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Sooo confused about what to do!
Old 04-22-2017, 01:23 PM   #1
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Sooo confused about what to do!

I am really hoping to get some good advice here.
I was hoping to retire at the end of this year, at least from my current stressful job that I have been in for over 10yrs. I will be 63.
All the financial advisors I have talked too want to put the majority of my $$ into annuities + leave some in an IRA that I also have for liquidity.
So far most of my friends that have wanted to share their financial info (not numbers of course) have also said their money is in annuities, another says theirs is in a IRA retirement fund of a mixture of stocks + bonds.
I am really concerned of course about losing any $$ + having enough to last.
This is why I thought the annuity route might be the way to go until the advisor wanted to put my money in a 16yr annuity, that made me nervous, although it's not there for me to be spending/pulling out frequently, it made me rethink it.
So far it sounds like I may be ok until I found out how much medical insurance might be per month, much more than I was told about a year ago.
I also have a pension with this job so that helps as well.
I was planning on working part-time anyway so maybe that would help with the medical ins part also, although since Obama care it may not be available.
Any help/suggestions would be greatly appreciated!
Thx so much!!
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Old 04-22-2017, 01:49 PM   #2
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Welcome Pookie! You will get some good advice here, but if you want a mechanic to check out your engine, you have to open the hood. In other words, you're going to have to put some numbers out there. How much you expect to spend and what your financial resources are will be necessary to tender an opinion on your plan.
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Old 04-22-2017, 01:51 PM   #3
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Any help/suggestions would be greatly appreciated!
Without actual numbers we'd only be guessing.
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Old 04-22-2017, 02:20 PM   #4
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... All the financial advisors I have talked too want to put the majority of my $$ into annuities ...
You are absolutely talking to the wrong "advisors." The main advantage of an annuity is that the "advisor" (aka shyster salesperson) gets a huge commission for selling one. This class of shyster is running scared from the proposed fiduciary standard because it will shut down this little gold mine.

You need to find a "Registered Investment Advisor." Ask about a "Series 65" or a "Series 66" certification. These people are legally required to be fiduciaries and, if an annuity is appropriate, will steer you to one that is not a ripoff and they will not collect any money for doing so. Their only compensation is via an hourly rate or a flat annual fee as a % of your assets.

I have been looking ad advisors lately in connection with a nonprofit that has some money to invest. I have been impressed with the Dimensional Fund Advisors reps: https://us.dimensional.com/individuals There is also some level of personal counseling available from firms like Vanguard and Schwab, but it sounds like you may need more personalized and thorough work than that class of advisor can provide. You can certainly check them out, however.

Do NOT make important investment decisions based on advice you get for free on the internet. Most of it is worth what you pay. Some of it will cost you money because it is wrong.
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Old 04-22-2017, 02:21 PM   #5
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Without actual numbers we'd only be guessing.
Agreed. That said, "putting the majority of assets" into annuities is almost certainly not going to be the ultimate answer.
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Old 04-22-2017, 02:27 PM   #6
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Have to agree with others here. Annuities rarely benefit the person who purchases them. They are designed to pay big commissions to sales people. For those who really know what they are doing and decide that some portion of their wealth should be annuitized, they don't buy the annuities through financial advisors. They go to a company like Vanguard that gives fair and honest advice and doesn't incentivize their team to pitch annuities by paying out big commissions.

Chances are, if these friends of yours bought annuities from a financial advisor, they got sold a bill of goods.
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Old 04-22-2017, 04:19 PM   #7
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Welcome Pookie. Many of us here are retired and very few of us have annuities (some do, but I would guess much less than half). You don't really need them and as many have indicated, they are complicated and expensive.

I worked in the industry and I would never buy one. You will be much better off in the long run by investing your money in a good low-cost balanced mutual fund than in annuities.
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Old 04-22-2017, 04:26 PM   #8
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You are absolutely talking to the wrong "advisors." The main advantage of an annuity is that the "advisor" (aka shyster salesperson) gets a huge commission for selling one. This class of shyster is running scared from the proposed fiduciary standard because it will shut down this little gold mine.

You need to find a "Registered Investment Advisor." Ask about a "Series 65" or a "Series 66" certification. These people are legally required to be fiduciaries and, if an annuity is appropriate, will steer you to one that is not a ripoff and they will not collect any money for doing so.
+1. I personally have no interest in annuities. I hate how much of your money goes to various fees. Find an advisor that will work for a fixed flat fee. I believe there is an organization of certified financial planners that work this way.
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Old 04-22-2017, 04:35 PM   #9
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I don't own any annuity, other than social security, which is a very good annuity indeed.

However, people should specify what sort of annuity they are referring to when they make blanket assertions about ripoffs, high commissions, etc. An ordinary immediate annuity is generally not a high commission product. In fact one can get quotes through Vanguard, the white horse rider, white hat wearer, in many people's estimations.

Respected academics like Moshe Milevsky and others strongly recommend lifetime annuities for many people in many situations.

Advice to OP is to clearly understand what you are talking about, and what your advisers here or elsewhere are talking about, then do some careful research before going ahead. Milevsky in particular has written entire books on the topic.

Ha
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Old 04-22-2017, 08:07 PM   #10
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On thing for certain, if you are confused and you do not fully understand what you are investing in, then don't invest in that product. Fare better to let your money sit in a 3 to 6 month CD guaranteed by the US Government while you learn more.
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Old 04-22-2017, 08:27 PM   #11
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I don't own any annuity, other than social security, which is a very good annuity indeed.

