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One more time, variable annuities....
Old 10-06-2008, 04:58 PM   #1
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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?
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Old 10-06-2008, 05:45 PM   #2
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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.
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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.
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Old 10-06-2008, 05:53 PM   #3
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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?
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Old 10-06-2008, 06:04 PM   #4
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Nope, still hate them. I would rather suffer a total portfolio meltdown than give even one dime to an annuity salesman.
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Old 10-06-2008, 06:05 PM   #5
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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.
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Old 10-06-2008, 06:10 PM   #6
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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..........
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Old 10-06-2008, 06:16 PM   #7
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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?"
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Old 10-06-2008, 06:29 PM   #8
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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.
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Old 10-06-2008, 06:30 PM   #9
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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.
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Old 10-06-2008, 06:36 PM   #10
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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!

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Old 10-06-2008, 07:44 PM   #11
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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.
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Old 10-06-2008, 08:16 PM   #12
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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.
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Old 10-06-2008, 08:25 PM   #13
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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.
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Old 10-06-2008, 08:29 PM   #14
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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
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Old 10-06-2008, 09:12 PM   #15
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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!

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Old 10-07-2008, 05:07 AM   #16
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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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Old 10-07-2008, 05:32 AM   #17
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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.
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Old 10-07-2008, 07:58 AM   #18
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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.
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Old 10-07-2008, 08:03 AM   #19
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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?
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Old 10-07-2008, 08:41 AM   #20
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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.
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