One more time, variable annuities....

Art G · 10-06-2008, 05:58 PM

So, we're now in a situation that, provided the insurance companies keep their promise, wouldn't you rather be in a variable annuity with locked in value than in a mutual fund currently down in value?
It may all fail, but as it stands, my VA's are guaranteeing me income based on no lower than my highest watermark, and some VA's will even give a raise if the market rebounds.
Just curious if anyone, anywhere out there is reconsidering their hatred of the product? If not, why?

REWahoo · 10-06-2008, 06:45 PM

Quote:

Originally Posted by Art G

So, we're now in a situation that, provided the insurance companies keep their promise, wouldn't you rather be in a variable annuity with locked in value than in a mutual fund currently down in value?

No, absolutely not.

Quote:

Originally Posted by Art G

Just curious if anyone, anywhere out there is reconsidering their hatred of the product? If not, why?

No, for two reasons: 1) deep concern about that little "provided insurance companies keep their promise" qualifier and 2) conviction beyond a reasonable doubt that those who sell these products are at best, brainwashed, and at worst, ~~pond scum~~ free-floating freshwater green algae.

freebird5825 · 10-06-2008, 06:53 PM

i'm a fixed annuity holder. i like it because there are no surprises. the monthly check is always there with no wizardry involved.
i have no direct exp with VA, but i do know they are universally panned in retirement advice articles.
but if you are having a good experience with them, let's hear about it! that's why we're all here...right?

**Gumby** · 10-06-2008, 07:04 PM

Nope, still hate them. I would rather suffer a total portfolio meltdown than give even one dime to an annuity salesman.

**Sarah in SC** · 10-06-2008, 07:05 PM

Like Freebird said, if you are having a good experience owning VAs (versus having a good experience selling them), we'd sure like to know about it.

FinanceDude · 10-06-2008, 07:10 PM

Quote:

Originally Posted by Gumby

Nope, still hate them. I would rather suffer a total portfolio meltdown than give even one dime to an annuity salesman.

Wow, that was positive..........

laurence · 10-06-2008, 07:16 PM

The sad part is a bunch of unknowing boomers are going to fearfully run into the arms of these VA sale vultures due to this market. "You will never lose money!" ..."who's AIG?"

unclemick · 10-06-2008, 07:29 PM

Being a smart ass - I call my 'annuity' Social Security and a small non cola pension.

heh heh heh - 40% of cash flow in retirement in good times and possibly waaaay more when I get in my cheap bastard mode.

Time and inflation will reduce the 40% as I need to spend while I'm not getting any younger.

Pssst - Wellesley = SEC yield 4.93% as of 10/3/08.

per VG's website.

**CuppaJoe** · 10-06-2008, 07:30 PM

As the holder of an annuity from the defunct Executive Life Assurance Co. HATRED does not begin to express my attitude. But I will moderate myself and refer you to dozens of posts by 2B.

audreyh1 · 10-06-2008, 07:36 PM

Seeing what happened to AIG?!?!?! Nope - really don't feel so "safe" about those annuity insurance products.

I love your qualifier "provided the insurance companies keep their promise". That's kind of a big hurdle!

Audrey

Marquette · 10-06-2008, 08:44 PM

Would that be an annuity with Hartford, getting an infusion from Allianz, or an annuity with Aviva, a company that just reported 30% of it's capital surplus wiped out, or maybe an annuity with AIG, a company selling their life business in the UK to pay off a certain bailout.

I just don't know, I guess I've got a penguin problem.

ejman · 10-06-2008, 09:16 PM

Hum lets see... Insurance companies invest more or less in the same muck as we all do - Actually worse since they have access to a lot of "sweet stuff" directly. But the facts are recent events have shown no geniuses there. So, they promise a return no matter what the market does. The market dives - where exactly is the money supposed to come from? Maybe more suckers buying their annuities.

samclem · 10-06-2008, 09:25 PM

But the rating companies tell us which insurance companies are okay and can be trusted. Not to be confused with the rating companies who told us all those MBS's and financial company bonds were solid.

ejman · 10-06-2008, 09:29 PM

Quote:

Originally Posted by samclem

But the rating companies tell us which insurance companies are okay and can be trusted. Not to be confused with the rating companies who told us all those MBS's and financial company bonds were solid.

