Apr 12, 2023
In this episode, The Annuity Man discussed:
What does it mean to live off the interest?
Living off guaranteed interest
When interest rates go down
If you can’t live off of the interest
At the time of this taping, some money markets are 4, some CDs at five, and some MYGAs at five and a half. A lot of you out there have enough funds that whatever interests you can take off of those products is sufficient, and you never have to touch the principal.
There's no guaranteed return with index annuities, variable annuities, or buffer annuities. That doesn’t mean they’re bad products, but if you can live off of a guaranteed interest, why not do that?
When you lock in at a certain interest, it doesn’t matter if the interest rates go down in the market - you’ll benefit from what is contractually guaranteed.
Suppose we can prove mathematically that we can’t hit your goal from living off of the interest. In that case, that’s when we’ll look for contractual guarantee products for lifetime income because they’ll provide a higher payback of your money.
"You're going to ride that peeling off the interest as long as you can. You're gonna ride that train of never touching the principal and never paying a fee as long as you can, and if rates go down, then we will pivot " — Stan The Annuity Man.
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