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
Annuities and their role in our investing plan
Old 01-29-2007, 10:18 AM   #1
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
Annuities and their role in our investing plan

So whats the actual opinion base on this investment option? Curious as to the level of "hostility" and unacceptance.

I voted #2.
__________________

__________________
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
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 01-29-2007, 10:29 AM   #2
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 4,005
Re: Annuities and their role in our investing plan

I'm with you CFB, number 2. I could imagine scenarios where I would prefer an annuity for part of my portfolio if the numbers worked.
__________________

__________________
justin is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-29-2007, 10:49 AM   #3
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

AM eagerly awaiting the results.............
__________________
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 01-29-2007, 10:55 AM   #4
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,617
Re: Annuities and their role in our investing plan

I've considered them-- in our situation the numbers don't make sense.
__________________
*
*

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 01-29-2007, 11:38 AM   #5
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

Maybe a little early to say for sure but it looks like 5% (at this time a single) lovers, 5% (also a single) haters and 90% open minded. Not exactly a board-wide hostility to the idea or really any significant hostility at all.

Pretty much the distribution I'd have expected to be honest.

Of course, having made the statement i've poisoned the future results as all the outliers will leap forward to vote while the mainstream will stroll on, feeling their position has already been stated. Or the wise guys will weigh in on one end or the other to make it 'funny'.

Polls are such fun.
__________________
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 01-29-2007, 11:39 AM   #6
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

By the way, you CAN vote for more than one option.

I way almost more interested in people who have actually bought one and what they're feelings were on them after the fact.
__________________
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 01-29-2007, 11:59 AM   #7
Recycles dryer sheets
 
Join Date: Mar 2006
Posts: 206
Re: Annuities and their role in our investing plan

I was going to buy a 10 year annuity to start my retirement but discovered that I could "self-annuitize" at a several thousand dollar advantage and that's the way I have gone. If the numbers made sense I'd do it but with current interest rate payout I can't see an advantage to me.
__________________
I'm trying to find myself.* Have you seen me anywhere today?
Mysto is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-29-2007, 12:06 PM   #8
Thinks s/he gets paid by the post
grumpy's Avatar
 
Join Date: Jul 2004
Posts: 1,321
Re: Annuities and their role in our investing plan

I have about 10% of my investments in a variable annuity. However, I did not buy this annuity, I inherited it. The surrender charge period had ended before my mother passed away and the investment had never been annuitized. Thus, I can withdraw funds without charges if I need to. The investment options available under the annuity are decent and the ability to continue tax deferred growth make it worth while to keep it. Despite the underlying fees, the annuity has gained value at an average annual rate of over 10% for the last 6 years. I am comfortable holding it even though I would not put any additional $'s into it or into any other annuity.

Grumpy
__________________
...you can check out any time you like, but you can never leave...
grumpy is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-29-2007, 12:17 PM   #9
Moderator
bssc's Avatar
 
Join Date: Dec 2005
Posts: 9,927
Re: Annuities and their role in our investing plan

I also voted 2.
__________________
Angels danced on the day that you were born.
bssc is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-29-2007, 12:55 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,278
Re: Annuities and their role in our investing plan

I plugged some numbers into the Vanguard instant quote. I was a bit surprised, this might make some sense for diversification purposes (assuming I understand it - I did not take the time to read all the fine print).

Me: age 52; DW; age 51. I chose joint with lifetime payments and CPI increases. I first entered zero guaranteed paid years and increased it until the annual payment started to drop a bit, that was (surprising to me, 30 years guaranteed).

A $500K payment would guarantee just under $20K annual (4%) inflation adjusted, minimum 30 year pay out. That is all I would plan to take out on my own- but this would trade the risk of outliving the withdraws with the lost opportunity to pass more to heirs. So, I wouldn't want to do it with the whole nest egg, but I think it could be worth considering for 1/3 or so?

Does that make sense? Vanguard is sure they can give me 4% and have money left over at the end (on average)? I guess they don't need to make much more - after all, they are playing with *my* money. But, they do need to come up with the 4% and CPI w/o consuming all the princple. Looking from the other side - I guess that makes 4% withdraws pretty safe, but this 'buys' you the pool of risk ('trades' would be a better word), rather than the single risk of outliving your stash, or a bad investment.

