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Annuity Opinions Needed
Old 10-16-2008, 10:19 AM   #1
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Annuity Opinions Needed

Many years ago, before we knew better, the hubby and I bought a deferred variable annuity. It has done quite well, in spite of the exorbitant fees, but we are now at the point where we would like to protect the balance. There is a very low (under 2%, after fees) fixed cash option in our current annuity.

We are considering doing a 1035 exchange to a fixed annuity. We don't need the income and we don't want to lock in payments when we are close to RMDs for the hubby, so we are not in the market for an immediate annuity.

Fidelity has a MetLife 10 years fixed paying 6.75%. This sounds like a darn good deal to me right now. We are approaching this as similar to buying a 10 year CD.

My main concern is the financial health of MetLife. I would appreciate any feedback.
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Old 10-16-2008, 02:38 PM   #2
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there is a lively discussion going on here:
One more time, variable annuities....

i know there are a lot of other threads about annuities from the past also. good luck!
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Old 10-16-2008, 02:46 PM   #3
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I believe that Vanguard has a low cost annuityissued thru AIG that may interest you. Try vanguard.com.
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Old 10-16-2008, 03:54 PM   #4
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Yeah, get it from AIG the big shots need a weekend at the spa again.
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Old 10-16-2008, 04:04 PM   #5
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I looked at Vanguard's fixed annuities, but they're only paying 4.4%. I would really like to get a little better rate, if I can.
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Old 10-16-2008, 05:47 PM   #6
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If you get an annuity, get something low in fees and keep your dollar amounts safely below the state insurance limits with any one company. It's not as good as FDIC (like a CD) but it's better than nothing.

In calculating the payout, there's a big difference between the internal interest rate of the annuity and the payout. Make sure the principle and payments are included in the figures you're given so you can do a NPV on the total investment.

Without seeing the details, a 6+% interest rate in today's environment has got to include significant risk or slight of hand.
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Old 10-16-2008, 07:31 PM   #7
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2B, this is a 10 year fixed annuity, with a net return of 6.75%. I agree that it sounds too good to be true, but we have already talked with Fidelity, and they confirmed that it is what they refer to as a "CD type" annuity.

We don't need the income, so we would just let it accrue for the 10 year period. We could then renew for a one year period, buy a new product, or annuitize if we needed to.

My main concern is with the safety of MetLife, since they are the issuing company.
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Old 10-16-2008, 07:37 PM   #8
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Quote:
Originally Posted by Gail View Post

My main concern is with the safety of MetLife, since they are the issuing company.
You might be interested in this: Immediate Annuities
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Old 10-16-2008, 07:57 PM   #9
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2B, this is a 10 year fixed annuity, with a net return of 6.75%. I agree that it sounds too good to be true, but we have already talked with Fidelity, and they confirmed that it is what they refer to as a "CD type" annuity.

We don't need the income, so we would just let it accrue for the 10 year period. We could then renew for a one year period, buy a new product, or annuitize if we needed to.

My main concern is with the safety of MetLife, since they are the issuing company.

This strikes me also as too good to be true also, so.....Im curious that your 1st concern is the safety of Metlife. I have a lot of insurance with them through my employer. I can't fathom how they could do something that much better than everybody else if it really is the same product.

If it really is like a CD with full return of principal in 10yrs...........and pays 6.75 apr.........where do I sign up?
(but the voice in my head keeps saying Impossible!!!)
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Old 10-16-2008, 08:03 PM   #10
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This strikes me also as too good to be true also, so.....Im curious that your 1st concern is the safety of Metlife. I have a lot of insurance with them through my employer. I can't fathom how they could do something that much better than everybody else if it really is the same product.

If it really is like a CD with full return of principal in 10yrs...........and pays 6.75 apr.........where do I sign up?
(but the voice in my head keeps saying Impossible!!!)
Go to Fidelity.com and look at their fixed annuities. You have to put your state in, and they will tell you what is available. As I said, we talked to a Fidelity rep this afternoon, and, unless we are missing something incredibly obvious, this looks like a great deal.

We have so few choices in what we can do inside our current annuity, which is one of the main reasons I would advise anybody not to buy a deferred variable annuity in the first place!
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Old 10-16-2008, 08:03 PM   #11
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Gail, I would suggest you get and read the fine print very carefully. It is highly likely that the 6.75% rate you are being quoted is either an outright teaser or is not fixed for the entire life of the contract. This is pretty common in the fixed annuity world, as I understand things.

