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View Poll Results: Do you intend to use an annuity in your retirement strategy?
No 86 77.48%
Yes - Use all of our investment portfolio to purchase a Fixed Annuity 2 1.80%
Yes - Use a portion of investment portfolio to purchase a Fixed Annuity (create a base income stream) 23 20.72%
Voters: 111. You may not vote on this poll

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Re: Poll: Annuities and retirement
Old 03-04-2007, 04:52 PM   #41
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Re: Poll: Annuities and retirement

Quote:
Originally Posted by 2B
Think about it. The annuity company takes your money and invests it in a broad portfolio of stocks and bonds. They may even put some into private equity. They take the same portfolio risk you take on by doing your own investing but then they suck out fees and commissions before giving a portion of your money back.
Remember, the insurance companies have a structural advantage here in that they can "diversify across time". They can match portfolio assets to a liability equal to the mean of the life-expectancy distribution, because they spread this risk over hundreds of thousands (perhaps millions) of annuitants. This is what we, as individuals, can't do in as precise a way. Whether the fees justify this longevity insurance becomes somewhat of a moot point. If you need a minimum WR, and your portfolio is not large enough to take on the risk of not achieving it, but is large enough to purchase a lifetime annuity of that WR, I'm not sure what else you can do other than purchase the annuity. I view this as something of a last resort, not something I plan to do.
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Re: Poll: Annuities and retirement
Old 03-04-2007, 05:04 PM   #42
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Re: Poll: Annuities and retirement

Quote:
Originally Posted by Want2retire
If we have runaway inflation for a while, the value of our pension, social security, and lifetime annuities could drop to half what they are worth now since all of them have a cola cap.
What is the COLA cap on SS? I wasn't aware that there was one.
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Re: Poll: Annuities and retirement
Old 03-04-2007, 05:04 PM   #43
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Re: Poll: Annuities and retirement

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Originally Posted by FIRE'd@51
Remember, the insurance companies have a structural advantage here in that they can "diversify across time". They can match portfolio assets to a liability equal to the mean of the life-expectancy distribution, because they spread this risk over hundreds of thousands (perhaps millions) of annuitants. This is what we, as individuals, can't do in as precise a way. Whether the fees justify this longevity insurance becomes somewhat of a moot point. If you need a minimum WR, and your portfolio is not large enough to take on the risk of not achieving it, but is large enough to purchase a lifetime annuity of that WR, I'm not sure what else you can do other than purchase the annuity. I view this as something of a last resort, not something I plan to do.
What does any of this blather have to do with annuities are poor investments? Someone decides they want more money than they think they can safely withdraw and are afraid of eating into their principal. They decide they will give their money to an annuity company who will become their financial nanny and give them an allowance. Hopefully, they won't outlive their nanny.

I would rather go with Guyton or Bernicke for my financial guides.
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Re: Poll: Annuities and retirement
Old 03-04-2007, 06:25 PM   #44
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Re: Poll: Annuities and retirement

Quote:
Originally Posted by 2B
What does any of this blather have to do with annuities are poor investments? Someone decides they want more money than they think they can safely withdraw and are afraid of eating into their principal. They decide they will give their money to an annuity company who will become their financial nanny and give them an allowance. Hopefully, they won't outlive their nanny.

I would rather go with Guyton or Bernicke for my financial guides.
Did you read what I wrote? I agree that they are a poor investment. We had another thread on this, in which I calculated the real ROR on even a Vanguard annuity was zero or negative if you lived until your life expectancy. I said they would have to be a last resort. By last resort, I mean someone can't cut their WR further and can't eat into their principal without taking a fairly large risk of outliving their money.
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Re: Poll: Annuities and retirement
Old 03-04-2007, 06:32 PM   #45
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Re: Poll: Annuities and retirement

Over 80% in this poll (so far) seem to not appreciate the "value" of giving a chuck of their stash to an insurance company and hoping that it will come across with the promised income.

Can you generate more income, at a cost of ZERO, than some committee in Hartford or Boston or NYC can provide you with?

Sure you can. It is not difficult at all.

But, the wizards on this board already know this fact.

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Re: Poll: Annuities and retirement
Old 03-04-2007, 06:46 PM   #46
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Re: Poll: Annuities and retirement

Quote:
Originally Posted by mickeyd
Over 80% in this poll (so far) seem to not appreciate the "value" of giving a chuck of their stash to an insurance company and hoping that it will come across with the promised income.

Can you generate more income, at a cost of ZERO, than some committee in Hartford or Boston or NYC can provide you with?

Sure you can. It is not difficult at all.