However, people should specify what sort of annuity they are referring to when they make blanket assertions about ripoffs, high commissions, etc. ..
I'll second this. Unfortunately, the annuities that are good for you are not the ones that are good for most advisors.

Also--Both here and at Bogleheads, you can get some great guidance. As noted above by bigcmagor and Broadway, however, you need to provide more data.
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Old 04-22-2017, 08:36 PM   #12
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Originally Posted by haha View Post
I don't own any annuity, other than social security, which is a very good annuity indeed.

However, people should specify what sort of annuity they are referring to when they make blanket assertions about ripoffs, high commissions, etc. An ordinary immediate annuity is generally not a high commission product. In fact one can get quotes through Vanguard, the white horse rider, white hat wearer, in many people's estimations.

Respected academics like Moshe Milevsky and others strongly recommend lifetime annuities for many people in many situations.

Advice to OP is to clearly understand what you are talking about, and what your advisers here or elsewhere are talking about, then do some careful research before going ahead. Milevsky in particular has written entire books on the topic.

Ha
I agree. Check out the retirement by Janet Quinn Bryant, she is my favorite financial author, she explains well what kind of annuity in that book. She said you can get immediate annuity from a portion of your IRA money. My pension is that form of annuity. I could get the lumsump and deal with investing with that money, but instead I choose annuity.
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Old 04-23-2017, 05:59 AM   #13
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We can't do anything without numbers other than tell you annuities may not be the answer. Most people here use annuities as a last resort if at all. If you're not willing to share your info, you might start with FIRECalc: A different kind of retirement calculator, like many of us did and still do. Spend some time with it, there's a lot beyond the first page/tab. Good luck.
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Old 04-23-2017, 07:23 AM   #14
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A couple of answers I'd like to know is what kind of advisor and what type of annuity?
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Old 04-23-2017, 07:57 AM   #15
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On thing for certain, if you are confused and you do not fully understand what you are investing in, then don't invest in that product. Fare better to let your money sit in a 3 to 6 month CD guaranteed by the US Government while you learn more.
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Old 04-23-2017, 07:58 AM   #16
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Is the company pension well funded? Is the company financially sound for the long term? Is the pension protected by the Pension Benefit Guaranty Corporation (PBGC)? If these are all mostly yes, then you probably will have two annuities already - your pension and SS. Why put more $ in one basket/financial vehicle? Diversify! It's safer for you. Please provide data and you'll get better advice.
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Old 04-23-2017, 08:08 AM   #17
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I agree with the other replies but let me accentuate an important caveat:
" Investing 101" rule is to NEVER invest in something you don't understand.

The title of this thread clearly indicates you definitely should not get an annuity now. Once you're educated on annuities (i.e., NOT from the Financial Advisor selling them), and know the benefits and risks, then you can see if an annuity is right for you.
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Old 04-23-2017, 08:26 AM   #18
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I agree. Check out the retirement by Janet Quinn Bryant, she is my favorite financial author, she explains well what kind of annuity in that book. She said you can get immediate annuity from a portion of your IRA money. My pension is that form of annuity. I could get the lumsump and deal with investing with that money, but instead I choose annuity.
"Aunt Jane" lays information and concepts out in a nice from the perspective of the reader. As opposed to another author who berates her readers.

Think her book about managing your money in the 80's was how I discovered there is such a think as index funds. Playing the market by not playing was kinda how she described that.
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Old 04-23-2017, 10:40 AM   #19
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Thx all, appreciate the feedback you've already given.
My advisor said she is a fudiciary + that because I said my main concern was keeping + not outliving my $$, she thought the annuity was the way to go, not sure if I totally believe that since like I said before most everyone I spoke to recommends annuities. The other part is that I don't believe she told me till after I had signed the papers it is for 16yrs! This is where it really shook me up + I have since told her I don't want to do it. That annuity is called American Equity Bonus Gold with a lifetime income benefit rider. It is a fixed index annuity + she said it would make 6% compounding interest a year. Plus if I became unable to perform 2 of my activities of daily living + had a MD note then the monthly benefit would double every yr for up to 5yrs. I have had long term ins for yrs already thru Genworth that is a lifetime plan that I have been grandfathered in, but I worry about being able to afford it in the future as I now pay 605 quarterly + have already had to change the compound interest over to simple as the cost went up to over 800/quarter alittle over a yr ago. She has of course already moved my money from my 401k into it, but my 30days right to look is not up yet, so she said she sent me a letter to sign, which I haven't received yet, to move it over to an IRA w/ Fidelity, in there as cash approx 111k. I have not looked at this yet but it is a Fidelity Premiere Select IRA + I'm guessing she is getting something out of it. I checked + I cannot return my money to my 401k. She moved some other money I had from another IRA brokerage acct, 89k to this Fidelity acct as there were a lot of trading fees going on, 1 acct had been traded over 2000 times! In the fall of 2015 I was working w/a different financial person who put me in that acct + also put me in another annuity, a Metlife Shield index annuity, where it will grow but I can also lose money if the market drops more than 10%., there's approx. 100k there. I have been back + forth in my thinking if I should take SS now or try to hold off, my current mo amt would be 1656 per online statement. So again, any advice is greatly appreciated!! Thx soooo much.
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Old 04-23-2017, 10:53 AM   #20
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Pookie,

Read this review on American Equity Bonus Gold and then tell us if you think your financial advisor is really acting as a fiduciary.

An impartial review of the American Equity Bonus Gold Annuity
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