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Old 12-14-2015, 06:10 PM   #41
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If you own a life contingent SPIA in an IRA the SPIA isn't subject to RMDs... the other funds are.
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Old 12-14-2015, 06:38 PM   #42
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You really have to read the fine print on these annuities. My wife was going to roll one over for another 10 years, and they offered her a 9% bonus. In the fine print, it said that the service charge was going to be greater. I ran it through a spreadsheet, and at year 7 she would start to be in the hole.
I showed it to the salesman, and he said he never considered that
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Old 12-14-2015, 06:38 PM   #43
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Recently I read that Vanguard and Fidelity Investments are the only firms that sell immediate annuities that can be purchased with pretax money. Is this correct? If so, then this narrows the scope of my search!
That's certainly not true. As was mentioned it's worth checking out sites like immediateannuities.com and see what they have to offer. They will provide you a quote for several different insurance companies.

While it's wise to be concerned with what insurance company you deal with each state does have a guaranty fund if an insurance company goes belly up. The limit of coverage differs from state to state so if you have a large sum of money you plan to use to purchase an annuity it might be worthwhile looking at spreading it out among different insurance companies so that no one annuity is more than what is covered by your state guaranty fund.
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Old 12-15-2015, 11:12 AM   #44
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You really have to read the fine print on these annuities. My wife was going to roll one over for another 10 years, and they offered her a 9% bonus. In the fine print, it said that the service charge was going to be greater. I ran it through a spreadsheet, and at year 7 she would start to be in the hole.
I showed it to the salesman, and he said he never considered that
With annuities it's important to stick with simple fixed products like an SPIA or a QLAC. When you start combining investments with annuities things get complicated and expensive. If you want investment growth then equities are the way to go, annuities are insurance.
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Old 12-15-2015, 12:37 PM   #45
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+1 the more complexity the more avenues the insurer has to take advantage of you. SPIAs are about as simple as you can get... you pay $x and they pay $y/month for a certain period of for life.
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Old 12-15-2015, 01:13 PM   #46
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I purchased my MetLife annuity through fidelity. All correspondence goes through MetLife, fidelity was just my broker because I have other accounts through them. I have since added more funds to this annuity and changed beneficiaries. MetLife was easy to deal with and their website is pretty straightforward. I will not draw funds until 2018 so I can't help you there.
I too have a pension where I work and I can tell you the peace of mind knowing you'll have two or three paychecks for life is pretty comforting.
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Old 12-15-2015, 03:59 PM   #47
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I too have a pension where I work and I can tell you the peace of mind knowing you'll have two or three paychecks for life is pretty comforting.
+1

There is something to be said for that, over and above the pure economics of the situation. Some people do not function well under a great deal of uncertainty, others thrive on it.
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An Integrity Companies annuity from Vanguard looks promising!
Old 12-19-2015, 05:59 PM   #48
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An Integrity Companies annuity from Vanguard looks promising!

Today I realized that the Vanguard annuity quote is for an annuity that starts a few days before I'm 60, but the Fidelity annuity quote is for an annuity that starts at age 60. Since the annuity quotes on Vanguard's website are for annuities that start paying on the first of the month, I requested another quote for an annuity that starts paying on the first of the month that follows my birthday.

This new Vanguard quote includes a quote from the Integrity Companies, which was one of the companies that was unable to provide me a quote for an annuity that starts when I'm age 59. This quote has the highest initial payment of the 4 companies included in the quote AND it's $41/mo higher than the Fidelity Investments quote! I like the fact that an annuity that I can buy from Vanguard is the highest-performing policy and that it's not from AIG!

Now I have a reason to stick with Vanguard! Does anybody have an opinion of the Integrity Companies?

John Swanson


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Old 12-19-2015, 06:06 PM   #49
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I think that you're probably referring to Integrity Life, which is a Western & Southern subsidiary. If so, they are a solid player.

https://www.westernsouthern.com/industry.asp
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Old 12-19-2015, 07:09 PM   #50
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My god is this complicated.
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Old 12-19-2015, 07:10 PM   #51
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What is complicated elisap?
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Old 12-20-2015, 12:30 AM   #52
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I agree with elisap! Retirement planning takes a great deal of effort and lots of attention to minute details! In addition, there isn't a "one size fits all" solution that will work for everybody! There are plenty of people, like me, who invested money in their 401K to retire on and really don't care that the money disappears when they pass-away! You see, I really can take it with me!

I have enough experience investing that I don't believe that I can rollover my 401K today into an IRA that's invested in stock and bond mutual funds without experiencing considerable losses! This is why I want to purchase a deferred annuity with a 2% annual increase! I like the fact that my annuity will have an inflation adjustment because there's no guarantee that Social Security will have inflation increases in the future! I believe that I'm taking control over my future as best I can!

Since I'm a retired software engineer, I write programs to help me make investing decisions. I wrote one that accepts the initial annuity payment, annual increase percentage, starting year, and the number of years of payments. It generates a table showing the year, monthly payment, and the cumulative payments at the end of each year. The table this program generates convinced me, beyond the shadow of a doubt, that a deferred annuity with a 2% annual increase is exactly what I need!

