Why YOU Should Use Income Riders | 7 Figure Annuity Sales Podcast | Ep. 174

Today we're going to talk about why it's so important to use income riders, if income is even remotely involved.

Hey, everyone, welcome to Seven Figure Annuity Sales Coach Expert. What are we doing here?

It's like seven figure. Go ahead, Caleb.

What are we doing? Seven Figure Annuity Sales Podcast. It's funny.

Yeah, they can't come up with a short name for this. They're wanting this long, drawn out name.

It was the Annuity Sales Coach podcast and 7 figure annuity sales Podcast.

It's how to sell more annuities podcast.

That's really what it is.

That's really what it comes down. You know what, for the next. Oh yeah, you're going to interrupt me, weren't you already? So for the next three or four podcasts, I'm going to be wearing this shirt and it's failure's not an option. Because you know what? At the end of the year, I want you to think of one thing. Failure is not an option. At the beginning of next year, I want you to think about failure is not an option. And the reality is, when we provide this information to you, failure should not be an option. We have been doing this for many years. And the one thing I am just getting a little frustrated with, not in a bad way, it's. But so many agents that give up because they can't do it. And I find out they're getting another 9 to 5 job or an 11 to 8pm job. I mean, they're just, they're going back to the normal corporate thing they tried to get out of, to get out of the. I'm tied up having to work for someone else to where I could be completely free. And, and man, I'm telling you, as someone who's done this for almost 18 years, 17 and a half years, there is nothing better than working for yourself. Now I can balance that out, you know, because I have a team of people. There's nothing better than working for Chad. There really is.

So that's what it comes down to. But we, and me in general, you know, I love vacation, I love travel, but I give an enormous amount of flexibility to my team too. And if they say, hey, I want to do something, no problem, take it off and no problem. But the reality is most jobs, you can't do that. And you have to be there 9 to 5 or whatever your hours are, you just don't get that type of flexibility. And for, for our industry, there is nothing better than that. You should not have to go back to work. And here's the reality, I mean, I meet with hundreds, if not thousands of people in my career, and I can tell you I am. It's so frustrating to meet with someone who's 65 years old that is currently making 45,000 a year, and they've been at their job for 25 years. And so we. I mean, $1 million annuity will double that. Well, not quite double it, but it will make a lot. Well, after taxes, you know, it'll pay for one year's worth of income. But the reality comes into. We want you to succeed.

We do.

And I can tell you, Income rider is a big topic because you have people. It's like Ford and Chevy. We all know Ford people are right. We know that for sure.

Yeah.

But you get. You just said. Yeah, whoa.

We are not cutting that out. So we all know Ford people.

Right.

You can't say you already said. And so when it comes down to it, you have these people that are Die Hard index only and Die Hard income riders. I'm dying Die Hard. What does the client need? And the only way to find out what they need is to do a complete fact finder. Yep, that's what it comes out to.

Yeah. And if you don't have a fact finder, you need one, and we've got one for you.

Well, as long as you're part of our academy.

Yeah.

Because you know what? We don't do things for free. You know, I mean, that's the thing. Except the podcast, but I'm talking. Yeah, that's true. As we do a lot for free, so we do a lot for free. These take a lot of time. The reality comes into, you know, when it comes to our documents and things like that, these are copyrighted documents. And we, to be fair to our paying agents, it wouldn't be fair to just give them all the free stuff. We already have agents paying for it. Yeah, but what are we talking?

Well, yeah, and I love the way you. You introd it as well, Chad, because, you know, originally we were going to script this thing as the importance of income riders or why you should use income Riders. But you're like, well, wait a second, we've got to qualify this by saying why you should be using income riders when income is the problem or the need or whatever you want to call it. And I think that therein lies a real issue that a lot of agents face. When I talk with agents, I constantly hear the terminology of they have 100,000 to quote, unquote, invest. They have $150,000 to invest. If your mindset, even as an agent, is that they're quote, unquote, investing and they're doing my air quotes again, but that they're investing, your mindset is not set on solving a problem. Yeah, it's $100,000 that you can use to solve a problem. It's $150,000 that you get to use to solve a problem. So if you're not doing a fact finder, you're not going to see what the problem is and you're not going to be able to find the best product to solve the problem.

