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Protect Your Retirement from Future Stupidity
Old 02-28-2014, 01:21 PM   #1
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Protect Your Retirement from Future Stupidity

Protect your retirement from future stupidity - MarketWatch

An interesting MarketWatch article that talks about what happens to seniors when mental ability declines and they start making bad financial decisions.

As you would suspect, annuities come up as the main solution. But while I don't have much interest in reading another generic article about annuities, I do like the information he shares on the commissions earned by various insurance companies. And, a question that came up recently in another thread about Vanguard - he confirms that even Vanguard annuities have a 2% commission built into them.
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Old 02-28-2014, 01:34 PM   #2
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My plan when I get near the age of incompetence is to put it all in PSSSSSST....Wellesly, and collect a monthly check.
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Old 02-28-2014, 01:49 PM   #3
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My plan when I get near the age of incompetence is to put it all in PSSSSSST....Wellesly, and collect a monthly check.
Hope you remember! Seriously, DF had everything figured out for EOL decisions. When it got time to do some of these, he no longer understood why, they never got done.
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Old 02-28-2014, 02:03 PM   #4
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My plan when I get near the age of incompetence is to put it all in PSSSSSST....Wellesly, and collect a monthly check.
It's paid quarterly, and I didn't wait until I got to that point. Or did I.
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Old 02-28-2014, 02:30 PM   #5
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I'm too busy protecting myself from the present stupidity of the business press acting as mouthpieces for the financial "services" industry. Another veiled sales pitch for annuities.
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Old 02-28-2014, 02:42 PM   #6
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I remind myself every time I read one of these articles;

I should have become an annuity salesman instead of an engineer......
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Old 02-28-2014, 02:43 PM   #7
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And, a question that came up recently in another thread about Vanguard - he confirms that even Vanguard annuities have a 2% commission built into them.
That thread was about withdrawing funds from a VG variable annuity account, instead of annuitizing it through an insurance company, but it is useful to know that there is a 2% commission should an annuity be purchased instead of withdrawing funds.
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Old 02-28-2014, 03:08 PM   #8
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From the article referenced in the OP.

Quote:
Most consumers will never acquire the expertise to effectively sort out all the choices. And this leads me to the best source I know for buying annuities: Low Load Insurance Services Inc., where the commission is only 1%.
Actually the best source for buying annuities is the Social Security Administration - deferring SS to 70 is the best deal around from what I read considering what you give up in relation to what you get - especially for couples. (I concede the couple in the article were already in their 70s so that opportunity would not apply to them.)
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Old 02-28-2014, 03:12 PM   #9
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Wellesley is an excellent choice for someone in the "losing it" stage (and most other stages also). When I approach that moment hopefully I'll not have lost too much and still have sense enough to choose it.
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Old 02-28-2014, 03:27 PM   #10
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From the article referenced in the OP.



Actually the best source for buying annuities is the Social Security Administration - deferring SS to 70 is the best deal around from what I read considering what you give up in relation to what you get - especially for couples. (I concede the couple in the article were already in their 70s so that opportunity would not apply to them.)
Very true!
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Old 02-28-2014, 03:54 PM   #11
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My plan when I get near the age of incompetence is to put it all in PSSSSSST....Wellesly, and collect a monthly check.
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Originally Posted by pb4uski View Post
Actually the best source for buying annuities is the Social Security Administration - deferring SS to 70 is the best deal around from what I read considering what you give up in relation to what you get - especially for couples. (I concede the couple in the article were already in their 70s so that opportunity would not apply to them.)
That's my plan exactly! When I turn 70, I will start SS on my account, move all investments to Wellesly and do RMDs from tax deferred to after tax Wellesly accounts. Haven't worked out details for withdrawing living expenses vs reinvesting. Don't think annuities will be needed and certainly would prefer to stay away from them.
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Old 03-01-2014, 07:00 AM   #12
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This article does address my concerns. I don't need an annuity but I worry about becoming befuddled and doing stupid things. It doesn't run in my family so I may dodge that bullet but if I don't will I ever realize it hit me? My plan is to shift control over to the kids (with substantial written directives) if I see things going south. But....
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Old 03-01-2014, 07:16 AM   #13
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This article does address my concerns. I don't need an annuity but I worry about becoming befuddled and doing stupid things. It doesn't run in my family so I may dodge that bullet but if I don't will I ever realize it hit me? My plan is to shift control over to the kids (with substantial written directives) if I see things going south. But....
That's my concern as well, but we don't have any children, so we'll need to plan carefully in advance.
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Old 03-01-2014, 08:32 AM   #14
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Told my younger son recently that I was considering buying something for $2500, and sent him a picture to ask what he thought of the item. He responded (jokingly) that he would have to call his older brother to discuss whether they thought we could afford it.

