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A Variable Annuity that Works
Old 09-21-2009, 06:57 AM   #1
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A Variable Annuity that Works

From 3 strategies to guarantee income in retirement - Sep. 21, 2009 This is the way to make a
variable annuity work - just have 150%!

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Old 09-21-2009, 07:06 AM   #2
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Even investing 100% in annuities and the other 50% in stocks and bonds you only have a 92% chance...
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Old 09-21-2009, 07:17 AM   #3
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Even investing 100% in annuities and the other 50% in stocks and bonds you only have a 92% chance...
Yes, especially if your state only guarantees the first $100,000 of an annuity in the event the company offering it craters before you are 95.
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Old 09-21-2009, 08:03 AM   #4
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Based on this post, I am slicing and dicing: 100% in stocks, 100% bonds, 100% cash, 100% annuities, and 100% in pork bellies.
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Old 09-21-2009, 08:22 AM   #5
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Why would someone conclude the variable annuity works when you can increase the chances of success from 92% to 99% by replacing it with an immediate annuity?

I have some reservations about these calculations, but even if I accept them at face value, it seems like all this is doing is telling us that an immediate annuity is better than a VA. And it doesn't account for the chance of an insurer to fail and it doesn't account for people who want to preserve capital to pass to their heirs.
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Old 09-21-2009, 09:14 AM   #6
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Why would someone conclude the variable annuity works when you can increase the chances of success from 92% to 99% by replacing it with an immediate annuity?

I have some reservations about these calculations, but even if I accept them at face value, it seems like all this is doing is telling us that an immediate annuity is better than a VA. And it doesn't account for the chance of an insurer to fail and it doesn't account for people who want to preserve capital to pass to their heirs.
Uh... Ziggy. Re-read the thread (especially the arithmetic) with your sarcasm radar turned up a notch .
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Old 09-21-2009, 09:16 AM   #7
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Even investing 100% in annuities and the other 50% in stocks and bonds you only have a 92% chance...
Finally I understand the power of leverage...
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Old 09-21-2009, 09:19 AM   #8
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Old 09-21-2009, 09:22 AM   #9
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Why would someone conclude the variable annuity works when you can increase the chances of success from 92% to 99% by replacing it with an immediate annuity?
Quote:
You need more income than Social Security and pensions will provide, but you want access to more of your savings than Strategy 2 allows.
"I'll go broke eight times as often, but look at how much more money I'll have!"*

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I have some reservations about these calculations...
150% of the people who make these math errors suffer a 200% loss of credibility... 92% of the time.

* This endorsement has been brought to you by the Variable Annuity Sales Association. Remember to check out our equity-index products, too!!
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Old 09-21-2009, 09:31 AM   #10
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Immediate annuities right now only pay 4-5 % not 8%. Big difference. I just checked last month for a joint IA for wife & myself.
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Old 09-21-2009, 09:43 AM   #11
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Mysto - Many thanks for revealing the secret of making 100% --> 150%. All I have to do is make a pie-chart with four sections!

I'm going to get to work on it right away. I'm gonna make one apple, one cherry, one...
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Old 09-21-2009, 09:48 AM   #12
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Uh... Ziggy. Re-read the thread (especially the arithmetic) with your sarcasm radar turned up a notch .
It's not the sarcasm radar -- it's the early morning lack of coffee.
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Old 09-21-2009, 02:39 PM   #13
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Immediate annuities right now only pay 4-5 % not 8%. Big difference. I just checked last month for a joint IA for wife & myself.
The article is correct. 65 year old male gets about 7.9%. You are right though, a joint annuity pays about 5% for the same age group.

Rich - you forgot foreign and gold - You'll need at least another 200%

Telly - I like pecan

I just posted this to show off the financial experts that all told us about the recession - right after it crashed - but they did it 800%
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Old 09-21-2009, 02:56 PM   #14
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That graphic is hilarious, Mysto--good catch! And several hours later, the 150% portfolio is still on the CNN website.
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Old 09-21-2009, 04:34 PM   #15
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That graphic is hilarious, Mysto--good catch! And several hours later, the 150% portfolio is still on the CNN website.
And I notified them right after I posted. But remember, CNN the most trusted...
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Old 09-21-2009, 05:58 PM   #16
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Cynics. I read the literature and with the variable annuity you do get an extra 50% so there is no math error.
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Old 09-21-2009, 06:03 PM   #17
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Cynics. I read the literature and with the variable annuity you do get an extra 50% so there is no math error.
If this thread tracks with history a swarm of professional annuity salespersons will be along shortly to show us the error of our cynical thinking.
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Old 09-21-2009, 06:09 PM   #18
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Mysto - Many thanks for revealing the secret of making 100% --> 150%. All I have to do is make a pie-chart with four sections!

I'm going to get to work on it right away. I'm gonna make one apple, one cherry, one...
banana cream and lemon meringue, please.
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Old 09-22-2009, 06:55 PM   #19
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And I notified them right after I posted. But remember, CNN the most trusted...
Dear Ms. XXXXXX,
Apparently the numbers for Strategy #3 were incorrectly entered when posting the online version. The percentages for Strategy 3 on page 94 in the October issue of MONEY do indeed add up to 100%. I’ve sent a note to the online folks asking them to correct the numbers. Thanks for alerting me, and I hope I caught you before you rushed out and invested 150% of your money.
Regards,
Walter Updegrave

I plan to write back and tell him I took my HELOC and IRA and bet the farm so I could invest 3 times as much! At least he was trying to correct it and still has a sense of humor!

BUYER BEWARE is the rule.
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Old 09-22-2009, 07:00 PM   #20
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Connie, that's a very funny response!
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