This is why my average case is over 350,000 or somewhere in that neighborhood. Because when I go to someone's house and they say, Yeah, I have $100,000 to put in, but I find out through the fact finding they actually have a million or 500,000, it still goes into what is the purpose of the money. Now if I find someone that has a million dollars and they say, hey, I only want to put in 100,000, I present my case, I explained to them why they need it and they still want to do 100,000, fine, it's their money. But I can walk away from that appointment knowing through my fact finder, if anybody ever says, well, you helped this guy and you didn't do the right thing and you didn't tell them about income and you just took the hundred thousand, I can go, here's my sheet that I saved, by the way, right? And I went over everything about income. Oh, by the way, here's the illustration. I saved that talked about income. So you cannot say, oh, by the way, here's the other thing that I have them sign if we do do an application is we talked about life insurance, we talked about long term care. Even on my fact finder, we talked about life insurance, we talk about long term care. I cover every base. Because once again, as acting as or anytime you're moving IRA money, you have to act as a fiduciary. So you have to go through these things. So if you're not doing full fact finders, well, it's not good, it's true.

And the flip side to that coin for you, Chad, is you go in, you find some, you're going through the full fact finder, you realize they've got a million dollars, but the lead said they got 100,000 again to invest. But because you do the fact finder, you see there's a whole lot more here that's available should it be needed. So on the fact finder, you're also doing their income analysis. If $100,000 doesn't get them the income they need now you know that this other is here. You can then run them an illustration or whatever it needs to be to show them what it would take to solve the problem. And in that case, if it's income, awesome.

But by the way, I really like having this desk here.

Yeah, we changed it up. Kind of reverted back.

I just felt like before I was Hannah.

Well when we were.

For the, for the people that just listened to us. They're probably not going to know what we're talking about.

No, no. That means they have to go back. Yeah. So we're not telling you.

So go. If you go to the YouTube, you see that there was a few episodes there where we did.

I said don't tell them overhead mics.

This is a sound quality solution here.

Okay. So going to. What you're going to do.

Yeah. Well, just talking about income riders, I think it's important that one we say yeah when it's needed, when it solves the problem. But I think you also have to look at the competition within the same product the competition that an income rider has within the same product to generate income. So what I'm saying is you've got annuitization that can generate income. You've got.

Don't ever do it by the way.

You've got RMDs. If it's qualified count the. That is in essence income. And you've got most products.

You've got the penalty free income. Well, and here's why I say that RMD is a required minimum distribution which most people know that. But that's not income. That's what you have to take out. So you pay taxes.

You pay your taxes on it.

Because income is something. For me income means you have designated as a purpose for income.

Sure.

But even you could count that towards your income.

Right.

But when you're looking at true income, to me it's. And this is important to understand because I've had clients say why are they have income? I take my RMDs out. Okay. So how long is that going to last for?

You don't know.

You don't know. I mean if you have to keep taking your RMDs that increases over the time as you get older because the percentage you have to take out. How do you know? So that's technically not income. And I decipher the difference between the two because somebody, I mean this happens quite often. I'm already getting income. I've taken out my RMDs. Well, what's it gonna. How long is it gonna last you? So that's why I know you're right. Anything you get in is considered income. But for the state of or the stake of sane or sake of. Stake of sake of.

You're already thinking about tonight.

Tonight, madam, we're going to this party and we're. It's a bunch of guys getting together and we are gonna have a big old fat juicy rib eye that's been wrapped in seaweed for two and a half weeks, has been aged for 60 days. I am so ready. This better be good because if it's bad or they mess it up and it does, oh, it's gonna be a bummer.

Yeah, he's like, haven't eaten all day. Saving room for that. And it's like, that's not good. That's gonna really stink.

Okay, but for the sake of using the word income or income rider, we want to make sure we're designating the purpose of income for life.

Right?

In other words, no matter how long you live. Because we go back to the same thing. I've said it so many times. There's two things you can't tell me how long you're living for and what the stock market is going to be doing tomorrow, let alone the next 10 or 5 or 10 years.

Right?

I mean, the stock market is so volatile and there's one thing that controls the stock market. What do you think that one thing is, Caleb?

Emotion.

Emotion. One thing controls the stock market. That's why you can see over the past few months, oh, stock market crashes on variant. Stock market next day, stock market increases off of hope of variant. The next day, stock market crashes on variant next day. Oh, the fear of the variant has changed. Now it's up again. It's all emotion, right? I mean, here's the reality. These newspaper writers and these article writers need to be lined up in their little baby toe. Needs to be hit with a hammer every single time. Because you know what? They're hurting people. So, so I want to hurt them. But anyway, well, because they're, they do off of pure fear.

And you hate, you hate fear.

I hate it when people work off of fear and they manipulate off of fear. I hate that.

Yeah, well, I, I want to go back just a hair to the idea of the competition, right?

So we've talked.

You've got annuitization, you've got RMDs. Thank you for clarifying that. And you've got the penalty free withdrawals. You can take out X percent for, you know, however long. So when you're looking at those, right, you look at annuitization, maybe you have some great guarantees, but your liquidity goes out the window. And any kind of growth we have.