If your children are as thrifty as you are, what kind of home might they put you in? Of course, if you have lost it, you won't care.
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Old 03-01-2014, 09:07 AM   #15
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Great article, thanks. After the experience I had with my dad, who got more and more aggressive with his financial decisions as he felt his control over life slipping away, I have concluded that we become our own worst enemies as we age, and that we need to learn how to protect ourselves from our self. Dad threw hundreds of thousands of dollars away, and we could not stop him. Expressing concern and trying to get him to think through his actions rendered him paranoid that we were out to get him, and pushed him into the arms, so to speak, of "his friends" the young couple that wined and dined this old couple right into buying a risky variable annuity, which he later abandoned at the market crash when told he needed to put more money into it. He cancelled his long term health care policy just when he was likely to need it most, saying he had already paid $70,000 in premiums for the "worthless" policy and was not going to pay one cent more. Worse yet, had he been destitute at the end, we kids could have been tapped for his expenses depending on what state we lived in, due to Filial Responsibility laws. The state we live in currently is one of the most aggressive in going after the kids to pay their parent's bills.

Do not assume you will be rational in later years. Figure out a solution now. I am not a huge fan of paying for an annuity, but perhaps it could be considered stupidity insurance. Lord knows many of us will benefit from such a thing.
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Old 03-01-2014, 09:10 AM   #16
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Do not assume you will be rational in later years. Figure out a solution now. I am not a huge fan of paying for an annuity, but perhaps it could be considered stupidity insurance. Lord knows many of us will benefit from such a thing.
^^^ Some real good food for thought.
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Old 03-01-2014, 09:18 AM   #17
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Protect your retirement from future stupidity - MarketWatch

An interesting MarketWatch article that talks about what happens to seniors when mental ability declines and they start making bad financial decisions.

As you would suspect, annuities come up as the main solution. But while I don't have much interest in reading another generic article about annuities, I do like the information he shares on the commissions earned by various insurance companies. And, a question that came up recently in another thread about Vanguard - he confirms that even Vanguard annuities have a 2% commission built into them.
At what age does this start to happen (in general)?
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Old 03-01-2014, 09:32 AM   #18
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At what age does this start to happen (in general)?
What was the question again?
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Old 03-01-2014, 09:32 AM   #19
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At what age does this start to happen (in general)?
Good question. My dad began early onset dementia in his early 60's. But I see many 80+ year olds out there still running large corporations. So I don't think there is any way to answer that meaningfully. It's different for everyone.
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Old 03-01-2014, 09:44 AM   #20
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Good question. My dad began early onset dementia in his early 60's. But I see many 80+ year olds out there still running large corporations. So I don't think there is any way to answer that meaningfully. It's different for everyone.
I totally agree with Ready on the variability of timing, or if it happens at all. Dad did not have dementia. He was just an angry old guy on a tear to take his life back after having spent a decade of their much anticipated retirement caring for a woman who was reduced to much less than the woman he loved by the after effects of a stroke. Fortunately they retired early and had a good 20 years of play time before this happened, but he had always been the one who needed tending, never thinking to survive his bride.

This kind of uncertainty is what one buys insurance for.
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