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Old 08-23-2010, 12:54 PM   #41
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What's the opinion of TIAA-CREF annutites. They seem to have fees that are lower than most and aren't out there selling them door to door.
I'll say what I usually say: I think for the *right* situation, using an SPIA for *part* of your retirement income stream might make sense. It's basically like "buying a pension" with some of your retirement savings. However, they aren't for everybody, and right now annuitized payouts are horrible because interest rates are so low.

There's a chance I may consider an SPIA when the time comes, but I wouldn't do it with interest rates this low. The amount you have to pay for an income stream is particularly high right now.

I'm rarely a proponent of other annuity products -- even the lower-fee products -- except for some very specific and unusual situations usually involving estate planning or asset protection needs.

And in pretty much all cases, if it's an "equity indexed" annuity or some other gimmicky product that doesn't involve self-directed investing in low-cost mutual funds, RUN.
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Old 08-23-2010, 12:59 PM   #42
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What's the opinion of TIAA-CREF annutites. They seem to have fees that are lower than most and aren't out there selling them door to door.
They don't need to, they have a huge 403 business and all those are in annuities. They don't have any income or death benefit guarantees, so they are a lot like VG and Fido's offerings.

I have no problem with TIAA-Cref, other than they try to bully beneficiaries when the policy-holder dies..........
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Old 08-23-2010, 01:09 PM   #43
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I'll say what I usually say: I think for the *right* situation, using an SPIA for *part* of your retirement income stream might make sense. It's basically like "buying a pension" with some of your retirement savings. However, they aren't for everybody, and right now annuitized payouts are horrible because interest rates are so low.
Yes that's what I thought too, good time for mortgages, bad time to do a 72t or buy an annuity. I have about 10% of my retirement in a TIAA Traditional RA that this year is yielding 3.5% (the guaranteed minimum is 3%), so it's a plodder. I'm not sure if I'll annuitize it or take it out over 10 years, but it has worked well as part of my fixed income allocation.
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Old 08-27-2010, 06:51 AM   #44
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I was sold on a TIAA-CREF annuity for retirement instead of staying with the Florida Retirement System as were a few other of my friends. It was 15 years ago and we were misdirected by the rep on the comparison between the two and not all the cards were put on the table.

As a result, after 18 years in the school system, my pension with TIAA-CREF will be about $500/month with no cost of living increases whereas the FRS would have been $1500/month with cost of living increases.

I was recently told that I could buy back into the FRS but it would cost me an additional $130,000! If I did it would take me at least 8 or 9 years to recoup that money that I could have used in addition to the pension.

Needless to say I have been bamboozled and I am not a fan of TIAA-CREF.

Now I am trying to figure out what to do.

Cheers!
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anyone know an annuity with 10% income rollup?
Old 10-25-2010, 04:25 PM   #45
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anyone know an annuity with 10% income rollup?

I found a while back an annuity that claimed a 10% rollup for the INCOME VALUE with many, many restrictions. Does anyone remember the policy or the URL to that annuity? Much thanks.
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Old 10-25-2010, 04:26 PM   #46
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Old 10-25-2010, 04:30 PM   #47
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I found a while back an annuity that claimed a 10% rollup for the INCOME VALUE with many, many restrictions. Does anyone remember the policy or the URL to that annuity? Much thanks.
tjcooper
An annuity with 8% compounded on the income value would be better than a 10% fixed on the income value if you're looking more than a couple years out. Depends on the payout rate given what age you plan on withdrawing too. A lot of annuities have had rate decreases and lowered their guarantees with the dropping interest rates.
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URL did not have the information
Old 10-26-2010, 03:17 AM   #48
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URL did not have the information

73ss454
I looked at the "takemymoney" URL and used its search to look for a 10% rollup. I could not find anything close. Can you give the precise URL listing where it talks about that? Much thanks.

And yes, a 10% fixed under performs an 8% compounded rollup in about 3.5 years. It was not the 10% I was looking for, just the company that offered it. At 8% compounded, you can double your money in 10 years. My problem is that I will not have that long before I need to take the annual withdrawal from the annuity.
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Old 10-26-2010, 07:07 AM   #49
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73ss454
I looked at the "takemymoney" URL and used its search to look for a 10% rollup. I could not find anything close. Can you give the precise URL listing where it talks about that? Much thanks.

