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Old 07-22-2014, 07:10 AM   #21
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Your 8% return might be some interest and some principal returned to you. In my opinion annuities are bad investments.They also add bonus cash and that is mystery money, but on paper it looks like growth of principal. I have attended annuity sales lunches, just for the food. To listen to these sleezy salesman makes the hair on the back of my neck stand on end. All they want is there comission and when you sign the contract you agree to something you probably never read and if you did you didn't quite understand. The big money in annuities is selling them.
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Old 07-22-2014, 07:36 AM   #22
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Update: I am so blessed. It took forever but I finally surrendered my annuity. After surrender charges and other miscellaneous charges, I transferred $630K to Vanguard. I look at it as regaining control and making roughly 1.6% return per year since I put in $600K in April 2011. I just want to thank the smart members of this Board for all the great advice. My DH is on track to retire in April 2016 at 60.5, which is when our house will be fully paid for. We also plan to do the file and suspend at FRA. Thanks again to all of you. Have a great day!


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Unfortunately, a bear market is the annuity salesman's best friend.

For future reference, what were all of the "miscellaneous charges" and what was the surrender charge? How does what you finally received compare with the rosey predictions made by the VA salesman?

I am assuming from your comment that you made a grand 1.6% return on your money during one of the great bull runs of my lifetime.

I'm not wanting to beat up on you but this can be solid data to present to future posts talking about the great VA offer they have received.
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Old 07-23-2014, 06:35 PM   #23
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I'm somewhat in the same situation. My accountant recommended (and sold me) an annuity more than ten years ago. I made deposits totaling $150k and now have around a $220k balance. I'm trying to get out of this with the least amount of pain. I don't want to pay taxes on the gain, or penalties.

So I'm thinking just start taking an income stream and burn through this $ before any other assets now that I'm retired.

The company I bought the annuity from has not been helpful yet, and I've been approached by another financial advisor that suggests I roll it into an Allianz annuity. But this annuity has a payout supposedly for life.

I'm thinking getting my money out in ten years. He as on option for this as well, (looks like 3-4% return), but would rather see me in the Allianz long term product.

I know this is just an overview of the situation, but doesn't getting the money out in 10 years seem like the way to go? I haven't assessed the tax bite, penalties, etc if I just yank it out. And if I did now at a market peak, where would I put it that could get me more than the 4% that the 10 year annuity payout would give me?
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Old 07-23-2014, 07:58 PM   #24
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Most VAs are to be avoided, however, if you are in TIAA-CREF for retirement saving all their funds are strictly speaking Variable Annuities. They have expense ratios that are around 0.4%...not great, but there are far worse out there and you have complete freedom to move money and roll over funds without any fees. TIAA-CREF encourages you to annuitize a portion of your funds, but their fixed annuities are pretty good with lifetime payout rates of 8% for a single premium male starting at age 55. But I'm going to use TIAA-Traditional which guaranteed at least 3%, is currently paying 4.72% and you can get at your principal by doing equal payouts over 10 years...so it's a bit like a 10 year CD, not quite as safe, but a better interest rate and you can get at your money a bit quicker.
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Old 07-23-2014, 10:06 PM   #25
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Originally Posted by Ronstar View Post
I'm somewhat in the same situation. My accountant recommended (and sold me) an annuity more than ten years ago. I made deposits totaling $150k and now have around a $220k balance. I'm trying to get out of this with the least amount of pain. I don't want to pay taxes on the gain, or penalties. ....
How about a 1035 exchange to a Vanguard annuity of your choice?
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Old 07-24-2014, 12:25 AM   #26
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How about a 1035 exchange to a Vanguard annuity of your choice?

Thanks for the advice. I didn't know vanguard offered annuities. I'll look into it.


