. So, I mean, so, like, in 10 years, you're going to be bald.

Yeah. Okay, get this. I went and got my haircut today on my lunch break for these podcasts.

Huh?

Because we. We do. We record video for the YouTube and everything.

And you're wearing your hat.

It is the worst haircut that I've had in years. So I put my hat on. Oh, it would have been better had I just not even gotten my haircut at all.

I. I need. I need. Oh, I need to see that. Oh, my gosh. I could make so much fun with that.

Oh, you would have a blast with it.

Let's. Let's get to something more important, which is anything other than you, so.

Well, that's true.

You know what I'm telling you, people are gonna just come after me with pitchforks. Your little army is gonna come and they're just gonna kill me.

Okay.

The thing that came to mind. Golly, we'll get into the good content here in a second. But the thing that came to mind when you said that Chad was Shrek, when they all, like, storm into the swamp with their pitchforks and the.

The torches and everything is like, I imagine you as Shrek.

Whoa, whoa. Okay, that's. That's a little unnecessary and mean.

Yeah, I just wanted.

Yeah, okay, go ahead.

But rates are. They are. They've. They've held. Honestly, I'll be real. Rates have held longer than I thought they would have so far this year. When the Fed announced earlier that there were going to be rate drops this year, I didn't think we'd be so here in April, still waiting for the Fed rate to actually drop. It's holding. And annuity rates have held. I mean, you've had some carriers drop a little bit, some carriers actually increasing Rates, but by and large, they've, they've held pretty steady all year so far.

Well, and actually I totally expected that. I mean, whenever the Fed announces something, you know it's never going to get done. So I mean, I mean, that hurry up and wait. Yeah. Does not. Well, it's not hurry. It's hurry up and never. You know, it's like they haven't added their pork fat onto it and, or anything. So I mean, when it comes down to it, anytime the Fed said something, it just blows me away of the, the complacency and the lack of urgency and the, the, the just being in touch with the common person because, you know, you can sit there and say, well, it's good that interest rates stay up because you have, you know, know your high yield savings accounts and everything's starting to pay more. Which for people who are in a good financial situation have a lot of meaning cash, then, yeah, that's a great thing. But that is not the case for so many people. I just saw this study that it was 43% of people 55 and over don't even have enough to handle $1,000 emergency. $1,000 emergency. And so if that's the case, and then we already know, I mean, these are statistics that are thrown all over the place. And some of them, I believe, are pretty close. Some of them I'm not sure. But I know when people call on my radio show, about 50% of the people call in there are 55 years old thinking of starting retirement. I know that I get quite a few people that call in and say they're in their mid-80s, running out of money. So I mean, a whole bunch of people sitting there saying, well, it's good that the interest rates are high because we get higher rates on the money that we have in the bank. There are a lot of people right now that do not have money in the bank.

Right.

So, I mean, what good does that extra interest rate do if you don't have the money there to make the money? And then I also run into scenarios right now where there's still the people that do have their money in the market. This just blows me away. They sit there, I've done so well the past 10 years, with the exception of, of course, 2022, you know, or even 2018 a little bit beginning of 2020. But they say, oh, I've done so well the past 10 years. But then they still want to stay in the market even though they think their money's at risk, even though they don't feel comfortable with where the economy is. There's. I just had a guy today and I can't fathom it. He has $9 million and he wants to stay all in the market where he is. And I'm going, why wouldn't you at least take a portion of that and protect it? I mean even if, yeah, you may have your high yield savings account, you may have some Treasuries, you may have all that, but nothing has the guaranteed income for life. I actually posted that on LinkedIn the other day and basically, you know, nobody rebutted. I said, find me a product that offers what I'm talking about, which is an indexed annuity with an income rider that has the guaranteed protection for principal due to market volatility and the guaranteed of income for life. So it goes back to the same thing. Nobody could answer that question. But then I always go to the question what's more important during retirement? How much you make or how much you take. So to me, I would probably be focusing more on the payout percentage, obviously the bonus plus the roll up rate plus the index plus the payout percentage. But I'd be focusing more on that than the actual interest rate I'm getting, even if the interest rates are holding good. And I actually just got off the phone right before we jumped onto this, a client that has a million dollars that I wrote probably 300,000, 4,000 about eight years ago. And I said, what are you guys doing with that million dollars? And he said, you know what, we don't know. I said, have you ever thought about more annuities? And they're like, I don't know. And I said think about where you are. And I went back to the products they got eight years ago. And I said, here's what your account value is, here was what your benefit base is, here's what your income for life is. And they have a good gap. I mean they have about seven year gap in between. Actually it's eight year gap between their ages and, and still the payout percentage was really high. So I mean I think we, we as agents, we have to really focus on trying to reprogram the thought process of our retirees. Because if you think about it, none of them have really had a significant pain during their retirement area. With the exception 2022, a lot of people got hit pretty hard there. But then 2023 unjustifiably and with no logic or reason increased. They don't know what it's like to be from the 50% loss that we saw 2000-2003-2007-2009. And if, if they're 65 years old, that's back when they're 55. Actually longer than that now, because we're talking, oh, man, that is now 16, 15 years ago since they had that. So if they're 65 now, they would have been 50. They don't even remember the pain that would have cost because now at that time, they probably weren't thinking much about retirement. So we really need to focus as agents. The interest rates have been good. They've been holding steady, but that is not the primary focal point. You know, I'll argue with people all day long. 90% of clients need an income plan, and I'll debate all day long with it. And when I talk to agents all the time. No, they don't. No, they don't. Fine. Fine, I say. Okay, so tell me the questions you ask. Asked them. Well, I made sure they didn't want to have, you know, any market losses. How was their income? Oh, income was great. Well, what happens if one of them passes away? Oh, I didn't talk about that. You know what happens when they are set at a certain level? They might be on some pension fund that actually only increases by 2% per year. It doesn't have a true CPI increase or cost of living increase because it's not attached to the property proper index for inflation. So if that's the case, what doesn't matter as far as the interest rate? If you're not talking income?

