Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Old 11-30-2013, 08:25 AM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
Quote:
Originally Posted by haha View Post
I don't worry about anyone who has more money to spend than I do. Ha
+1
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-30-2013, 08:44 AM   #22
Dryer sheet wannabe
 
Join Date: Sep 2007
Posts: 11
It is the Wellesley Fd. I do not use any of the monies generated by it, all is reinvested.
As I said I was looking for advice to compare with upcoming planners rec's.

ha ha...I hope you are not a financial planner...ha
hudson is offline   Reply With Quote
Old 11-30-2013, 02:22 PM   #23
gone traveling
 
Join Date: Nov 2013
Location: Los Angeles
Posts: 202
Quote:
Originally Posted by REWahoo View Post
I'm no fan of annuities, don't own one and don't have any plans to do so. That said, I can see where a SPIA might be a good financial instrument for some individuals.

I won't venture an opinion as to the suitability of a SPIA for the OP as there are many variables in the decision. But a broad brush statement that "all annuities are bad" isn't backed up by factual evidence.
Once you enter into a SPIA contract your principal is gone for life. All you get is the payments. Agents who sell SPIA's earn between 5 and 10 percent! That money comes right out of your principal in the form of lower payments. You also have to pay for mortality fees, underwriting costs, plus the insurance company factors in their overhead, plus insurance companies are for profit companies. People can easily do better elsewhere. Also the ordinary income monster will get you with annuities. It's not what you make, but what you get to keep.
ETFs_Rule is offline   Reply With Quote
Old 11-30-2013, 02:47 PM   #24
Administrator
Alan's Avatar
 
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,050
Back in 2007 you said you wanted a return of 4% with some inflation protection, and since then you have invested in Vanguard funds including Wellesley.

You can go on the VG site and see what return you have achieved this last 5 or 6 years, including personal performance of each individual fund.

I just had a quick look at my Wellesley account and from Nov 1, 2008 to Nov 30, 2013 it has returned 11.8% /year. Your personal return will be different as I was adding to my fund for the first 18 months of that period while I was still working.

How have your funds performed, and what level of improvement are you looking for?
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
Alan is offline   Reply With Quote
Old 11-30-2013, 09:30 PM   #25
Thinks s/he gets paid by the post
bmcgonig's Avatar
 
Join Date: Aug 2009
Posts: 1,577
Quote:
Originally Posted by ETFs_Rule
Once you enter into a SPIA contract your principal is gone for life. All you get is the payments. Agents who sell SPIA's earn between 5 and 10 percent! That money comes right out of your principal in the form of lower payments. You also have to pay for mortality fees, underwriting costs, plus the insurance company factors in their overhead, plus insurance companies are for profit companies. People can easily do better elsewhere. Also the ordinary income monster will get you with annuities. It's not what you make, but what you get to keep.
I've gotten quite a few quotes for SPIAs. The commission was only 2% of the money put down. I think you're confused with variable annuities?
bmcgonig is offline   Reply With Quote
Old 11-30-2013, 09:49 PM   #26
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,856
Quote:
Originally Posted by ETFs_Rule View Post
People can easily do better elsewhere. Also the ordinary income monster will get you with annuities. It's not what you make, but what you get to keep.
Your characterization of SPIAs is a little one-sided. It's longevity insurance, and we're just as likely to "waste" our money on that type of insurance as we are on health insurance, fire insurance, and liability insurance.

Social Security may be the only longevity insurance that most people need-- but not everyone is eligible for Social Security, and ERs can have a lot of zeros in their earnings records.

Most people could easily do better "elsewhere" by self-insuring their longevity, but if they did then all the financial advisors would be out of business. So would the annuity sales people.

The whole point of a SPIA is to keep people from running out of money in that tiny little black-swan corner of the bell curve that is not able to be treated as part of a log-normal distribution. If FIRECalc gives a 95% chance of success then an SPIA can cover most of the 5% chance of failure... and the rest of the failure probabilities can be handled by a variable spending plan. An SPIA can keep the "variable" part in the vicinity of "cheap groceries" without dipping into "cat food" territory.
__________________
*

Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."

I don't spend much time here— please send a PM.
Nords is offline   Reply With Quote
Thread Bump
Old 12-14-2013, 08:37 AM   #27
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 2,736
Thread Bump

Quote:
Originally Posted by Nords View Post
Your characterization of SPIAs is a little one-sided. It's longevity insurance, and we're just as likely to "waste" our money on that type of insurance as we are on health insurance, fire insurance, and liability insurance.

Social Security may be the only longevity insurance that most people need-- but not everyone is eligible for Social Security, and ERs can have a lot of zeros in their earnings records.

Most people could easily do better "elsewhere" by self-insuring their longevity, but if they did then all the financial advisors would be out of business. So would the annuity sales people.

The whole point of a SPIA is to keep people from running out of money in that tiny little black-swan corner of the bell curve that is not able to be treated as part of a log-normal distribution. If FIRECalc gives a 95% chance of success then an SPIA can cover most of the 5% chance of failure... and the rest of the failure probabilities can be handled by a variable spending plan. An SPIA can keep the "variable" part in the vicinity of "cheap groceries" without dipping into "cat food" territory.
+1

What I would add to this is that the OP should consider using an 'annuity hurdle' concept, as advocated by Fullmer and Otar. With the size of the OP's portfolio versus income needs, he's in a position to likely never need an SPIA but, should have a plan for the 'unlikely' events as described above by Nords. I'd suggest the OP study Fullmer's work and the "zone" section of Otar's book.
__________________
You may be whatever you resolve to be.
100% x 10% > 10% x 100%
Small pensions & SS cover essentials
Huston55 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


» Quick Links

 
All times are GMT -6. The time now is 07:23 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.