Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Banks Peddling Annuities
Old 04-23-2011, 01:27 PM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
Banks Peddling Annuities

Anyone notice how banks have begun peddling insurance products.

Seems like many of them are pushing fixed annuities as an alternative to CDs.

They must be getting fees from insurance companies.
__________________

__________________
chinaco 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!

Old 04-23-2011, 01:35 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
bbbamI's Avatar
 
Join Date: Dec 2006
Location: Dallas 'burb
Posts: 9,039
Yes, our bank tried to do that to us a few months ago. They said they could offer us a great rate on a CD.

It was an annuity. They kept trying to gloss over it calling it everything but an annuity. But if it walks, talks, looks....you get my meaning.
__________________

__________________
There's no need to complicate, our time is short..
bbbamI is offline   Reply With Quote
Old 04-23-2011, 01:51 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
freebird5825's Avatar
 
Join Date: Feb 2008
Location: East Nowhere, 43N Latitude, NY
Posts: 9,017
I don't do business with traditional banks. However, my credit union keeps sending me these silly letters offering me the "opportunity" to upgrade a basic accidental death/dismemberment policy that is free to members. I just toss the letter into the junk mail burning pile.

After 20+ years of being a share holder, I'm still waiting for my free toaster.
__________________
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
freebird5825 is offline   Reply With Quote
Old 04-23-2011, 01:58 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by chinaco View Post
Anyone notice how banks have begun peddling insurance products.
This spills over to credit unions as well. And it's worse in the sense that the credit union sponsor (business, union, professional association, etc.) is tacitly implicated as endorcing the annuity.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 04-23-2011, 02:26 PM   #5
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Quote:
Originally Posted by freebird5825 View Post
However, my credit union keeps sending me these silly letters offering me the "opportunity" to upgrade a basic accidental death/dismemberment policy that is free to members.
Your CU must be owned by AARP ...
__________________
rescueme is offline   Reply With Quote
Old 04-23-2011, 02:34 PM   #6
Thinks s/he gets paid by the post
Free To Canoe's Avatar
 
Join Date: May 2008
Location: Cooksburg,PA
Posts: 1,738
I was doing the low income property tax rebate for my Moher the other day.
I noticed that her CD interest tax document was a 1099-R and not the normal 1099-Int. Ut Oh!
Couple that with the fact that she was bragging about the 5 and 7% "interest rate" and...
I think the nice, well dressed man at the bank took the old lady's money.

It could be that an annuity is the best thing for her at this point in her life. I should have thought ahead and had that talk with her. She is not quite all there in the mind and I am sure that she thinks that her children will be inhereting those CDs.

Better to not tell her or to tell her? I may know more next week when I go down to her place and finish the rebate form.
__________________
Free to canoe
Free To Canoe is online now   Reply With Quote
Old 04-23-2011, 02:37 PM   #7
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,156
Quote:
Originally Posted by Free To Canoe View Post
Better to not tell her or to tell her?
You know your mom better than we do, but if "She is not quite all there in the mind..." why would you take the chance on stressing her unnecessarily by telling her? My vote is to say nothing.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 04-23-2011, 04:40 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,451
Quote:
Originally Posted by REWahoo View Post
You know your mom better than we do, but if "She is not quite all there in the mind..." why would you take the chance on stressing her unnecessarily by telling her? My vote is to say nothing.
I think it is important that kids have facts of life conversation about money with their aging parents.

"There are a lot of shysters out their that take advantage on the poor eyesight and poor hearing that many seniors have. They'll tell you that are getting 7% interest rate on the CD, but buried in the fine print that you probably can't read and filled with legal jargon is something different. Mom please in the future make sure to take to me before signing up for any of theses CD or other investments."

She might be offended or a bit stressed but I'd rather see that than having her get taken by annuity salesman.
__________________
clifp is offline   Reply With Quote
Old 04-23-2011, 04:57 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
braumeister's Avatar
 
Join Date: Feb 2010
Location: Northern Kentucky
Posts: 8,638
When my mother reached her 80th birthday, she asked me if I would be willing to take care of her finances, since she just didn't have the energy for it any more. She didn't have much, just enough to live on, with a small cushion. The only things she ever invested in were municipal bonds and CDs.

I though that was a good decision, so we put everything into JTWROS accounts, and I began to handle everything for her. She was very relieved to not have to worry about money.

I tried to be a good steward, and now, 15 years later, her accounts still allow her to get by, with a small cushion. Her expenses are far higher now, in an Alzheimer's assisted living facility (which is great, by the way), but I've been able to keep her finances OK.

