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Old 10-28-2016, 03:51 PM   #21
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We took our pensions as annuities and have CD and TIPS ladders as a part of our portfolio. I am not against annuities myself, but for our portfolio I find them more appealing to buy when we are older and the prices are cheaper and then using them as a form of longevity insurance.
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Old 10-28-2016, 04:01 PM   #22
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Are you sure about that 3%? Looks high in comparison to these SPDAs from Fidelity. Usually CDs and bonds and annuities returns are within similar range and I'm not aware of any 5 year 3% money out there though Andrews CU is offering a 7 year, 3% IRA CD.

Guaranteed Rates for Tax-Deferred Fixed Annuities (SPDAs) Available Through Fidelity

Sentinel Security Life
Personal Choice Annuity 5 (MVA)5 yrs.$2,500 min 3.00 %apy B++ - See more at: https://www.immediateannuities.com/d....NEH9HHTL.dpuf


The early withdrawal penalty on the Andrews 7yr CD is only 6 months so it would still earn 2.74 if you early withdraw after 5 yrs and they allow partial withdrawals so it may be a good substitute for a CD ladder.
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Old 10-28-2016, 04:05 PM   #23
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Sentinel Security Life
Personal Choice Annuity 5 (MVA)5 yrs.$2,500 min 3.00 %apy B++ - See more at: https://www.immediateannuities.com/d....NEH9HHTL.dpuf


The early withdrawal penalty on the Andrews 7yr CD is only 6 months so it would still earn 2.74 if you early withdraw after 5 yrs and they allow partial withdrawals so it may be a good substitute for a CD ladder.
Be careful. The surrender charges are steep if you want your money before the 5 years is up and there is a market value adjustment as well.

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The early surrender charges only apply to withdrawals which are greater than the annual accrued interest amount. You can always withdraw the annual accrued interest penalty-free. If surrender charges apply, they start at 9% and decline to 0% after the 5th year. The schedule is 9%, 8%, 7%, 6%, 5%, 0%.
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Old 10-28-2016, 04:14 PM   #24
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Also, bbb rated by A.M. Best. Sounds fine for your money but my money ain't getting anywhere near a bbb company.
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Old 10-28-2016, 04:49 PM   #25
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Be careful. The surrender charges are steep if you want your money before the 5 years is up and there is a market value adjustment as well.
I'm not suggesting to buy or not to buy this. I am waiting to see how things look next April. The surrender charges must be taken into consideration and the insurer has decent but not top notch ratings as you mentioned. Most of these products do offer 10%/yr withdrawals with no surrender charge. The higher rated insurance companies have rates in the 2-2.3 range so very comparable to the online bank CD rates.
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Old 10-29-2016, 09:01 AM   #26
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I the UK the current payout rate for a fixed single life annuity bought by a 65 year old is 4.8%. That is an IRR for someone who lives to 85 of -0.4%. So most people would be better off just leaving the money in the bank and a 5 year CD ladder would be even better and just as safe.

Most people buying a lifetime annuity at current rates are either a fools or expect to live to 100. However, TIAA are still giving good value. As an example I have a TIAA-Traditional account that currently pays 4.8% interest. I recently got a quote for an annuity and the payout rate was 6.5% which implies a 4.8% rate of return for a 55 year old living another 30 years. Those numbers won't convince many people on here, but they are better than you'd get most other places.
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Old 10-29-2016, 10:34 AM   #27
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When I am in my 80's (I'm 70 now), I'm not really sure if I want to deal with my finances. So for me, a TIAA annuity made perfect sense. I still have some investments and a good bank account as a back up, but I trust this insurance company. I've been with them as an investor since 1973, as have a lot of other educators and researchers.

I'd be hesitant about purchasing an annuity if I had not experienced TIAA all these years. However, a high level of trust has been established, and those many educators who are doing exactly what I'm doing can't all be wrong.

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Old 10-29-2016, 10:56 AM   #28
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I've long been a believer in SPIA's and have made significant commitments to them beginning at about age 71. From the time I was age 71 through about age 77 (I'm 78 now) I purchased eleven SPIA's. On nine of them I delayed the initial payment by one year from purchase. The other two are similar to QLAC's, although they were purchased before QLAC's were permitted with one beginning at age 85 and the other at age 86. Total premiums were in low seven figures.