Right.

You know, you sit there and you get a million dollars and it's a plan for living or a plan for dying, it goes. And I know we're talking about interest rates, but I think people focus way too much on that. The fixed rates have been pretty steady, right? I mean, they've been pretty good. But what is the purpose of the money? And anytime you ask a question, I could be a variable person right now, and I could be the best variable person ever because I could sell against indexed annuities all day long. Why? I've been sales for 32 years.

Yep.

You know, so I mean, you just have to do what's best for the client. So.

I agree. When you, you mentioned that $9 million client that you talked to, for example, and he's kind of hung up on staying in the market. You know, one of the things that I think that agents could stand to improve in is exactly what you said, Chad. Asking questions. You know, most people think you, you, you ask the question, is it more important what you make or what you take, right? What, what is the most important thing in retirement? Right? What you make or what you take? Well, most people, it would seem to me, because they don't fundamentally understand how income riders work in indexed annuities, how guaranteed lifetime income works in any type of annuity. So they, they synonymize what they make with what they take. So a lot of people come into these conversations with the Ms. The just the misplaced idea, the incorrect notion that, well, I have to make more so that I can take more. And then agents will approach that conversation with their clients and ask them, so, you know what, what are we looking to do here? Are we looking to protect it and try and accumulate funds, or are you wanting income? And they position that question incorrectly. Because again, you haven't even addressed the way that income functions. You have, Chad, but most agents haven't, I guess is a better way to say that you go into it. Yeah, if you go into it asking accumulation versus income. And I, I feel like I talk about this all the time. Most people are going to say, oh yeah, I need to accumulate because their mind is thinking I need to make so that I can take. But the end there is that they take. That's the goal, that's the purpose, that's what it's supposed to do. So then if you go in and you actually are talking about guaranteed lifetime income, most of the time that actually addresses what they want the annuity to do. It just does it in a way that they didn't know could happen.

So I've been starting to do this in this, I don't know, I mean, you and I talk a lot together. But I think there's only a few months ago I started what's more important, how much you make or how much you take? And so just recently though, they said, well, how much can I make on this? I said, isn't the question actually how much can you take from it? And their brain short circuits because nobody asks that.

Right.

I mean, if you think about that, nobody asks that you go to a broker. They're not going to encourage you to say how much can you take from it?

Right.

I'm actually onto something here. I think you want something. I really am.

And it's actually, that's perfectly in line with something I heard the old great Tom Hegna. I saw a short little video of Tom talking about and he was primarily addressing like tax, tax things. Right. And I think that the underlying message that he was trying to communicate was the impact of tax free accounts like Roths. And things. And again, that's, that's kind of hit or miss. You get a retiree and. And you may or may not actually be better off doing a Roth conversion. It's very much a case by case basis. It is. You're an agent out there that is just always pushing Roth conversions. Recognize that's not necessarily always the best. I've actually talked with a CPA about the concept of full Roth conversions before. And one of his biggest things that he advocates is what's called tax smoothing, which is essentially distributing the tax liability out over a longer period of time, but doing it with a lower tax bracket so you end up long term actually paying less in taxes anyways. That's kind of his thought process and approach. But Tom was talking about, you know, you meet with a client and they've got a million $401k, and you ask them how much of that is yours? And they're like, well, what do you mean? How much of that is mine? All million of that is mine. He goes, no, it's not. Yeah, it is. No, it's not. Because the government hasn't gotten their share of it yet. How much of that is yours? Like, well, right now. Xyz. That's right now. What is it next year? What is it in five years? What is it in 10 years? You don't know. So not only do you not know the value of that account because it's left at risk. Simultaneously, you don't know how much of that account is actually your portion to take after the government gets their share of it. So who came up.