If anyone is trying to deal with this situation, I would recommend bringing up the thought of how much effort it is to keep up with your money. That might be the key issue.
__________________
Pas de lieu Rhône que nous.
braumeister is online now   Reply With Quote
Old 04-23-2011, 05:12 PM   #10
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,156
Quote:
Originally Posted by clifp View Post
I think it is important that kids have facts of life conversation about money with their aging parents.

"There are a lot of shysters out their that take advantage on the poor eyesight and poor hearing that many seniors have. They'll tell you that are getting 7% interest rate on the CD, but buried in the fine print that you probably can't read and filled with legal jargon is something different. Mom please in the future make sure to take to me before signing up for any of theses CD or other investments."
Clif, I completely agree.

I interpreted Free to Canoe's post to be an after-the-fact question. The way I read it, his mom had already purchased an annuity and probably didn't know it. That was the basis for my comment.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 04-23-2011, 06:23 PM   #11
Thinks s/he gets paid by the post
Free To Canoe's Avatar
 
Join Date: May 2008
Location: Cooksburg,PA
Posts: 1,738
I appreciate the input. I think that it is after the fact.
When you are not all there, it is easy to use a play on words to confuse. She is beyond "reading fine print". In her younger days such a deception would not have been possible. She handled all of the finances during my childhood days.
She has resisted my efforts to "help". I wanted to get joint on the checking just so I could check in on things. No dice.
The takeaway for others might be "the facts of senior life" for seniors with just CDs in this low interest rate environment.
__________________
Free to canoe
Free To Canoe is online now   Reply With Quote
Old 04-23-2011, 06:51 PM   #12
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 291
An employee at the bank chased me to my car pushing annuities. Will avoid going to the bank in future; everything online forevermore...... Free to Canoe, best of luck with your mother. When our aging parents don't want our help, it's tricky at best.
__________________
bubba is offline   Reply With Quote
Old 04-23-2011, 07:38 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
braumeister's Avatar
 
Join Date: Feb 2010
Location: Northern Kentucky
Posts: 8,638
Quote:
Originally Posted by Free To Canoe View Post
She has resisted my efforts to "help". I wanted to get joint on the checking just so I could check in on things. No dice.
That seems to be pretty much the norm.

When Mom was in a regular retirement place, she said she didn't know a single person there who would allow their kids to even know about their finances.

The result was that as their mental facilities diminished, so did their nest eggs, and they were moving out all the time due to inability to make the monthly payments, frequently to move in with relatives who were less than thrilled about the prospect.

If joint accounts are unpalatable, there is at least the option of making accounts "payable on death" to a designated beneficiary. You could perhaps sell that idea by pointing out that a POD account would simplify things.
__________________
Pas de lieu Rhône que nous.
braumeister is online now   Reply With Quote
Old 04-23-2011, 08:01 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Dawg52's Avatar
 
Join Date: Feb 2005
Location: Central MS/Orange Beach, AL
Posts: 7,446
Nope, haven't had a bank or anyone try to sell me an annuity.
__________________
Retired 3/31/2007@52
Full time wuss.......
Dawg52 is offline   Reply With Quote
Old 04-23-2011, 09:08 PM   #15
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
Quote:
Originally Posted by braumeister View Post
She was very relieved to not have to worry about money.
If anyone is trying to deal with this situation, I would recommend bringing up the thought of how much effort it is to keep up with your money. That might be the key issue.
Back in Dec 2009, despite my Dad's clear dementia problems, he adamantly refused all assistance. He didn't want our help, he didn't want paid help, he didn't want to waste any more time on doctors, he especially didn't want to do POAs. He made it another 14 months but, judging from his bank and his credit-card records, his mental acuity declined rapidly during the 15th month and he ended up in the hospital ER.

During the week I visited him in the surgical ward, he just wanted to leave. (Hard to blame him for feeling that way.) When I brought him a suitcase of clothes & toiletries, he decided he was on a business trip and kept packing to check out of the hotel and go home. (Which got him labeled a "wanderer".) He couldn't even remember how to operate his CD player, but he wanted to resume his independent life and be back in charge of things. Every time I brought it up his resistance hardened, so I just kept changing the subject.

On the day before he was discharged to a skilled nursing facility, I brought in the utility bills with (filled-out) checks for him to sign. When he saw how quickly we got through the pile of paperwork (hey, I'd had a tour on an admiral's staff) he broke down in tears and said that he'd been having a terrible time taking care of his affairs. When he got to the SNF and realized that they'd prep his meals and do his laundry, he decided that he would stay there for the rest of his life.

I think giving up that control is so hard that most parents don't even know how to do it. But when they do, the relief is immense. The trick is helping them get over that first hurdle of accepting help.

