Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Low risk options - am I missing anything?
Old 03-05-2013, 06:09 PM   #1
Recycles dryer sheets
 
Join Date: Sep 2012
Posts: 98
Low risk options - am I missing anything?

I'm about to put some more money into my annuities. I'm very risk adverse and don't seen any place to put money right now. I currently have bonds (individual, not in a fund), preferred shares and cash. Is there any other ultra conservative investments I'm overlooking?
__________________

__________________
Sun456 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 03-05-2013, 06:13 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Ugh, not the a word.

How about I bonds and pen fed CDs?
__________________

__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 03-05-2013, 06:20 PM   #3
Recycles dryer sheets
 
Join Date: Sep 2012
Posts: 98
Oops. Forgot. I have I-bonds also but kind of forget about them because of the limits they put on buying them. Will look into the CDs. Also considering EE bonds but haven't yet bought any.
__________________
Sun456 is offline   Reply With Quote
Old 03-05-2013, 07:35 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,439
You're overlooking inflation risk, but I suspect that you know that already.

What type of annuities? SPIAs? SPDAs?
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 03-05-2013, 07:45 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
For the lower risk portion of my portfolio, I bottom fish in the fixed income portion of the closed end fund world. The lone attractive opportunity I have been buying there lately is WIW: Life, Investments & Everything: WIW: Another Dollar Selling For 90 Cents
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 03-05-2013, 07:54 PM   #6
Recycles dryer sheets
 
Join Date: Sep 2012
Posts: 98
I'm actually factoring in inflation risk to the amount of annuities. I have three equity indexed and 1 variable (the highest daily one from Prudential). I currently have the lifetime guarantee riders that will provide $110K starting at 65. If I put $200K more into them then I get $152K starting at 65. My yearly expenses are about $35K-$40K. With an assumed 3.3% average inflation the future $152K is worth about $79K in today's dollars. Halve that again to get to 40 years in the future then I'm meeting my baseline expense at 86 (I'm currently 46). Everything in excess each year I can reinvest at prevailing rates of the times or save up for major expenditures.

I'm not including SS into my annuity amount because, well, you know, who knows if it will be there. If it is then I get that on top of my annuity income.

But I've currently got some bonds being called, some preferred stocks being called and a whole pile of cash to decide what to do with. I do want to have it diversified out and doing what it can to try to keep up with inflation but at this stage I'm not willing to take much risk as I don't need it. Hence I thought I'd cast out to the forum for ideas.

Edit: Thanks brewer. I was composing my post while you posted the above info. I will look into that also.
__________________
Sun456 is offline   Reply With Quote
Old 03-05-2013, 08:04 PM   #7
Full time employment: Posting here.
Moscyn's Avatar
 
Join Date: Mar 2009
Posts: 728
I am also risk adversed with a mixture of annuities, fixed income funds, ibonds, cash and CDs and a 20% allocation to securities and currency trading just to keep me interested in my boring portfolio. Actually, the 20% allocation generates a better return compared to the boring investments but I don't plan to increase this allocation. I know I most probably am not beating inflation in some years but this is something risk adversed investors have to acknowledge and accept. So, if you want to sleep better and your portfolio is sustainable, I guess there's not that many other variety of risk adversed investments to choose from.
__________________
Moscyn is offline   Reply With Quote
Old 03-05-2013, 08:10 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,018
Quote:
Originally Posted by Moscyn View Post
I am also risk adversed with a mixture of annuities, fixed income funds, ibonds, cash and CDs and a 20% allocation to securities and currency trading just to keep me interested in my boring portfolio. Actually, the 20% allocation generates a better return compared to the boring investments but I don't plan to increase this allocation. I know I most probably am not beating inflation in some years but this is something risk adversed investors have to acknowledge and accept. So, if you want to sleep better and your portfolio is sustainable, I guess there's not that many other variety of risk adversed investments to choose from.
Let's put it this way. A cash/fixed income portfolio has a 100% risk of losing out to inflation over time. Equities help you manage that risk.
__________________
Meadbh is offline   Reply With Quote
Old 03-05-2013, 08:19 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by Sun456 View Post
I have three equity indexed and 1 variable
Gak! Choke!

Do you understand what you own there?
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 03-05-2013, 08:24 PM   #10
Recycles dryer sheets
 
Join Date: Sep 2012
Posts: 98
Quote:
Originally Posted by brewer12345 View Post
Gak! Choke!

Do you understand what you own there?
Yes I do. I read each and every page. I SW modeled them. I have notes in a spreadsheet so I know the salient points as I age. I've read (and negotiated) 1000+ page contracts for a living. Yes they are confusing. But I would never buy something I did not or could not understand. That is the primary reason I'm not gambling in the stock market right now. I can't understand what it will do in response to all the interference from the govt.

I do not recommend anyone invest in them if they do not understand them. But if you do know what you want to get out of them and they meet the need then I don't see why they shouldn't be utilized. I'm not a blindly follow the herd type of person. Might be why I am where I am today.
__________________
Sun456 is offline   Reply With Quote
Old 03-05-2013, 08:36 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by Sun456 View Post
Yes I do. I read each and every page. I SW modeled them. I have notes in a spreadsheet so I know the salient points as I age. My IQ is north of 160 and I've read (and negotiated) 1000+ page contracts for a living. Yes they are confusing. But I would never buy something I did not or could not understand. That is the primary reason I'm not gambling in the stock market right now. I can't understand what it will do in response to all the interference from the govt.

I do not recommend anyone invest in them if they do not understand them. But if you do know what you want to get out of them and they meet the need then I don't see why they shouldn't be utilized. I'm not a blindly follow the herd type of person. Might be why I am where I am today.
Glad to hear it. So often these things are aggressively sold to neophytes who have no idea what they are buying and generally get fleeced by an unscrupulous salescritter.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 03-05-2013, 08:50 PM   #12
Recycles dryer sheets
 
Join Date: Sep 2012
Posts: 98
Quote:
Originally Posted by brewer12345 View Post
Glad to hear it. So often these things are aggressively sold to neophytes who have no idea what they are buying and generally get fleeced by an unscrupulous salescritter.
Tis sad but true. The people selling them don't always know them very well and tend to be unscrupulous. Any one considering them must know how to read contracts and must do lots of research. I understand why they have a bad reputation. However, I'm very happy with the products I bought because I did not have a pension and now I do.
__________________
Sun456 is offline   Reply With Quote
Old 03-07-2013, 04:44 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,413
here is the problem with putting to much money into inflation adjusted annuities.

they may reflect the cpi but they will not reflect your own cost of living index.

like now, inflation in the cpi looks tame but as we all can tell you as we look at what we are spending in our lives it is far from tame unless you refinanced or recently got a new mortage way below the old one.

you need money in other investments to grow your personal cost of living money and not count on a cola adjustment in ss or an annuity to do it.
__________________

__________________
mathjak107 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


 

 
All times are GMT -6. The time now is 07:59 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.