And yes, a 10% fixed under performs an 8% compounded rollup in about 3.5 years. It was not the 10% I was looking for, just the company that offered it. At 8% compounded, you can double your money in 10 years. My problem is that I will not have that long before I need to take the annual withdrawal from the annuity.
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How far out are you looking? The best product will depend on your age and how long you plan to defer before taking income. One company might pay out 5% at age 60 while another will pay out 5.5%. Makes a big difference on how much you receive each year. If you are looking within 3.5 years, an annuity with a larger bonus may make more sense than one with a higher roll-up.
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Old 10-26-2010, 10:49 AM   #50
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73ss454
I looked at the "takemymoney" URL and used its search to look for a 10% rollup. I could not find anything close. Can you give the precise URL listing where it talks about that? Much thanks.
I think the problem with your search for that annuity is the belief that 73ss454 was referring you to an annuity-search website...

He's telling you that what you seek either doesn't exist or is unlikely to be financially survivable from the insurance company claiming to sell it.

I wonder how Vanguard is doing with those guaranteed payout funds they were touting a few years ago.
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Old 10-26-2010, 11:04 AM   #51
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73ss454
I looked at the "takemymoney" URL and used its search to look for a 10% rollup. I could not find anything close. Can you give the precise URL listing where it talks about that? Much thanks.

And yes, a 10% fixed under performs an 8% compounded rollup in about 3.5 years. It was not the 10% I was looking for, just the company that offered it. At 8% compounded, you can double your money in 10 years. My problem is that I will not have that long before I need to take the annual withdrawal from the annuity.
tjcooper
10% rollup for 10 years is Nationwide, it is 2.5% simple interest per quarter, not compounded. It is an INCOME base growth, not contract value. Other companies like Prudential and Allianz compue things differently..........
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Old 10-26-2010, 11:25 AM   #52
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10% rollup for 10 years is Nationwide, it is 2.5% simple interest per quarter, not compounded. It is an INCOME base growth, not contract value. Other companies like Prudential and Allianz compue things differently..........
A company with a 20-30% income account bonus would do better than 10% annual simple or 2.5% quarterly simple if he intends to take income within the first few years. An agent should be able to find him the highest guaranteed payout based on his parameters. Too many variables to just figure on one company being the best.
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Old 10-26-2010, 01:00 PM   #53
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dgoldenz and others,
thanks for the info. I just wanted the Nationwide name to satisfy a "senior moment" because I had seen it and could not remember who had offered it.

I have spent a great deal of time getting the BPA12 into Excel form precisely where I can run that last 30 years of S&P500 thru it restarting it at various starting points to see how the Accumulation and Income Values do for averages, standard deviations, and mode. I am 64, want to work until I am 70 but with the job market, who knows. So I may need distributions in 2 years or 8 years depending on the job market. With the Free 10% withdrawal, I could probably make 10 years before guarenteed withdrawals start. The fact that BPA12 pays interest until the day of Free Withdrawal on that amount, makes a huge difference it the AV and IV if I put off as long as possible taking guarenteed withdrawal.

I have looked at MasterDex 5, MidLand equivalent, and several others. When you model the program and play real honest data through it based on various 10 year shots of the S&P500, there are huge differences in the outcomes. The interesting thing about the BPA12 is the no fees if no gain policy. It is very expensive in good years, yes. But in good years, you can do 12% to 25% and then trigger a Lock-In. In bad years, you gain nothing but pay nothing. That does not seem to match the other annunities.

dgoldenz, what is your real life experience tracking your customer's performance of various plans in the last 10 years? I am looking for an honest appraisal, not a sales pitch. From all the comments you have posted here, I think you are the kind of guy who will do the honest appraisal.
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Old 10-26-2010, 01:41 PM   #54
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dgoldenz and others,
thanks for the info. I just wanted the Nationwide name to satisfy a "senior moment" because I had seen it and could not remember who had offered it.

