Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Old 04-12-2013, 08:13 AM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 16,436
Originally Posted by Sun456 View Post
If you do a search on annuities in this forum you can get some good info.

I bought some myself, but only after extensive research. A couple of things that you have to realize before making the leap.

1) This is not an investment. It is an insurance product. Investments do not come with guarantees.

2) The company is contractually guaranteeing you an outcome and for that you are giving some things up.

3) You are giving up access to your principal. The products are designed to drain the account through fees.

4) If you are looking for guaranteed income and don't mind buying it with the principal then I think annuities can be a great choice. For me the peace of mind was well worth it.

5) You want to spread the risk between multiple annuity companies. I spread my principal out between 4 companies in order to reduce the risk with any one company.

6) Generally if the annuity gives you a benefit they take something away in another place. So if there is a death benefit you may not get as high of a roll up rate. Look at all the details to understand the give and takes. Decide what is important to you and look for those products that give you more of what you want but be willing to trade off the elements that are not as important to you.

7) Don't buy unless you read and understand the contract. Take notes. Make your own spreadsheet. Compare the outcome with the examples the insurance company give you. Pay attention to any capitalized term. Reference their definition of it. Do not trust what the sales person tells you. They are often wrong.

I own 4 annuities but shopped many more. You have to talk to alot of sales people to get a broad view of the market. No one person carried all the products. It took a lot of time but I'm happy with the result.


ERD50 is online now   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 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 04-12-2013, 08:39 AM   #22
Thinks s/he gets paid by the post
nun's Avatar
Join Date: Feb 2006
Posts: 4,331

5) You want to spread the risk between multiple annuity companies. I spread my principal out between 4 companies in order to reduce the risk with any one company.


You might also look at spreading the annuities out over time ie build a ladder.

"The needs of the many outweigh the needs of the few, or the one." - Spock
Retired Mar 2014 at age 52
Target AA: 70% equity funds / 28% TIAA-Traditional/ 2% cash
Target WR: 0.0%,
Income from pension, rent, and eventually SS
nun is offline   Reply With Quote
Old 04-12-2013, 10:06 AM   #23
Recycles dryer sheets
Join Date: Apr 2013
Location: Fishers
Posts: 241
Sun456 - Item #4 hits in on the head, that is why I rolled over a 401K account for my single premium annuity 15 years ago. The guaranteed monthly annuity payment is what sold me. Had I not done that, one of the "legs" of my retirement stool would be significantly shorter than it is today.

wmc1000 is offline   Reply With Quote

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 09:32 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.