But, the wizards on this board already know this fact.
And I was one of the 80% who voted "No". However, it's not obvious to me that it's easy to generate the WR with 100% probability on that chunk. I'm talking about the case where the chunk is all you have and you can't further reduce your WR, not the case where it's only part of the stash.
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Re: Poll: Annuities and retirement
Old 03-04-2007, 09:18 PM   #47
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Re: Poll: Annuities and retirement

Quote:
Originally Posted by Cut-Throat
again, inserting something that was never said! - This is what you would call 'loading the deck'

Oh gosh, are we now forgetting what we say and what the OP has brought up as his intent in this very thread?

Come on...

Quote:
Originally Posted by chinaco
When we ER, how can I maximize my spending in the early (young) years of retirement and not go broke.
Quote:
Originally Posted by Cut-Throat
Actually I am counting on Overspending before age 70.
The latter in the thread where you proposed investing 50% of your money into an annuity and delaying social security to offset higher early spending.

You know, the thing I disagree with, which you are now claiming you never said, but there you said it?

I have to ask, are you serious or just enjoy occasional trolling?
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Re: Poll: Annuities and retirement
Old 03-05-2007, 12:54 AM   #48
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Re: Poll: Annuities and retirement

Why is paying down your mortgage a good idea but not having an annuity ?
Doesnt vanguard have annuities ?
Does there pay out more or less than paying down your mortgage ?
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Re: Poll: Annuities and retirement
Old 03-05-2007, 09:10 AM   #49
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Re: Poll: Annuities and retirement

Ah yes, the dreaded annuity discussion surfaces again............ :P

Just a thought to everyone who has a pension..........um..........what is ANOTHER word for a pension?

Annuity Maybe...........

Probably a little "scary" to know Social Security is an annuity and so are pensions...........but most folks would NEVER own one.............well, we all do, and some of us more than others..............



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Re: Poll: Annuities and retirement
Old 03-05-2007, 09:45 AM   #50
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Re: Poll: Annuities and retirement

I had no choice but to "purchase" my SS "annuity"...
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Re: Poll: Annuities and retirement
Old 03-05-2007, 09:49 AM   #51
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Re: Poll: Annuities and retirement

Quote:
Originally Posted by HFWR
I had no choice but to "purchase" my SS "annuity"...


Maybe Uncle Sam is the "ultimate insurance agent"...............
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Re: Poll: Annuities and retirement
Old 03-05-2007, 10:20 AM   #52
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Re: Poll: Annuities and retirement

Quote:
Originally Posted by Cut-Throat


There you see how easy that was.
I quoted you directly from here: http://early-retirement.org/forums/i...5358#msg215358

Are you going to claim dementia, multiple personality disorder, direct lying, trolling, or will you become embarrassed and try to delete your account again, not realizing that that doesnt remove all the posts you've made?

Whatta maroon...
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Re: Poll: Annuities and retirement
Old 03-05-2007, 10:42 AM   #53
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Re: Poll: Annuities and retirement

Quote:
Originally Posted by Cute Fuzzy Bunny
Whatta maroon...
Let me help you that. Maroon is a color. A moron is someone that does not know how to spell.
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Re: Poll: Annuities and retirement
Old 03-05-2007, 10:50 AM   #54
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Re: Poll: Annuities and retirement

Which one is worse than someone who doesnt get a Bugs Bunny reference?

From the urban dictionary:

1. Maroon

A term of derision often uttered by Bugs Bunny when referring to an interaction with a dopey adversary. It is a mispronunciation of the word "Moron"

"What a Maroon!" "Will ya get a load of this maroon"

Quote:
Originally Posted by Cut-Throat
Let me help you that.
And let me help YOU with your basic english sentence stuctures. Its clear you're not accepting help on your inabilities to do basic math and simple logic.


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Re: Poll: Annuities and retirement
Old 03-05-2007, 10:52 AM   #55
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Re: Poll: Annuities and retirement

Quote:
Originally Posted by Cute Fuzzy Bunny
Which one is worse than someone who doesnt get a Bugs Bunny reference?

From the urban dictionary:

1. Maroon

A term of derision often uttered by Bugs Bunny when referring to an interaction with a dopey adversary. It is a mispronunciation of the word "Moron"

"What a Maroon!" "Will ya get a load of this maroon"
I got it...........helps when you have young kids running around.......... Plus, you probably knw the exact mixture of baby formula and water/soy milk/scotch to keep the baby happy.............
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Re: Poll: Annuities and retirement
Old 03-05-2007, 10:58 AM   #56
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Re: Poll: Annuities and retirement

Quote:
Originally Posted by Cute Fuzzy Bunny
Which one is worse than someone who doesnt get a Bugs Bunny reference?



"What a Maroon!" "Will ya get a load of this maroon"


Would the proper retort be "Kill da wabbit,,,kill da wabbit!"?

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Re: Poll: Annuities and retirement
Old 03-05-2007, 11:01 AM   #57
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Re: Poll: Annuities and retirement

The proper retort sure as **** isnt claiming you didnt say something or that a quote was fabricated when evidence to the contrary is...well...evident!

