Join Early Retirement Today
View Poll Results: Whats your thinking on annuities?
Would never consider one, ever 14 10.45%
Would consider one as part of my investments, if the numbers made sense 102 76.12%
Would put all or most of my money into one if the numbers made sense 6 4.48%
Would put all or most of my money into one because they're one of the better investment options 0 0%
Bought one, like it, would do it again 7 5.22%
Bought one, dont like it, wouldnt do it again 5 3.73%
Bought one, dont like it, but would consider buying one again 0 0%
Voters: 134. You may not vote on this poll

Reply
 
Thread Tools Search this Thread Display Modes
Re: Annuities and their role in our investing plan
Old 01-31-2007, 02:24 PM   #121
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Re: Annuities and their role in our investing plan

Quote:
Originally Posted by brewer12345
EP, based on what you have told us, it would not surprise me if your total expense ratio is ~3% annually.
Probably is........I know that of the "big guys" out there, Hartford has the LOWEST M&E of 1.15%, plus the subaccount fees........usually around .65-1.00, plus any riders like living benefits of .40-.65.

The returns quoted on historical performance are net of fees, as would be on a Vanguard or Dodge and Cox or whatever............

Vanguard and others have a much lower cost, albeit without living benefit riders or whatever. So I guess it goes back to why it's right for someone or not.............

It seems to me that it's about education. What make ME comfortable is not the same as others, etc. Not everyone can fully embrace ALL the things a number of folks on this board do ..................

Reminds me of a friend of mine that has a HUGE library of self-help books, but never makes any changes ................just keeps buying "books from gurus"...................
__________________

__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude 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!

Re: Annuities and their role in our investing plan
Old 01-31-2007, 02:29 PM   #122
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Annuities and their role in our investing plan

Quote:
Originally Posted by Empty Pockets
But someone please tell me specifically, what would be safer about holding these funds outside of an annuity ? That's what I'd be doing otherwise.
I think you have no better options. An actionable course might be to determine the fund and account expenses and look for ways to reduce them. The two indexes in my wifes VA cost a lot compared to other indexes outside of a VA, but they're way cheaper than the other fund options and WAY cheaper than the default funds the plan provider put her in before I met her.

Perhaps if one or two of the diversifying options is quite expensive, you could fund that in a taxable account while shifting assets within the VA to cheaper fund options. Or slide into indexing options available, cut the expenses and look at the returns long term as being better due to both the lower expenses and indexing...
__________________

__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-31-2007, 02:38 PM   #123
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Re: Annuities and their role in our investing plan

Quote:
Originally Posted by Cute Fuzzy Bunny
I think you have no better options. An actionable course might be to determine the fund and account expenses and look for ways to reduce them. The two indexes in my wifes VA cost a lot compared to other indexes outside of a VA, but they're way cheaper than the other fund options and WAY cheaper than the default funds the plan provider put her in before I met her.

Perhaps if one or two of the diversifying options is quite expensive, you could fund that in a taxable account while shifting assets within the VA to cheaper fund options. Or slide into indexing options available, cut the expenses and look at the returns long term as being better due to both the lower expenses and indexing...
Pre-tax is still better than after-tax IMO..............tough to make 20-30% guaranteed up front.............
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-31-2007, 02:42 PM   #124
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Annuities and their role in our investing plan

Agree completely, and thats why we've been chucking money into my wifes VA.

I guess I was figuring there may already BE an after tax account (he mentioned a Roth) and the asset allocation could be split with the after tax account holding high fee asset classes while the pretax VA account contains low-fee core stock and bond indexes...if they're even available in the VA fund choices.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-31-2007, 03:04 PM   #125
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: Annuities and their role in our investing plan

Quote:
Originally Posted by Empty Pockets
I know it was a great year, I've owned this annuity through some very bad years too, and I also know that there are no "guarantee's" in anything. But someone please tell me specifically, what would be safer about holding these funds outside of an annuity ? That's what I'd be doing otherwise.

Myself, I don't have a problem with owning a Variable Annuity, I do have a problem with how some annuities are marketed and overpromised, and I know - they're not for everybody. I've been investing in equities for 20 years and know all too well the risks that come with them.

Glad to see the focus back on annuities.
Here is the problem I have with annuities:

- Give me 2.5% of your account balance every year and I will guarantee that over 10+ years (subject to many restrictions) you won't lose money.

This guarantee has almost zero value.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-31-2007, 03:13 PM   #126
 
Posts: n/a
Re: Annuities and their role in our investing plan

Quote:
Originally Posted by brewer12345
Here is the problem I have with annuities:

- Give me 2.5% of your account balance every year and I will guarantee that over 10+ years (subject to many restrictions) you won't lose money.

This guarantee has almost zero value.
I agree with it's not a great way to build a retirment fund.

I respect your opinion Brewer. With that said - what is your opinoin of a 70 year old buying an annuity outriight via Vanguard with the objective of increasing his SWR safely? Not for accumulation, but for a lifetime of income?- Are there any other investments that you would recommend that would be 'safer' that would provide comparable income?
__________________
  Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-31-2007, 03:32 PM   #127
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: Annuities and their role in our investing plan

Quote:
Originally Posted by Cut-Throat
I respect your opinion Brewer. With that said - what is your opinoin of a 70 year old buying an annuity outriight via Vanguard with the objective of increasing his SWR safely? Not for accumulation, but for a lifetime of income?- Are there any other investments that you would recommend that would be 'safer' that would provide comparable income?
If you are in your 70s and buy a payout annuity with less than a majority of your stash, I think that would be an OK choice if you understood what you were getting into and were OK with the notion of a smaller estate. But, I would not buy one from VG because I don't like/trust the company that actually issues the annuities.