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Old 08-03-2014, 03:04 PM   #27
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Hi. I just found this site. Looking for some advice. I just retired and have a good nest egg. Currently I have the $s divided into 2 strategies...1 a typical diversified portfolio-50/40/10. The larger portion is a tactically managed dividend income interest portfolio.
I am 62...have enough cash for 3 years of spend so I wasnt hitting the $s for 3 years.
The nervous side of me is starting to think of getting a deferred annuity that can start in 3 years....sort of making sure that with SS and the annuity my essentials are covered for life....I wonder whether to have the major bulk of my $s in the market....maybe ladder the strategic $s into CDs?
Just looking for any assistance at this point
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Old 08-03-2014, 04:16 PM   #28
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2011 - $600K - $30K per year
2012 - $648K - $32.4K
2013 - $699K - $34.9K
2014 - $755K - $37.8K
Quote:
Originally Posted by ERPRECY View Post
Update: I am so blessed. It took forever but I finally surrendered my annuity. After surrender charges and other miscellaneous charges, I transferred $630K to Vanguard. I look at it as regaining control and making roughly 1.6% return per year since I put in $600K in April 2011. I just want to thank the smart members of this Board for all the great advice. My DH is on track to retire in April 2016 at 60.5, which is when our house will be fully paid for. We also plan to do the file and suspend at FRA. Thanks again to all of you. Have a great day!

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$630k is ~83.5% of $755k (the April 2014 value of your VA) or, $125k less. But, I agree that's not the best way to view this; what's done is done, and the choice is now btwn two future states. Another way to view this is, at ~60 yo you two have an ~35 yr horizon. To match the VA income in 2014 ($37.8k/yr), you'd need an annual nominal return on $630k of ~4.9%. In today's environment, that's probably a bit of a stretch "risk free" (read: same risk as the VA). But, you can probably get close and, this way you also have control of your own $$$, and there's substantial value in that.

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Look into claim and suspend on the SS once you are both 62

You claim and suspend your benefit
Spouse claims and suspends their benefit
then you claim spousal benefit on spouse (50% of benefit?)
and spouse claims spousal benefit on you (50% of benefit?)

Then at age 70, claim your larger benefit on yourself
If both spouses had similar earnings, this might look OK, if one spouse earned >>>> other spouse, then the 50% benefit on lower earning spouse might be a turn off

Might be an end run for tapping into assets sooner, with a higher income at age 70.
Careful with 'claim and suspend.' If you claim and suspend at 62, the surviving spouses benefit is forever discounted by the early claim (62 vs FRA) percentage. Whereas, if you 'claim and suspend' at FRA (~66 yo for you), the surviving spouse gets 100% of the age 70 amount.
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Old 08-03-2014, 04:42 PM   #29
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Hi. I just found this site. Looking for some advice. I just retired and have a good nest egg. Currently I have the $s divided into 2 strategies...1 a typical diversified portfolio-50/40/10. The larger portion is a tactically managed dividend income interest portfolio.
I am 62...have enough cash for 3 years of spend so I wasnt hitting the $s for 3 years.
The nervous side of me is starting to think of getting a deferred annuity that can start in 3 years....sort of making sure that with SS and the annuity my essentials are covered for life....I wonder whether to have the major bulk of my $s in the market....maybe ladder the strategic $s into CDs?
Just looking for any assistance at this point
You might want to start a new thread for this.

We need a better description of your portfolio to give any useful advice. The 50/40/10 portion sounds reasonable, though maybe high in equities if this is causing you stress already. The "larger portion", is it all dividend producing equities? That brings your equity percentage up considerably. You kind of want to get to a level that you can tolerate and not sell in a down market.

Is that "larger portion" being managed for you? At what cost? Your costs could be eating a lot of your dividend returns.

Simple annuities can provide some nice assurance for your basic spending needs. However, they are not required.

With 40% fixed income and 10% cash you have plenty of spending cushion if stocks crash. Just leave your stocks alone and spend down the cash and fixed income. There's a lot of safety there.

In general, it looks like carrying a big cash buffer just drags your portfolio gains down without providing a whole lot of risk benefit.

For your cash portion, a CD ladder might be good. An online savings account at 0.9% might be just as good or better. A stable value fund in a 401k can also be a great choice. Do either one, but I wouldn't let it sit doing nothing.
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Old 08-03-2014, 08:41 PM   #30
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You might want to start a new thread for this.
He's already posted the same question in this and another existing thread.

Hey, wfobrien--Animorph's point is good, you'll get more assistance if you post a fresh thread with your situation. And most of us read posts from all over this board, so there's no need to post duplicates in several places. Welcome to the board.
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