I have spent a great deal of time getting the BPA12 into Excel form precisely where I can run that last 30 years of S&P500 thru it restarting it at various starting points to see how the Accumulation and Income Values do for averages, standard deviations, and mode. I am 64, want to work until I am 70 but with the job market, who knows. So I may need distributions in 2 years or 8 years depending on the job market. With the Free 10% withdrawal, I could probably make 10 years before guarenteed withdrawals start. The fact that BPA12 pays interest until the day of Free Withdrawal on that amount, makes a huge difference it the AV and IV if I put off as long as possible taking guarenteed withdrawal.

I have looked at MasterDex 5, MidLand equivalent, and several others. When you model the program and play real honest data through it based on various 10 year shots of the S&P500, there are huge differences in the outcomes. The interesting thing about the BPA12 is the no fees if no gain policy. It is very expensive in good years, yes. But in good years, you can do 12% to 25% and then trigger a Lock-In. In bad years, you gain nothing but pay nothing. That does not seem to match the other annunities.

dgoldenz, what is your real life experience tracking your customer's performance of various plans in the last 10 years? I am looking for an honest appraisal, not a sales pitch. From all the comments you have posted here, I think you are the kind of guy who will do the honest appraisal.
tjcooper
Indexed annuities are a fairly new product, so there isn't really 10 years worth of tracking here. Caps on interest rates are also a lot lower now than they were 3-4 years ago, so that would make a substantial difference in overall performance. Of the clients we have done indexed annuities for, all of them have been very satisfied with them and no complaints. Those who bought a few years ago with 8-12% cap rates got the best deals. Now the cap rates are 3-6.5% for the most part and less attractive on an accumulation standpoint.

Seems like most people looking at indexed annuities right now are looking for products with the guaranteed income. Never been a fan of Allianz products, they are very confusing and the contract is like 160 pages, way longer than an indexed annuity contract should be. We did one with an income rider for a client with RBC last year and the contract was about 40 pages and easily readable for your average consumer.

Every annuity has some good and bad, you just have to be able to live with the bad in exchange for finding the good. Annuities with better guarantees or bonuses often have higher surrender charges or longer surrender periods. Annuities with shorter surrender periods have lower caps. Some have MVA's, some do not.

You should also make sure you're aware that taking money from the 10% free withdrawal also reduces your income account base, lowering your guaranteed payout whenever you start. If you are really looking for 6-10 years out, there are other annuities that might do better for you on a guaranteed basis. Really comes down to whether you want to trade off some of the guaranteed income for a product with higher cap rates or fixed interest rates. All of the caps/fixed rates are pretty low right now though.
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Old 10-26-2010, 01:59 PM   #55
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A good resource and a reasonably objective one on equity indexed annuities (which are filth, IMO) can ba found here: Library
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Old 10-26-2010, 02:02 PM   #56
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A good resource and a reasonably objective one on equity indexed annuities (which are filth, IMO) can ba found here: Library
Most of those articles are so old that they really don't have any bearing on what's out there today. The indexed annuity market has changed a lot in the last two years.
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Old 10-26-2010, 02:39 PM   #57
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A company with a 20-30% income account bonus would do better than 10% annual simple or 2.5% quarterly simple if he intends to take income within the first few years. An agent should be able to find him the highest guaranteed payout based on his parameters. Too many variables to just figure on one company being the best.
I was just answering his question, not advising him..........
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Old 10-26-2010, 02:43 PM   #58
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Most of those articles are so old that they really don't have any bearing on what's out there today. The indexed annuity market has changed a lot in the last two years.
Ay with NO surrender charges?
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Old 10-26-2010, 02:48 PM   #59
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Ay with NO surrender charges?
Sun Life had one about a year ago that was about 90% liquid after the first year with no surrender charge penalty, but they stopped selling it. Was a great product for those concerned about liquidity....other than that, none that I can think of without a surrender charge. Even straight fixed annuities have a surrender charge schedule.
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Old 10-26-2010, 02:59 PM   #60
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I wonder how Vanguard is doing with those guaranteed payout funds they were touting a few years ago.
I'm not sure, but I think you are referring to their Managed Payout Funds, where the payout is based on a percentage of the account value averaged over the previous 3 years. It hurt Vanguard to the extent that people's expectations were not met due to the market downturn at about the time the funds were released. Together the 3 funds have about 500 million in them.
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