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Aviva Balanced Allocation Annuity - Buy or Run?
Old 08-26-2012, 06:41 PM   #1
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Aviva Balanced Allocation Annuity - Buy or Run?

I retired with ~34 years pension credit and have a defined benefit pension. I still have some money sitting in a deferred comp that I can't touch for 8 years. We went to a presentation that ended up offering the Aviva / Annexus Balanced Allocation Annuity.

A friend of ours looked over the sales brochure and basically said run. I don't need the extra income today but I also don't know what to do with the deferred comp balance. It's split as follows:
Dodge & Cox Stock 16%
Fidelity Contrafund 22%
PIMCO Total Return 14%
Vanguard Cap Opportunity 10%
Vanguard Internat'l Growth 17%
Guaranteed Return (2.75% Return 2nd Qtr) 21%

So, is this a good option or should I run?

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Old 08-26-2012, 06:51 PM   #2
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Why not just stay the course in the funds you cite above. I'm guessing that the annuity has significant fees associated with it.

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Old 08-26-2012, 06:53 PM   #3
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Run from this annuity. If for some reason you find the whole idea compelling, you can do it yourself in 15 minutes and for like 1/1000th of the cost. Details here: Life, Investments & Everything: Rolling Your Own
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Old 08-26-2012, 07:11 PM   #4
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Run away. If you can't run, then walk away. If you can't walk, crawl away. If you can't crawl, beg someone to drag you away...
Numbers is hard

Although rare, it is possible to read something on this forum you don't agree with and simply move on with your life

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Old 08-26-2012, 07:53 PM   #5
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Originally Posted by brewer12345 View Post
Run from this annuity.
Originally Posted by REWahoo View Post
Run away. If you can't run, then walk away. If you can't walk, crawl away. If you can't crawl, beg someone to drag you away...
I'm sensing some ambivalence and uncertainty here. If you guys can't stop sugar-coating your wishy-washy advice and start telling the poster the way it really is, then maybe we should get some annuity sales staff in here to explain how this innovative, attractive, and affordable* product works...

* "Innovative, attractive, and affordable" for the annuity sales staff compensation plan.

I wish these prospectuses had better summaries in a 150-point font like:
Expected total return = 5%
Expense ratio = 3.5%
Your after-tax return = 1.1%

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Old 08-27-2012, 08:17 AM   #6
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My most basic rule of investing is to never put money in anything I don't completely understand. Since you started by having a friend look at the sales brochure (why did they give you a sales brochure instead of a detailed prospectus?), it's probably not immediately obvious what all the details are.

Just based on what you posted, I don't even understand this line:
Guaranteed Return (2.75% Return 2nd Qtr) 21%
What does that mean?

Basically, SOME annuities can be good options for SOME people at SOME times.

Unless you're sure you and the annuity are in one of those groups, they are PROBABLY not good for you.

I thought growing old would take longer.
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