Quote:
Originally Posted by Dawg52 View Post
Nope, haven't had a bank or anyone try to sell me an annuity.
So to the bankers you don't look old enough, inattentive enough, or presbyopic enough...
__________________
*
*

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
Old 04-24-2011, 10:01 AM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Dawg52's Avatar
 
Join Date: Feb 2005
Location: Central MS/Orange Beach, AL
Posts: 7,446
Quote:
Originally Posted by Nords View Post
So to the bankers you don't look old enough, inattentive enough, or presbyopic enough...
No, they just know I don't have enough money to waste their time on.
__________________
Retired 3/31/2007@52
Full time wuss.......
Dawg52 is offline   Reply With Quote
Old 04-24-2011, 02:49 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
braumeister's Avatar
 
Join Date: Feb 2010
Location: Northern Kentucky
Posts: 8,638
Quote:
Originally Posted by Nords View Post
During the week I visited him in the surgical ward, he just wanted to leave. (Hard to blame him for feeling that way.)
Reminds me of a poignant moment recently with my mom. After independent living, independent retirement community, assisted living, and now Alzheimer's assisted living, she has been through a lot in the last few years. Each new place got the same reaction: "Get me out of here."

Last week, during the conversation, she said "I just want to get out of here."
Knowing that she realizes that she is in a really good place and there are no alternatives, I asked where she wanted to go.
She answered "Heaven."
Stopped me in my tracks.
__________________
Pas de lieu Rhône que nous.
braumeister is online now   Reply With Quote
Annuities vs. Stocks For Retirement Income
Old 04-24-2011, 06:56 PM   #18
Confused about dryer sheets
 
Join Date: Aug 2010
Posts: 1
Annuities vs. Stocks For Retirement Income

I think that annuities are a good option for retired persons for
no more than 25-30% of your assets.

I do like dividend stocks more than annuities for the following reasons.

Dividend stocks can be sold in case of emergency. If you invest in solid companies that pay 4-5% dividends, then why lose the principal amount with an immediate annuity? You can get the same return with a high paying dividend stock and have the ability to sell the principal holding any time you want. This is why I recommend 30% immediate annuity, 30% stock dividends, and 40 percent in cash/bonds/CD's. For those who aren't stock market savy, you can put money in index funds instead of individual stocks and sell 4% every year to make up for the dividends.

You should never hold all your eggs in one basket. Interest rates will increase dramatically in the future, so CD's will be ok in a few years out.

Remember, safety and peace of mind are important in retirement. Don't lose everything because you want to goose your returns a few percentage points.

Good luck to everyone.
Dave
__________________
381966 is offline   Reply With Quote
Old 04-24-2011, 07:29 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,820
Quote:
Originally Posted by Free To Canoe View Post
I was doing the low income property tax rebate for my Moher the other day.
I noticed that her CD interest tax document was a 1099-R and not the normal 1099-Int. Ut Oh!
Couple that with the fact that she was bragging about the 5 and 7% "interest rate" and...
I think the nice, well dressed man at the bank took the old lady's money.

It could be that an annuity is the best thing for her at this point in her life. I should have thought ahead and had that talk with her. She is not quite all there in the mind and I am sure that she thinks that her children will be inhereting those CDs.

Better to not tell her or to tell her? I may know more next week when I go down to her place and finish the rebate form.
If it's an annuity, the agent has an obligation to deliver a physical contract. You could look around and see if she has one and what it says.

You could call the bank, tell them you're working on your Mom's taxes and would like some information on where this 1099-R came from. You've got her SSN and birthdate, that may be enough to get you at least some general information.

Or you could go into the bank and look around for the "investment" office. If it's an annuity, the person who sold it has an insurance license he doesn't want to lose. He might be willing to provide some information.

But, I'd look for the contract first.
__________________
Independent is offline   Reply With Quote
Old 04-24-2011, 07:44 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Fixed annuities have a 30-day "free look" policy. That means you have 30 days AFTER physical delivery of the policy to return it and it is null and void. Just a little FYI, banks have been selling fixed annuities for 40 years or so!!
__________________

__________________
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
Reply


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


Similar Threads
Thread Thread Starter Forum Replies Last Post
Banks Canadian Grunt FIRE and Money 10 09-15-2008 09:53 AM
Banks Ain't What They Used to Be tangomonster Other topics 13 02-06-2008 10:36 PM
University Peddling Credit Cards TromboneAl Other topics 8 07-01-2007 08:28 PM
help! friend peddling WFG and VUL's bright eyed Young Dreamers 41 01-30-2007 10:19 PM
What are the Banks thinking? ESRBob Other topics 4 12-20-2004 06:38 AM

 

 
All times are GMT -6. The time now is 02:47 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.