I'm currently receiving in annuity payments 9.5% of my initial premiums on the first nine and when I eventually receive payments on the two delayed annuities I will receive an overall cash on cash return of 11.5%.

Prior to purchasing these I was receiving guaranteed income only from SS and a rather small pension. Through these annuities I have now tripled my guaranteed income well into six figures which covers most of my fixed expenses but not my discretionary expenses such as country club membership, travel and maintaining a rather expensive home.

I'm pleased with the results and sleep well.

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Old 11-05-2016, 09:02 AM   #29
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OP, I was hoping you would receive more responses on this thread.
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Old 11-06-2016, 07:07 AM   #30
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I just recently put $100k of my cash allocation into an annuity. It is guaranteed 3.25% for the first year and 2% thereafter. From day one the value of the annuity was $100k and has increased daily since. Where are the high fees that is always talked about when annuity discussions come up? Still don't see what is all bad about this type of annuity for some of one's cash allocation.
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Old 11-06-2016, 07:28 AM   #31
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Where are the high fees that is always talked about when annuity discussions come up? Still don't see what is all bad about this type of annuity for some of one's cash allocation.
Sounds like you and your insurance company are a perfect match!

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Old 11-06-2016, 07:47 AM   #32
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I just recently put $100k of my cash allocation into an annuity. It is guaranteed 3.25% for the first year and 2% thereafter. From day one the value of the annuity was $100k and has increased daily since. Where are the high fees that is always talked about when annuity discussions come up? Still don't see what is all bad about this type of annuity for some of one's cash allocation.
Why would you put part of your cash allocation into an illquid annuity product? I assume this is a deferred annuity. A CD ladder might be more appropriate for cash.
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Old 11-06-2016, 08:29 AM   #33
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Why would you put part of your cash allocation into an illquid annuity product? I assume this is a deferred annuity. A CD ladder might be more appropriate for cash.
Because I have other cash that could be used if necessary before the surrender period expires in four years.
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Old 11-06-2016, 08:45 AM   #34
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...........Where are the high fees that is always talked about when annuity discussions come up?...........
Post a link to the contract terms. Insurance companies do this for a living and know how to hide the ugly details.
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Old 11-06-2016, 09:03 AM   #35
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Because I have other cash that could be used if necessary before the surrender period expires in four years.
OK so you're using it like a 4 year CD, seems like a good plan. I do something similar with my TIAA-Traditional annuity. It pays 4.8% that I can take or reinvest, but to get at the whole balance has to be done over 10 years in equal installments.
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Old 11-06-2016, 09:59 AM   #36
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I just recently put $100k of my cash allocation into an annuity. It is guaranteed 3.25% for the first year and 2% thereafter. From day one the value of the annuity was $100k and has increased daily since. Where are the high fees that is always talked about when annuity discussions come up? Still don't see what is all bad about this type of annuity for some of one's cash allocation.
This and all the subsequent discussions have no relevance to the OP's original question.
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Old 11-06-2016, 03:03 PM   #37
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This and all the subsequent discussions have no relevance to the OP's original question.
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Laddered annuities
Old 11-06-2016, 05:24 PM   #38
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Laddered annuities

One thing I am struggling with is deciding whether to choose different insurance companies for diversification esp since the companies on the list of the site I posted are small and mid size companies. I also have no idea if the broker holds the account or maybe I will be dealing directly with the insurance co. Since I found the CD deal at Andrews I am leaning towards that option if it's still available in April '17.
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Old 11-07-2016, 10:07 AM   #39
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The question is: "Has anyone built a laddered annuity" ...... not whether or not you're an advocate. Thanks for the reply anyway !
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Old 11-07-2016, 01:54 PM   #40
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This may not fit the OPs question but: Does anyone have any experience or opinions on SAIL (Smart Asset Income Ladder)? As I understand it, this strategy involves pulling out safer money in the first (10-15) years of retirement while allowing growth investments to grow. Different from my strategy of maintaining an asset allocation. Tried to search on this forum but was unsuccessful. Strategy is based upon a paper written by Univ of San Franciscan grad students in the 70's?
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