I don't think this works at all if you are younger.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-31-2007, 03:36 PM   #128
 
Posts: n/a
Re: Annuities and their role in our investing plan

Quote:
Originally Posted by brewer12345
If you are in your 70s and buy a payout annuity with less than a majority of your stash, I think that would be an OK choice if you understood what you were getting into and were OK with the notion of a smaller estate. But, I would not buy one from VG because I don't like/trust the company that actually issues the annuities.

I don't think this works at all if you are younger.
Thank you! - And I would not want one for anyone younger also. - And I totally buy into the idea of a smaller estate! 8)
__________________
  Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-31-2007, 03:38 PM   #129
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,617
Re: Annuities and their role in our investing plan

Quote:
Originally Posted by brewer12345
But, I would not buy one from VG because I don't like/trust the company that actually issues the annuities.
Now that they're hypothetically Ace-less, how long/what would it take for AIG to rehabilitate themselves?
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-31-2007, 03:57 PM   #130
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 149
Re: Annuities and their role in our investing plan



- "Give me 2.5% of your account balance every year and I will guarantee that over 10+ years (subject to many restrictions) you won't lose money."

Well, if you can do it on a tax deferred basis, and let me switch between equity funds & rebalance without incuring a tax and throw in a guaranteed minimum rate of return with a stepped up base every 5 years..... let's talk.


__________________
"Watch your topknot"
Empty Pockets is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-31-2007, 04:03 PM   #131
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: Annuities and their role in our investing plan

Quote:
Originally Posted by Nords
Now that they're hypothetically Ace-less, how long/what would it take for AIG to rehabilitate themselves?
I will never do business with that company, personally. There are so many insurers out there, why compromise?
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-31-2007, 07:16 PM   #132
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Annuities and their role in our investing plan

Quote:
Originally Posted by brewer12345
If you are in your 70s and buy a payout annuity with less than a majority of your stash, I think that would be an OK choice if you understood what you were getting into and were OK with the notion of a smaller estate. But, I would not buy one from VG because I don't like/trust the company that actually issues the annuities.

I don't think this works at all if you are younger.
How about the actual proposed version?

Would you increase your withdrawal rate over the "safe" limit, say to 6%, in your 50's and 60's, then offset the overspending by deferring social security until you're 70 and annuitizing half or more of what you have left, also at 70, in order to create a life-long safety net needed to offset the earlier higher spending rate?

If you did, would you consider those payments to be "ultra safe" or "guaranteed" and reasonable for a couple living from 70-120 years of age, in other words for 50 years?

Hmmm...Firefox's spell checked didnt like the word "annuitizing", offering "unappetizing" as its first alternative...
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-31-2007, 07:56 PM   #133
Full time employment: Posting here.
 
Join Date: Jan 2007
Posts: 585
Re: Annuities and their role in our investing plan

Quote:
Originally Posted by Cute Fuzzy Bunny
How about the actual proposed version?

Would you increase your withdrawal rate over the "safe" limit, say to 6%, in your 50's and 60's, then offset the overspending by deferring social security until you're 70 and annuitizing half or more of what you have left, also at 70, in order to create a life-long safety net needed to offset the earlier higher spending rate?

If you did, would you consider those payments to be "ultra safe" or "guaranteed" and reasonable for a couple living from 70-120 years of age, in other words for 50 years?
There was never any mention of Social Security in the questions that I asked you and Brewer! - Why don't you go back and read the posts. Social Security was in a different thread.

Not that it matters - It's totally unrelated! :
__________________
Cut-Throat is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-31-2007, 08:37 PM   #134
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Annuities and their role in our investing plan

Who said my question had anything to do with you or your question?

Besides, this is my thread so perhaps its time for you to move on!
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-31-2007, 08:49 PM   #135
Full time employment: Posting here.
 
Join Date: Jan 2007
Posts: 585
Re: Annuities and their role in our investing plan

Quote:
Originally Posted by Cute Fuzzy Bunny
Who said my question had anything to do with you or your question?

Besides, this is my thread so perhaps its time for you to move on!
I think it's time you took another 'break' from the forum
__________________
Cut-Throat is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-31-2007, 09:43 PM   #136
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Annuities and their role in our investing plan

Quote:
Originally Posted by Cut-Throat
I think it's time you took another 'break' from the forum
You're entitled to your opinion and that may indeed be the case.

However someone like you wont be the impetus.

Now run along before I ask an actual moderator to remove your unrelated posts from my thread.

As has been said before, you have a nice life now.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 02-01-2007, 07:35 AM   #137
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: Annuities and their role in our investing plan

Play nice, kids.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 02-01-2007, 10:46 AM   #138
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 12,964
Re: Annuities and their role in our investing plan

Hitler... :P
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 02-01-2007, 10:59 AM   #139
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Annuities and their role in our investing plan

Too late, he already suggested I take my leave.

Fortunately he lacks the troops to invade Poland.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 02-01-2007, 07:15 PM   #140
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
Re: Annuities and their role in our investing plan

I voted #2. I've just never seen the numbers make sense.

I still consider buying an annuity a sign of either financial illiteracy or mental incapacity.
__________________

__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Reply

« ETF | living trust? »

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
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


 

 
All times are GMT -6. The time now is 08:11 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.