I wouldn't spend a lot of time worrying about being impaired as a metlife policyholder, personally.
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Old 10-16-2008, 08:56 PM   #12
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Go to Fidelity.com and look at their fixed annuities. You have to put your state in, and they will tell you what is available. As I said, we talked to a Fidelity rep this afternoon, and, unless we are missing something incredibly obvious, this looks like a great deal.

We have so few choices in what we can do inside our current annuity, which is one of the main reasons I would advise anybody not to buy a deferred variable annuity in the first place!
Gail
I don't know alot about annuities, but I am trying to learn. As a matter of fact I have already looked at the rates on the Fidelity site, but there are so many different types of annuities and I don't know which type would compare to the Metlife quote you have.

I do know that annuity payments <may> include 'return of principal' which makes the interest calculation much different from a CD interest rate calculation. All CD principal is returned when it matures. I never heard of a CD-type annuity and I wonder if the name is misleading.
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Old 10-16-2008, 09:03 PM   #13
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go to fidelity.com and look at their fixed annuities. You have to put your state in, and they will tell you what is available. As i said, we talked to a fidelity rep this afternoon, and, unless we are missing something incredibly obvious, this looks like a great deal.

We have so few choices in what we can do inside our current annuity, which is one of the main reasons i would advise anybody not to buy a deferred variable annuity in the first place!
Gail... Interesting... Not sure why it's so much higher than others:confused:

Metlife.JPG

Metlife Rating.JPG
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Old 10-16-2008, 09:27 PM   #14
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So, if I understand this correctly, the Metlife annuity quote Gail cited is available from Fidelity?

In my state of Maryland, the best 10 yr rate quoted on the Fidelity site is 4%.
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Old 10-16-2008, 10:02 PM   #15
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So, if I understand this correctly, the Metlife annuity quote Gail cited is available from Fidelity?

In my state of Maryland, the best 10 yr rate quoted on the Fidelity site is 4%.
Yes, that's the way I see it. In my earlier post I chopped off the ref to Fidelity

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Old 10-16-2008, 10:12 PM   #16
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2B, this is a 10 year fixed annuity, with a net return of 6.75%. I agree that it sounds too good to be true, but we have already talked with Fidelity, and they confirmed that it is what they refer to as a "CD type" annuity.

We don't need the income, so we would just let it accrue for the 10 year period. We could then renew for a one year period, buy a new product, or annuitize if we needed to.

My main concern is with the safety of MetLife, since they are the issuing company.
MetLife is one of the strongest carrirs there is. I would stay away from AIG at this time..........
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Old 10-17-2008, 08:26 AM   #17
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Thanks for the feedback, everyone.

So far, I seem to be hearing that I don't need to worry any more or less about MetLife than about the annuity company we are currently with, so that's a plus. We would save a bundle just on fees by moving.

Fidelity is mailing us a prospectus, which we will thoroughly read. If that backs up what we have read and been told by Fidelity, then I think this makes a lot of sense for us. This is part of our fixed income investments, and we can't even come close to this type of yield anywhere else.
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Old 10-17-2008, 08:49 AM   #18
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MetLife is one of the strongest carrirs there is. I would stay away from AIG at this time..........
do you have a good link for finding MetLife's overall ratings? my fixed annuity is with them. i went to Weissratings.com and got nowhere fast (user error most likely ). thanks!
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Old 10-17-2008, 09:09 AM   #19
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do you have a good link for finding MetLife's overall ratings? my fixed annuity is with them. i went to Weissratings.com and got nowhere fast (user error most likely ). thanks!

MetLife Ratings
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Old 10-18-2008, 05:03 PM   #20
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Tell me more! I guess it's not to good to be true afterall. Curious nothing anywhere near that rate is available to me in MD, but I never heard of a CD annuity before. I did a search and found a definition that a CD-type annuity is a fixed annuity that pays a fixed rate for a term equal to the surrender period....now what I am trying to understand is whether the rate is calculated like a CD rate, or some other way? Can the withdrawal phase be deferred for the full 10 yrs, or is it like an immediate annuity that pays out over 10 yrs and there's no principal left at the end?
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