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Old 01-04-2010, 04:05 PM   #21
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I think it is terrific you are involving your CPA in this conversation. Money well spent IMO.

Although the simple solution to run away is also worth considering. IMO it is ok to buy an annuity, but never to be sold one. So if you walked into the Prudential office and said I am interested in a variable annuity what do you have than fine. If on the other hand, the Prudential got your name somehow and suggested this would be a good product for you, then you need to be very suspicious.

FJKCT makes some good points. (Although I have sneaky suspicious that he has some connection to the insurance industry).

Quote:
Not many folks use the variable annuities because of the complexity...they blame price and deceptive sales practices, but fact is most are good products you can use in conjunction with other good products, they just require more due diligence (e.g. homework) on the part of both the client and advisor and most folks today are just to lazy to get granular, after all it's only their retirement, it's supposed to be easy isn't it! THINK about it a bank with a mediocre CD rate sells you a CD knowing you can go around the block and pick-up another .75% is that a deceptive sales practice or are you just not doing your homework?
If you stick with your existing bank for a CD instead of shopping around for a better price than the consumer is to blame. Suggesting someone do their homework when shopping for a variable annuity is a different story. These products are exceedingly complicated. They are often designed by the same type of people that gave us CDO and CDO squared. Products which even Alan Greenspan said he couldn't understand..... I am guessing that in many cases the agents don't fully understand them.
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Old 01-04-2010, 05:34 PM   #22
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And VAs expose you lots of acrrier risk. And they are a lot less generous and more expensive than they were 2 years ago. And they are complex enough require an advanced degree to figure out. And they pay large commissions to salesmen.

Scared yet? You should be.
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Old 01-04-2010, 06:23 PM   #23
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I don't know if this still holds true, but Prudential has a very poor history of fraud and deciet in their securities subsidiary back in the 1980's and 1990's. Read Serpent on the Rock, by Eichenwald, or In Good Faith, by Sharp.
Be very careful with these people.
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Old 01-04-2010, 06:41 PM   #24
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We forget to mention that Variable Annuities have some pluses. I'm sure that thousand of kids have attended college thanks to variable annuities. Of course they are the insurance agents kids..
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Old 01-06-2010, 12:02 PM   #25
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Seriously Mary Ellen, here's the solution.
Tin can with secure lid buried in the back yard.
Benefits:
Instant liquidity
You know where your money is and can get to it on your terms.
No fee
No greedy bankers/advisors/agents will make a dime off your hard earned dough.
Fire protection
Unlike under the mattress having it buried is like free fire insurance.
Flood protection
Being buried it can't float away and with a secure lid it should be sealed tight and safe.
Easy to understand
Hey, it's cash in a can...what needs to be explained/disclosed?!

Beyond these passive aggressive jaded strings of non-information just do your due diligence...as I stated earlier there are MANY products that can help you establish a reliable income in retirement and protect you from multiple risks...however it is up to you to do research AND understand what you are getting into. Remember research is not conducting a popularity contest determined by which website you happened to visit...surely had you visited an annuity centric site you would have gotten much different responses that would have been no more helpful than these. Fact is we don't know your exact situation and to offer solutions would be inappropriate. No matter what you choose to buy don't buy until you feel comfortable and understand it in the best case, most likely case and worst case scenarios... if you run all the products you use through this test you should come up with a good mix. It won't be easy but if you truly are concerned about doing the right thing you'll take the time.
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Old 01-06-2010, 12:36 PM   #26
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FJKCT has seen the light. I also would bury my money in the back yard before I ever dealt with a Whole Life/Annuity Agent again.
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Old 01-06-2010, 01:34 PM   #27
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FJKCT has seen the light. I also would bury my money in the back yard before I ever dealt with a Whole Life/Annuity Agent again.
One exception, perhaps. Whole Life can be a good way to do wealth transfer for folks with LARGE estates. By large, I would say $10 million and up. Of course, that involved complex estate planning using ILIT trusts, etc.........
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Old 01-06-2010, 02:03 PM   #28
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FD, I'll call ya when I hit 10M. (heh)
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Old 01-07-2010, 12:13 AM   #29
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One exception, perhaps. Whole Life can be a good way to do wealth transfer for folks with LARGE estates. By large, I would say $10 million and up. Of course, that involved complex estate planning using ILIT trusts, etc.........
Whole life is the worst way to transfer assets for someone with a large estate. Survivorship universal life insurance inside an ILIT is the best way. Whole life inside an ILIT is just throwing money away since you can't touch the cash value anyway. SUL gives you the lowest possible premiums for the biggest death benefit. Cash value is irrelevant in planning for estate taxes.
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