48 and wishing, hoping, planning all my life..

[swkoo]

Greetings: I have been reading all I can on personal finance and been reading this site for a couple of years on & off, recently addicted to the knowledge and insights of the site. I am 48, have wife, 2 kids at home 15 & 17 yrs. Will have state (not private) college costs. Mortgage is 370k. Have saved all my life, lived under my (our) means and have done well professionally. Wife does not work. Saved $2M and want to be able to quit within 2-3 years and live off 96k annually. Went 75% cash last fall, got spooked, this has saved me a lot. Don't really want to loose what I have worked all my life for, don't sleep well at night if deep into the market. Would appreciate any ideas, suggestions or comments.
Thanks

[Martha]

Welcome to the forum. I don't have any advice other than at some point to keep up with inflation you will have to go back to taking some risk.

[Westernskies]

Welcome to the forum. You have already figured out the single most important practice- LBYM. Sounds like you are well on your way to FIRE.
All the Best,

[donheff]

Sounds like a candidate for a diversified set of COLAd SPIAs with 100% survivor coverage.

[JohnF]

Agree with donheff...you can lock into guaranteed annuity income starting at 4% on up to 8% and increasing every 5 years or so . There are a few companies that also provide a boost to your accumulation AND income balances (5-15%)...may be very attractive for you given the balance you currently have in place.

[73ss454]

JohnF, of course you recommend using a broker and not using low cost ones from vanguard or something like that, no?

[JohnF]

No, I don't recommend one way or another. I work as an independent broker so I provide my clients with several options based on their requests. I think anyone should do their own due diligence to make sure they are getting the best deal available. My main thing now is to put your retirement on "cruise control"...if you've worked that hard to save it, the last thing you want to happen is it to be depleted unjustly from exposure to external forces. I don't charge my clients fees...I'm compensated if I earn their business and they select a product I recommend.

[73ss454]

JohnF, do you disclose all the fees on the annuities when you offer them to your clients? You say you care about your clients so why wouldn't you just tell them to go to a low cost provider so they don't have to pay commissions that are on the moon?

[brewer12345]

Originally Posted by JohnF

I don't charge my clients fees...I'm compensated if I earn their business and they select a product I recommend.

"I don't beat my wife. I just hold out my fist and she runs into it sometimes."

[73ss454]

I don't want to be rude but JohnF, did you mean. You're compensated if you trick them into products that you recommend. If your clients knew what you were doing or selling them I'm sure you'd have less clients.

[brewer12345]

Originally Posted by 73ss454

I don't want to be rude

I do. If our latest annuity vulture salescritter wishes to flog his chosen product and sing his own virtues, so be it. But if he expects those of us with half a brain to accept self-serving tripe at face value, he had better be wearing his asbestos undies.

[Urchina]

Originally Posted by JohnF

My main thing now is to put your retirement on "cruise control"...if you've worked that hard to save it, the last thing you want to happen is it to be depleted unjustly from exposure to external forces .

-

Um, does "unjust depletion from exposure to external forces" include the company going belly-up and taking your money with it? Or are annuities FDIC insured, too?

[brewer12345]

Originally Posted by Urchina

-

Um, does "unjust depletion from exposure to external forces" include the company going belly-up and taking your money with it? Or are annuities FDIC insured, too?

No, annuities are not FDIC insured. There are fairly weak state-level guarantee pools that will mean diddly if a big insurer goes tits up and screws policyholders. Anyone remember that Vanguard's marketing partner forimmediate annuities was AIG? The insurance companies in AIG have not imploded AFAIK, but I don't imagine that those policyholders are feeling real secure these days.

[JohnF]

All, I thought this forum was about discussing options. I never once gave a sales pitch for anything that I do. I simply put it out there as to what I do. I do not recommend any one product to a client...we have a discussion and we lay out options. Sometimes it fits their needs, sometimes it does not. I understand you may have had a negative experience with whomever you have dealt with, but that does not transcend us all.

It's interesting that so many of you have opinions, but have not offered solutions. I know that there are several options that folks should explore and I believe I stated such. For clarification, my unjust refers to someone who has worked hard and has a short window 5-10 years to retirement, only to find that their trusty portfolio has dropped (as in recent times) and they will have work longer now because the "market" turned in the wrong direction. Say what you want, but there are people right now in this boat and are looking at alternatives such as CDs and annuities.

Anyway, I welcome any "solutions" versus frivilous banter to distract the topic at hand. We are all adults, let's behave like them people.

[brewer12345]

Originally Posted by JohnF

All, I thought this forum was about discussing options. I never once gave a sales pitch for anything that I do. I simply put it out there as to what I do. I do not recommend any one product to a client...we have a discussion and we lay out options. Sometimes it fits their needs, sometimes it does not. I understand you may have had a negative experience with whomever you have dealt with, but that does not transcend us all.

I am impressed at how well you dodged that straight-forward question on what you tell your clients about costs and commissions. Keep it up: you are carryiong on the "best" traditions of annuity salesmen everywhere.

[JohnF]

Brewer,

We disclose any fees up front to our clients. Typically the only cost are for additional riders. I only deal with fixed and fixed indexed products for clarification. All product disclosures are discussed so there are no surprises. I am more than willing to disclose the commission as well. Steering a client to any one particular product to gain a higher commission is illegal and frowned upon in this industry.

Does that answer your question?

[JohnF]

Brew, one more thing...it's not so straight forward when you have four or five compounding questions at once. I hope I answered everything else.

[Coach]

swkoo, welcome to the forum! You're doing remarkably well having saved $2M by age 48. I think there's a reasonable chance you'll achieve your goal.

Have you spent time with FIRECalc? It's a great tool to help you examine your retirement financial readiness. There's a link at the bottom of every page.

If you've been reading this site you know that health insurance is an extremely important issue for early retirees. Do you have a plan for that?

Again, welcome and best wishes.

Coach

[Bestwifeever]

Swkoo, I would say keep doing what you're doing and see where you (and the economy) are in two or three years; if you keep reading this board you'll see that people have many different strategies they use themselves to offset inflation. Agree with Coach about running the basic numbers through FIRECalc. Offhand if inflation equals the money market interest you make, your money will run out in just over 20 years ($2 million divided by $96,000 = 20.8). You would be 70 then.

(JohnF, why don't you post an introduction on the "Hi, I am..." forum here? There are people on this thread who use annuities themselves to good effect (and defend them ) but AFAIK they aren't selling them. It would be interesting to see your personal investment strategy.)

[brewer12345]

Originally Posted by JohnF

Steering a client to any one particular product to gain a higher commission is illegal and frowned upon in this industry.

Haaaahahahahahahahaha!!!!!! Good one. I can see you are a born salesman.