-ERD50

__________________
ERD50 is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-29-2007, 12:58 PM   #11
Thinks s/he gets paid by the post
 
Join Date: Apr 2006
Posts: 1,487
Re: Annuities and their role in our investing plan

at this point my spouse's health makes this a decision which is best delayed
__________________
d is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-29-2007, 01:01 PM   #12
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

ERD50 - you've sent me off to run some numbers. Last time I checked the very same thing you're looking at, the returns were closer to a 3.1-3.4% equivalent 'swr'.
__________________
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 01-29-2007, 01:15 PM   #13
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

I think the delta in our results may be the age difference. I put in a for a cpi indexed joint survivor, no guaranteed years and got a 3.1% 'rate'.

That leaves this temporarily on the "numbers dont work for me right now, but i'll look again next year" pile.
__________________
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 01-29-2007, 01:20 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,450
Re: Annuities and their role in our investing plan

I voted #2 like the rest of the group. However, a more interesting question would be when you do you consider the numbers to make sense? To which I would vote NEVER.
__________________
clifp is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-29-2007, 01:20 PM   #15
Thinks s/he gets paid by the post
 
Join Date: Jul 2003
Location: Pasadena CA
Posts: 2,695
Re: Annuities and their role in our investing plan

I was about to vote #2 because it is remotely possible that an annuity could be useful to someone. Then I looked at my circumstances, I expect a COLAd pension, so no annuity for me regardless of the numbers. I need to collect some assets for possible retirement projects/travel and hopefully to have something left for the kids. So #1 it is for me.
__________________
T.S. Eliot:
Old men ought to be explorers
yakers is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-29-2007, 01:28 PM   #16
Recycles dryer sheets
 
Join Date: May 2005
Posts: 438
Re: Annuities and their role in our investing plan

Useful as stable cash flow for my wife, assuming she survives me.
__________________
rmark is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-29-2007, 01:31 PM   #17
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 clifp
I voted #2 like the rest of the group. However, a more interesting question would be when you do you consider the numbers to make sense? To which I would vote NEVER.
So if annuity offers became available that were more attractive than most fixed income, and you had lots of relatives in their 90's, and you were in excellent health...still wouldnt go for it?
__________________
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 01-29-2007, 01:37 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,278
Re: Annuities and their role in our investing plan

Quote:
Originally Posted by Cute Fuzzy Bunny
I think the delta in our results may be the age difference. I put in a for a cpi indexed joint survivor, no guaranteed years and got a 3.1% 'rate'.

That leaves this temporarily on the "numbers dont work for me right now, but i'll look again next year" pile.
Yep, I think I will look again every few years. [wait a minute, be right back.....]

Well, through the 'magic' of computers, I just did that - I made myself 10 years younger (fudged my birth-date) and got about 3.4% with 30 yr guaranteed. I then made myself 10 years older (not as much fun), reduced the guarantee to 20 years, and I got about 4.4%.

I was also choosing the 'no cancelation' version - didn't try the other way to see what that did to the numbers.

Considering we might want to get more conservative with our money as we age, maybe this makes sense? Getting 4.4% plus CPI may be difficult? This might be one of those areas where a low cost annuity like Vanguard (not the high-fee, high commission types) is a reasonable pooling of risk. Most of us buy insurance on our house and consider it a reasonable trade-off. Maybe this is in the same bucket? I would still only consider a portion of the nest egg, and I would need to do a ton more work before committing that kind of money. An 'instant quote' is just ballpark talk.

Oh, and yakers makes a good point - but no COLA pension for me.

-ERD50
__________________
ERD50 is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-29-2007, 01:39 PM   #19
Full time employment: Posting here.
 
Join Date: Feb 2006
Posts: 987
Re: Annuities and their role in our investing plan

One of many articles on the subject:

http://money.cnn.com/2006/09/07/pf/r...ymag/index.htm

- Ron
__________________
rs0460a is offline   Reply With Quote
Re: Annuities and their role in our investing plan
Old 01-29-2007, 01:40 PM   #20
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

Just be aware that the actual insurer you are taking credit risk from is not Vanguard. IIRC, it is AIG. Better be comfy with that before you hand over a stack of Franklins.
__________________

__________________
"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
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 12:48 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.