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Is it a bad time to buy a fixed annutity?
10-12-2010, 12:17 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Feb 2006
Posts: 4,872
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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.
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10-12-2010, 12:20 PM
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#2
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,391
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 Quote:
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Is it a bad time to buy a fixed annutity?
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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 ?
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10-12-2010, 12:20 PM
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#3
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Give me a museum and I'll fill it. (Picasso)
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Join Date: Aug 2006
Posts: 12,483
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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...........
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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).......:)
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10-12-2010, 01:12 PM
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#4
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Full time employment: Posting here.
Join Date: Nov 2009
Location: VA
Posts: 923
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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)
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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.
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10-12-2010, 01:14 PM
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#5
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Join Date: Oct 2004
Location: LaLa Land
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I there ever a good time to buy one?
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10-12-2010, 01:22 PM
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#6
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Quote:
Originally Posted by 73ss454
I there ever a good time to buy one?
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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.
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"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)
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10-12-2010, 01:29 PM
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#7
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Give me a museum and I'll fill it. (Picasso)
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Quote:
Originally Posted by 73ss454
I there ever a good time to buy one?
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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.........:)
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10-12-2010, 01:44 PM
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#8
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Thinks s/he gets paid by the post
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Maybe but CD's rates were about 16%, so I would have gone in that direction. 
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10-12-2010, 02:46 PM
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#9
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Give me a museum and I'll fill it. (Picasso)
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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)
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10-12-2010, 04:29 PM
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#10
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Give me a museum and I'll fill it. (Picasso)
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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 http://www.early-retirement.org/foru...uts-52412.html. 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.
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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: 50% equity funds / 45% bonds / 5% cash
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10-12-2010, 04:37 PM
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#11
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gone traveling
Join Date: Apr 2009
Location: Eastern PA
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Quote:
Originally Posted by 73ss454
I there ever a good time to buy one?
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Yes, when you need one
It was the solution to my needs (everybody is different)...
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10-12-2010, 04:39 PM
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#12
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gone traveling
Join Date: Apr 2009
Location: Eastern PA
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Quote:
Originally Posted by Midpack
...OTOH, if you net worth is already below the cost of an annuity, you've got some really tough decisions ahead.
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In that case, how would you even purchase one?
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10-12-2010, 05:04 PM
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#13
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Give me a museum and I'll fill it. (Picasso)
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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: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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10-12-2010, 05:10 PM
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#14
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Thinks s/he gets paid by the post
Join Date: Oct 2004
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Quote:
Originally Posted by rescueme
Yes, when you need one
It was the solution to my needs (everybody is different)... |
I'd rather have hemroids. 
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10-13-2010, 09:23 AM
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#15
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Give me a museum and I'll fill it. (Picasso)
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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.........:)
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10-13-2010, 11:13 AM
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#16
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Thinks s/he gets paid by the post
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I'm sure!
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