Ah yes, the rating companies , the same folks that rated all of those wonderful financial products the whole world bought by the boatload based on their wonderful ratings... That are currently being reflected in a tummy pain or two. Yup

audreyh1 · 10-06-2008, 10:12 PM

Quote:

Originally Posted by samclem

But the rating companies tell us which insurance companies are okay and can be trusted. Not to be confused with the rating companies who told us all those MBS's and financial company bonds were solid.

Good one!

Audrey

shotgunner · 10-07-2008, 06:07 AM

Isn't the CREF side of TIAA-CREF essentially a variable annuity? If so there must be someone on this board who has used them both in accumulation and drawdown phase. Given TIAA's prevalence on college campus' and the fact 403B's associated with them are the primary retirement account for most in academia their meltdown would be huge. Is that possible?

2B · 10-07-2008, 06:32 AM

Quote:

Originally Posted by CuppaJoe

As the holder of an annuity from the defunct Executive Life Assurance Co. HATRED does not begin to express my attitude. But I will moderate myself and refer you to dozens of posts by 2B.

It's great having the right kind of reputation. Don't forget the Lutheran Brotherhood failure. I know a guy that went to his grave pissed at how much he lost in their failure.

I agree that when the dust settles there will be a lot of people sucked into the lure of "can't lose" investing. Of course, we all know that the insurance and financial companies have all learned their lesson and won't over-leverage ever again.

Art G · 10-07-2008, 08:58 AM

Quote:

Originally Posted by Gumby

Nope, still hate them. I would rather suffer a total portfolio meltdown than give even one dime to an annuity salesman.

LOL! Yes, this is a healthy outlook. I figured some might say this. As an investor, I'm open to anything to grow or protect my wealth.

ziggy29 · 10-07-2008, 09:03 AM

Quote:

Originally Posted by Art G

provided the insurance companies keep their promise

Given the current "situation" you are describing, don't you think this is a little too much of a leap of faith?

ats5g · 10-07-2008, 09:41 AM

Quote:

Originally Posted by Art G

So, we're now in a situation that, provided the insurance companies keep their promise, wouldn't you rather be in a variable annuity with locked in value than in a mutual fund currently down in value?
It may all fail, but as it stands, my VA's are guaranteeing me income based on no lower than my highest watermark, and some VA's will even give a raise if the market rebounds.
Just curious if anyone, anywhere out there is reconsidering their hatred of the product? If not, why?

Let's see:

1) The fees. Keep on paying north of 2% while I pay 0.15%.
1a) With those high fees, your upside is going to be no better than bonds, unless you're stilll smoking the crack pipe and think stocks are going to return 10% before fees.
2) Taxation. Keep on turning those capital gains and qualified dividends into ordinary income.
3) You can't tax loss harvest while I can.

10-06-2008, 05:58 PM	#1
Art G Thinks s/he gets paid by the post Join Date: Nov 2007 Posts: 1,052	One more time, variable annuities.... So, we're now in a situation that, provided the insurance companies keep their promise, wouldn't you rather be in a variable annuity with locked in value than in a mutual fund currently down in value? It may all fail, but as it stands, my VA's are guaranteeing me income based on no lower than my highest watermark, and some VA's will even give a raise if the market rebounds. Just curious if anyone, anywhere out there is reconsidering their hatred of the product? If not, why?

10-06-2008, 06:53 PM	#3
freebird5825 Thinks s/he gets paid by the post Join Date: Feb 2008 Location: 42N Latitude, NY Posts: 1,135	i'm a fixed annuity holder. i like it because there are no surprises. the monthly check is always there with no wizardry involved. i have no direct exp with VA, but i do know they are universally panned in retirement advice articles. but if you are having a good experience with them, let's hear about it! that's why we're all here...right? __________________ *Freebird* Go placidly among the noise and haste and remember what peace there may be in silence. As far as possible without surrender be on good terms with all persons. Speak your truth quietly and clearly; and listen to others, even the dull and ignorant; they too have their story.