To follow that up with a fallacious attempt to correct my spelling, and using a syntactically incorrect sentence in the process?

Priceless.

I dont think he's hunting for wabbits. I think he's been eating the smartpills. And they aint working.
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Re: Poll: Annuities and retirement
Old 03-05-2007, 11:03 AM   #58
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Re: Poll: Annuities and retirement

Quote:
Originally Posted by Cute Fuzzy Bunny
The proper retort sure as **** isnt claiming you didnt say something or that a quote was fabricated when evidence to the contrary is...well...evident!

To follow that up with a fallacious attempt to correct my spelling, and using a syntactically incorrect sentence in the process?

Priceless.

I dont think he's hunting for wabbits. I think he's been eating the smartpills. And they aint working.
From an altruistic point of view, I find these posts whimsically fascinating, and I plan on re-reading Dianetics tonight.................
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Re: Poll: Annuities and retirement
Old 03-05-2007, 11:11 AM   #59
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Re: Poll: Annuities and retirement

With the full knowledge I'll likely get beat up, I posted yes. I have a significant portion of my net worth in a Variable Annuity, I have for years. And guess what, I bought it from Financial Planner It is set up and monitored, but we haven't had to change funds but a couple times over the years. We rebalance semi-annually.

Does it have costs ? Hell yes, I know there's no free lunch, but over the 9 years I've had it the funds inside perform near or above their benchmarks even after expenses. It's 100% actively managed equity funds and will be until we're approaching the distribution years.

I like the tax deferred status and the options (no 1099's) & safety features for drawing the money out of there when I need it. If I fall off a cliff, I'd rather have my wife dealing with my financial planner and the investments we have in place. Every single invesment I have in place is earmarked for a future purpose, and his firm knows what it is.

Annuities have one sole purpose, retirement income. That is what I'm using this fund for, nothing else. I know that it will be taxable when I draw it out, but it will be my only taxable income at that time. Combining it with Roth withdrawals I'm looking forward to it. If you know what you're buying and want one, good for you. They may be abused by some sales people and sold to the wrong people at the wrong time and that is where I think they get their bad rap.

Ric Edleman & Ben Stein have written some excellent material on annuities for those interested. If you're not interested, please don't throw bricks at me. You don't have to read their stuff either, but they've put more than a little research into this and agree they're great when used appropriately.

I agree with Finance Dude, everyone loves Pensions IF their employer buys them, a lot of people don't like them if you buy them yourself. Here's an example, I should have over $2,000,000 in my annuity when I reach 59.5. At 4% withdrawal that will be $80,000 a year. If that was provided by an employer everyone would say, that's one hell of a pension !! But, since I set it up myself with a Variable Annuity some say, what a dummy.

I'm not trying to convince anyone who doesn't want an annuity to go out and get one, but for the rest of us, they can possible be a great alternative.
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Re: Poll: Annuities and retirement
Old 03-05-2007, 11:14 AM   #60
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Re: Poll: Annuities and retirement

Quote:
Originally Posted by Empty Pockets
With the full knowledge I'll likely get beat up, I posted yes. I have a significant portion of my net worth in a VUL, I have for years. And guess what, I bought it from Financial Planner It is set up and monitored, but we haven't had to change funds but a couple times over the years. We rebalance semi-annually.

Does it have costs ? Hell yes, I know there's no free lunch, but over the 9 years I've had it the funds inside perform near or above their benchmarks even after expenses. It's 100% actively managed equity funds and will be until we're approaching the distribution years.

I like the tax deferred status and the options (no 1099's) & safety features for drawing the money out of there when I need it. If I fall off a cliff, I'd rather have my wife dealing with my financial planner and the investments we have in place. Every single invesment I have in place is earmarked for a future purpose, and his firm knows what it is.

Annuities have one sole purpose, retirement income. That is what I'm using this fund for, nothing else. I know that it will be taxable when I draw it out, but it will be my only taxable income at that time. Combining it with Roth withdrawals I'm looking forward to it. If you know what you're buying and want one, good for you. They may be abused by some sales people and sold to the wrong people at the wrong time and that is where I think they get their bad rap.

Ric Edleman & Ben Stein have written some excellent material on annuities for those interested. If you're not interested, please don't throw bricks at me. You don't have to read their stuff either, but they've put more than a little research into this and agree they're great when used appropriately.

I agree with Finance Dude, everyone loves Pensions IF their employer buys them, a lot of people don't like them if you buy them yourself. Here's an example, I should have over $2,000,000 in my annuity when I reach 59.5. At 4% withdrawal that will be $80,000 a year. If that was provided by an employer everyone would say, that's one hell of a pension !! But, since I set it up myself with a Variable Annuity some say, what a dummy.

I'm not trying to convince anyone who doesn't want an annuity to go out and get one, but for the rest of us, they can possible be a great alternative.
Just curious.........why VUL onstead of VA? The loan provision?
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