Nowadays with interest rates, we have really annuitization. The interest rate is so low on your annuitization, it's just not worth it anymore.

And then you've got the RMDs where okay, yeah, maybe you get some increase over the years, hopefully so you've got some level of inflation protection simultaneously. You're still market dependent. Think about that. If you take X percent in your RMD and you have a zero year.

Yeah.

Now you're, it's not, it's, and it's not guaranteed to keep going for the.

Rest of your life and it continues to increase. I mean I've gotten calls from people that say, hey, I'm 80 years old now I'm running out of money because I kept in the stock market, I dealt with volatility, my RMDs continue to increase. Now I'm out of money.

Right.

Two things people tell me more than anything else. Never thought I'd get old this fast and I never thought I'd live this long. And so you've got to address that. Yeah, I mean, think about, I mean once again, 17 years. I don't have people complain because they missed out on the stock market rage. I just talked to a client two days ago and she said, you know, the markets went up a lot. I said, yeah, but it always goes up till it goes down. And she goes, that's what I love. I just don't even have to worry about that anymore, you know, and then.

You'Ve got the penalty free withdrawals. Right. Where you take out, you know, a set percentage which again great for freedom. You take out whatever you need, however much of it you want. But again, it's still market dependent. It's still based on if the market performs. Even in the fia, it's still, if the market does this, then you can take that percentage and still have it recouped for the next year. As soon as you have a zero year and you take out your 4, 5, 6, 8% percent and the zero now you have to take out a higher percent the next year to just have the same amount of income. It's not a long term solution. So the only option is if you come for life. If you're, yeah, if that's the, if that's the purpose of money really.

When it comes down to 80% of my business is income for life. Because I don't need income, I have more than enough. Well, when you die, your pension cuts gets cut in half and the lower of the two Social Security goes away. Oh wow. I didn't even think of that. I mean, very rarely do I ever see anybody that can live off of their pension or their Social Security if one of them passes away. Very rare.

Yeah. The last two of those strategies, the RMDs and the penalty free withdrawals are the two most common income strategies that I see or hear and talk with agents about when they're not using income riders. But again, the problem with RMDs is that the design of RMDs is not so that you get income. The design of RMDs is that you have to pay taxes on gradually more and more larger percentage of your funds. The government wants you doing that. And then the penalty free withdrawals that you know, 5, 10%, whatever it is within the product that's not designed to be an income, that's designed to be an emergency liquidity. Correct. Within that first, you know, the surrender period. So the income rider really, even though it does have a charge on it or most do. I guess there are free free riders.

But all the good ones have some sort of charge. Yeah, I mean there's some out there that claim they don't have a charge. But I look at it, I'm going, that's a dog.

Yeah. You know, I think the problem too though Chad, with the going to the RMD specifically is if you look at an income rider on paper versus index strategy, any kind of decent index strategy with the RMD option, the RMD illustration almost always looks better.

I know because why they 10 years, that's why people do it. Just showing the RMDs. And I hate that because I can make the illustration look a lot better if I didn't include guaranteed income for life off of it. And it makes it look like the income will never run out and it makes it look like there's still going to be a death benefit. But the reality is we don't know. Yeah, we don't. And if you, if we have a bad run in a market where the market drops four or five years, which that would be a really bad scenario. I'm not with these doom and gloomers saying market's gonna crash for 10 years. I mean one time in history that I know of is the Great Depression and that was it. So I just don't think that's gonna happen ever again. Because they'll print more money. Could it? Absolutely. But I don't know. But I know beyond any shot of doubt, an income rider. I've never heard of any income ever going away being paid out, including in a annuitized annuity, before the income riders even came out. There you go.

So if you're looking for. If income's the problem and you're trying to find an income solution, and you want to maintain kind of the liquidity features obviously within the contract and real, solid, actual ownership of the contract as well and the account value and all that, and you don't want to be based on market performance, then go with an income rider.

Well, remember we did a video a little while ago that told my favorite product. And until further notice, that's the one. There's. You want to be sure if you want to get contracted with this. Can't. You can if you want to make sure you invest in yourself. Remember, failure is not an option. I mean, you've got to invest in yourself.

Yeah.

You've got to. I just did it myself. I paid a lot of money for a course that I'm taking. I have courses that I subscribe to. Why I constantly want to get better. I. There's no better place for me to invest in myself now, because as I get more knowledge, more revelation, more inspiration, then I can pour into others the same way.

That's exactly right.

Okay, well, I think that's it.

That's it.

Wow. That was pretty simple. Well, as you guys know, of course, the thing I've said from the beginning of time, happy selling.

Sam.