10-06-2008, 07:04 PM	#4
Gumby Moderator Join Date: Apr 2006 Posts: 1,775	Nope, still hate them. I would rather suffer a total portfolio meltdown than give even one dime to an annuity salesman. __________________ You should not assume that I have a clue about anything I post. If you need a lawyer, go get your own.

10-06-2008, 07:05 PM	#5
Sarah in SC Moderator Join Date: Sep 2005 Location: Charleston, SC Posts: 2,696	Like Freebird said, if you are having a good experience owning VAs (versus having a good experience selling them), we'd sure like to know about it. __________________ "Never argue with a fool, onlookers may not be able to tell the difference." - Mark Twain DINKS, 37 and 45, plan for his ER at 50, mine few yrs later.

10-06-2008, 07:30 PM	#9
CuppaJoe Moderator Join Date: Jun 2007 Location: Where "the Water is Fine" Posts: 1,946	As the holder of an annuity from the defunct Executive Life Assurance Co. HATRED does not begin to express my attitude. But I will moderate myself and refer you to dozens of posts by 2B. __________________ It's not about timing, it's about time.

10-06-2008, 07:16 PM	#7
laurence Moderator Emeritus Join Date: Feb 2005 Location: San Diego Posts: 4,758	The sad part is a bunch of unknowing boomers are going to fearfully run into the arms of these VA sale vultures due to this market. "You will never lose money!" ..."who's AIG?"

10-06-2008, 07:29 PM	#8
unclemick Give me a museum and I'll fill it. (Picasso) Give me a forum ... Join Date: Jul 2003 Location: north of Kansas City Posts: 5,528	Being a smart ass - I call my 'annuity' Social Security and a small non cola pension. heh heh heh - 40% of cash flow in retirement in good times and possibly waaaay more when I get in my cheap bastard mode. Time and inflation will reduce the 40% as I need to spend while I'm not getting any younger. Pssst - Wellesley = SEC yield 4.93% as of 10/3/08. per VG's website.

10-06-2008, 07:36 PM	#10
audreyh1 Thinks s/he gets paid by the post Join Date: Jan 2006 Posts: 2,203	Seeing what happened to AIG?!?!?! Nope - really don't feel so "safe" about those annuity insurance products. I love your qualifier "provided the insurance companies keep their promise". That's kind of a big hurdle! Audrey

10-06-2008, 08:44 PM	#11
Marquette Thinks s/he gets paid by the post Join Date: Jan 2008 Posts: 2,020	Would that be an annuity with Hartford, getting an infusion from Allianz, or an annuity with Aviva, a company that just reported 30% of it's capital surplus wiped out, or maybe an annuity with AIG, a company selling their life business in the UK to pay off a certain bailout. I just don't know, I guess I've got a penguin problem.

10-06-2008, 09:16 PM	#12
ejman Recycles dryer sheets Join Date: Feb 2007 Posts: 104	Hum lets see... Insurance companies invest more or less in the same muck as we all do - Actually worse since they have access to a lot of "sweet stuff" directly. But the facts are recent events have shown no geniuses there. So, they promise a return no matter what the market does. The market dives - where exactly is the money supposed to come from? Maybe more suckers buying their annuities.

10-06-2008, 09:25 PM	#13
samclem Thinks s/he gets paid by the post Join Date: May 2004 Posts: 2,941	But the rating companies tell us which insurance companies are okay and can be trusted. Not to be confused with the rating companies who told us all those MBS's and financial company bonds were solid. __________________ "Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein

10-07-2008, 06:07 AM	#16
shotgunner Recycles dryer sheets Join Date: Jun 2008 Posts: 92	Tiaa-cref Isn't the CREF side of TIAA-CREF essentially a variable annuity? If so there must be someone on this board who has used them both in accumulation and drawdown phase. Given TIAA's prevalence on college campus' and the fact 403B's associated with them are the primary retirement account for most in academia their meltdown would be huge. Is that possible?

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