What's that?

Who came up with that question?

How much of that is yours? Yeah, I, I heard it from Tom. I saw it on a. Tom Hagna. I heard it on a, on a reel. It was just a social. I was thinking 10 second video.

Caleb couldn't come up with that. There's no way.

That is really stinking good.

Yeah.

How much of that is yours? Yeah, because. Well, it's all mine. Okay, so out of that million, how much is yours? All 1 million. No. What if the stock market loses 10% in the next few weeks? You know? Well. Well, then it's not all yours. God, that's brilliant. That's brilliant. And then you add, how much do you make? Or how much do you take? I mean, see, this is the beauty of what we do. We start doing these conversations and these podcasts and we start sharing information. I mean, that's what our whole academy is built around, right?

Yeah.

You know, the whole architects is Literally sharing everything from four different experts. You know, it's you, me, Jesse and Josh. And we're just spilling our guts on everything that works in the business.

Right.

And I tell people, find me any college course that's going to have this type of material with someone that's actually in the field, that's going to cost you $197 a month. Mean.

And you're right. And on top of that, Chad, if I can real quick, when we do our monthly live mentor or actually weekly now we have, we have guys on those calls that literally were selling. They've been in the industry long enough that they were selling the very first indexed annuity that ever came to market. And simultaneously we've got guys on those calls that just this past month finished their first month and did north of a million dollars in premium in their first month. So you get guys, did that one.

Guy do like 1.3 million or something virtually over the past month, all virtually.

Brand new in his first month?

Yeah, stuff, I love stuff like that. I mean, you know me, I'm not in competition with anybody. I love it when people are industry thrive. That's why we do what we do. I mean you, you, you're basically. And I'm not just pitching the course right now, I'm pitching growth. I'm, I'm pitching, you know, you need to become better. And we go into complete detail on everything we do and how do. Man, I hate saying this, but what is it? Agents retirement. Agents retirement. Realize.com. yeah. Agents.retirementrealize.com and that's a dot like little period. Not dot.

That's right, that's right.

So it's like it's not a pound on the phone, it's a hashtag. So that's true. That's what happens when you get older. You start to say things that are irrelevant.

Yeah, Pound sign. Yeah, Pound sign.

Absolutely.

One of the other. Oh, sorry, go ahead.

No, go ahead.

I was just going to say one of the other things that I've, I've seen as of late is some product enhancements. EquiTrust just updated their Market 7, which is great if you haven't looked at it. Go check it out. Lincoln Financial added some new strategies to their opticalnd product, which is really stinking cool. Some completely new index strategies that I've never even seen before.

You said check it out. I mean really, they should probably set up a business development plan with you or something.

Reach out to me, we can talk through it.

Yeah, because I'm telling you after you telling Me how insurance companies are encouraged to funnel into one particular particular indice because they, you know, that's part of the deal. I, I now am even more skeptical than I ever been.

And yeah, they want you to, they want you to allocate to a bunch of different crediting methods and different strategies because they go with these index providers, S and P.

Barclays, you know what, whoever that cibc, all these different investment banks and index providers, they go into those with like hey, we're going to give you X amount of premium allocated to this index now let's partner on this index type.

So you can't trust necessarily where it's going. Yeah, I'm telling you this is why we are going to be the best FMO out there. Retirement Realized financial is going to be the best because we're not funneling indexes, we're not funneling products, we're not taking you on some sort of awards event and partying with you till you get drunk out of your mind that you can't even walk to room. You know, I mean there's just so many things. I'm loving what we're doing so much. You know, I think we're going to be the first, we do an event. I think we need to be the first non alcoholic event to where if people want to get it, they can get it. But I know there's so many agents out there that don't come to these events because they don't like the environment that they're exposed to or their family's exposed to. So I mean, I know that's the case for me. I mean I, you know a lot of events I've been to that have been done very, very well but there's almost always 20% of the people that, including some of the marketers and some of the, you know, people at the company high up that are wasted out of their mind and you're just going why are you doing that? I know that's a tangent but you know what, we're doing something different. So if you need help from Caleb, you know, you want to know which indices are best out there. We do have some good rates right now, but remember it's not how much you make, it's how much you take. So that's what I want to leave you with. So I hope that help you, hope, hope that help you, hope that helps you and have a great day and of course happy selling.

Ra.