Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Is it a bad time to buy a fixed annutity?
Old 10-12-2010, 01:17 PM   #1
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,834
Is it a bad time to buy a fixed annutity?

Just pondering 72 amounts and the interest rates are obviously terrible right now. Still I still have my principal. But what about if you want to buy a fixed annuity. I tried to find the rates that TIAA-CREF is using at the monent, but no luck. Will they also be ridiculously low so your nest egg will buy you very little.
__________________

__________________
nun 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 10-12-2010, 01:20 PM   #2
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
Quote:
Is it a bad time to buy a fixed annutity?
Well if you believe that interest rates are artificially low due to Fed manipulation - then yes. Buying now will cost you big time.

If you believe that we are in for many years of very low interest rates - then no now is as good a time as any to buy.

What's your guess as to where interest rates are going ?
__________________

__________________
MasterBlaster is offline   Reply With Quote
Old 10-12-2010, 01:20 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
As you can imagine, rates are low on everything. I guess I would buy a fixed annuity if I had to, but keep the term at 2 years or less. I would NOT buy a SPIA today unless I absolutely had no other choice...........
__________________
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
Old 10-12-2010, 02:12 PM   #4
Full time employment: Posting here.
 
Join Date: Nov 2009
Location: VA
Posts: 923
As mentioned above, fixed annuity rates are pretty low right now, 1.5-2.5% for annuities less than 4 years in length. 3.15-3.8% for longer term fixed annuities (5-10 years)
__________________
Disclaimer - I am an independent insurance agent. If the above message contains insurance-related content, it is NOT intended as advice, and may not be accurate, applicable or sufficient depending on specific circumstances. Don't rely on it for any purpose. I do encourage you to consult an independent agent for insurance-related advice if you have a question that is specific in nature.
dgoldenz is offline   Reply With Quote
Old 10-12-2010, 02:14 PM   #5
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
I there ever a good time to buy one?
__________________
73ss454 is offline   Reply With Quote
Old 10-12-2010, 02:22 PM   #6
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by 73ss454 View Post
I there ever a good time to buy one?
For the right circumstances and the right kind of annuity, I'd say yes. But this is a horrible time to buy an income stream, IMO, and I'd pretty much always run away screaming from many high fee variable annuities and equity-indexed junk. And of course there are people for whom annuities make no sense, just as it makes no sense for a single 80-year-old with no heirs to buy a whole life policy.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 10-12-2010, 02:29 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by 73ss454 View Post
I there ever a good time to buy one?
You would have LOVED your SPIA payments in the early 80's!!
__________________
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
Old 10-12-2010, 02:44 PM   #8
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
Quote:
Originally Posted by FinanceDude View Post
You would have LOVED your SPIA payments in the early 80's!!
Maybe but CD's rates were about 16%, so I would have gone in that direction.
__________________
73ss454 is offline   Reply With Quote
Old 10-12-2010, 03:46 PM   #9
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by 73ss454 View Post
Maybe but CD's rates were about 16%, so I would have gone in that direction.
Over a 30-year Treasury yielding 12%? Of course, that's only in hindsight as people were worried about MANY years of double-digit inflation ahead. Of course, as it turned out we only got that in health care...
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 10-12-2010, 05:29 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,959
Current low rates are a big factor as posts above state.

In addition, your net worth relative to the cost of the annuity at any given time is also an important consideration. This was discussed in a recent thread which might interest you Am I nuts?. Interest rates aside, waiting to purchase an annuity is preferable IMO.

If your net worth is far greater than the cost of the annuity, there's no hurry unless you're expecting rates to drop substantially. OTOH, if you net worth is already below the cost of an annuity, you've got some really tough decisions ahead.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 10-12-2010, 05:37 PM   #11
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Quote:
Originally Posted by 73ss454 View Post
I there ever a good time to buy one?
Yes, when you need one

It was the solution to my needs (everybody is different)...
__________________
rescueme is offline   Reply With Quote
Old 10-12-2010, 05:39 PM   #12
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Quote:
Originally Posted by Midpack View Post
...OTOH, if you net worth is already below the cost of an annuity, you've got some really tough decisions ahead.
In that case, how would you even purchase one?
__________________
rescueme is offline   Reply With Quote
Old 10-12-2010, 06:04 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,959
Quote:
Originally Posted by rescueme View Post
In that case, how would you even purchase one?
Might be smart to purchase a lesser annuity before you get even further behind the
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 10-12-2010, 06:10 PM   #14
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
Quote:
Originally Posted by rescueme View Post
Yes, when you need one

It was the solution to my needs (everybody is different)...
I'd rather have hemroids.
__________________
73ss454 is offline   Reply With Quote
Old 10-13-2010, 10:23 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by 73ss454 View Post
I'd rather have hemroids.
There's an annuity for that, too..........
__________________
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
Old 10-13-2010, 12:13 PM   #16
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
I'm sure!
__________________

__________________
73ss454 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
Is this a bad time to sell stuff on ebay? summer2007 Other topics 20 11-01-2008 09:51 AM
Is now (Jan 08) a bad time to buy BRKB? Sam Stock Picking and Market Strategy 5 01-17-2008 11:09 AM
Is now the time to buy NYX? AirJordan Stock Picking and Market Strategy 2 10-09-2007 04:13 PM
I know, it's bad to time the market, but... WM FIRE and Money 25 08-16-2007 10:10 AM
Is now a good or bad time for bond funds LA_Newsboy FIRE and Money 34 12-27-2003 09:23 AM

 

 
All times are GMT -6. The time now is 10:27 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.