I believe that I'm a member of a tiny minority of retirees who write software to make investing decisions! I've analyzed the problem and found a solution!
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Old 12-20-2015, 06:54 AM   #53
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Careful there fella.... you may wear out your "!" key.

Quote:
Originally Posted by JohnSwanson View Post
...really don't care that the money disappears ....
It seems to me that annuities are ideal for people like you who don't care if their money disappears.
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Old 12-20-2015, 09:31 AM   #54
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I have enough experience investing that I don't believe that I can rollover my 401K today into an IRA that's invested in stock and bond mutual funds without experiencing considerable losses! This is why I want to purchase a deferred annuity with a 2% annual increase! I like the fact that my annuity will have an inflation adjustment because there's no guarantee that Social Security will have inflation increases in the future! I believe that I'm taking control over my future as best I can!
Why would rolling from a 401k to an IRA necessarily involve losses? I accept that some people believe that the markets might perform poorly in the near future, but that has nothing to do with the rollover.

The 2% annual increase in your deferred annuity is not an inflation adjustment it just drops out of the actuarial calculations because you will be drawing income for a shorter period. If you have actually purchased an COLA'ed annuity I would be careful as they can be poor value for money....you pay too much for the inflation adjustment. A better approach might be to purchase a lower cost fixed annuity and invest the money you save in equities to cover inflation. You might be interested to read some of the papers by Wade Pfau on retirement income and asset allocation.
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Old 12-20-2015, 09:51 AM   #55
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Since I'm a retired software engineer, I write programs to help me make investing decisions.

I believe that I'm a member of a tiny minority of retirees who write software to make investing decisions! I've analyzed the problem and found a solution!
LOL. You don't know this member base very well. It's heavily tilted toward engineer/software types who over analyze everything. Trust me - between the spreadsheets, self written programs, etc. Heck - look at firecalc - which was crowdsourced from this group of people.

Many of us have looked at SPIA options and are considering it when
a) we are older so they are cheaper
b) interest rates improve enough to make them an easier decision.
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Old 12-20-2015, 10:09 AM   #56
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LOL. You don't know this member base very well. It's heavily tilted toward engineer/software types who over analyze everything. Trust me - between the spreadsheets, self written programs, etc. Heck - look at firecalc - which was crowdsourced from this group of people.

Many of us have looked at SPIA options and are considering it when
a) we are older so they are cheaper
b) interest rates improve enough to make them an easier decision.
The OP is actually doing option a) they are talking about a deferred annuity, but point b) is interesting as with interest rates probably increasing it might not be a good time to buy a deferred annuity right now.
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Old 12-20-2015, 10:10 AM   #57
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I agree with elisap! Retirement planning takes a great deal of effort and lots of attention to minute details! In addition, there isn't a "one size fits all" solution that will work for everybody! There are plenty of people, like me, who invested money in their 401K to retire on and really don't care that the money disappears when they pass-away! You see, I really can take it with me!

I have enough experience investing that I don't believe that I can rollover my 401K today into an IRA that's invested in stock and bond mutual funds without experiencing considerable losses! This is why I want to purchase a deferred annuity with a 2% annual increase! I like the fact that my annuity will have an inflation adjustment because there's no guarantee that Social Security will have inflation increases in the future! I believe that I'm taking control over my future as best I can!

Since I'm a retired software engineer, I write programs to help me make investing decisions. I wrote one that accepts the initial annuity payment, annual increase percentage, starting year, and the number of years of payments. It generates a table showing the year, monthly payment, and the cumulative payments at the end of each year. The table this program generates convinced me, beyond the shadow of a doubt, that a deferred annuity with a 2% annual increase is exactly what I need!

I believe that I'm a member of a tiny minority of retirees who write software to make investing decisions! I've analyzed the problem and found a solution!
Agree with you that retirement planning takes a great deal of effort. As they say no pain no gain. I will be calling it quits in Feb at 54. I've been spending time trying to figure out what's the best way of turning 7 figures into a stream of income and comfort for my wife and I. Still lots to learn for me. I don't think annuity is the answer for me.

If you are going through a broker realize they are taking a cut and the company issuing your annuity makes money too. So there is meat left on the bone, you are leaving money on the table. These companies don't operate on charity.

However if the annuity provides the income stream you need and lets you sleep well at night it may be right for you. No one size fits all, everyone has different needs and willingness to accept different risks.
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Old 12-20-2015, 10:29 AM   #58
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Agree with you that retirement planning takes a great deal of effort. As they say no pain no gain. I will be calling it quits in Feb at 54. I've been spending time trying to figure out what's the best way of turning 7 figures into a stream of income and comfort for my wife and I. Still lots to learn for me. I don't think annuity is the answer for me.
I think people have a tough time transitioning from the accumulation to the income phase because they start to plan for the income phase a bit too late. They concentrate on saving enough to retire and then only consider turning it into income as they near retirement.

In 1987 I started to make contributions to a deferred annuity to provide income for my retirement. I now use it as my emergency fund. In 1997 I bought a rental property, also to provide retirement income, and decided to retire once I had all my mortgages paid off thus reducing my need for income. So I haven't done much planning as I approach retirement as most of it was done years ago.
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Old 12-20-2015, 12:00 PM   #59
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...snip...

Since I'm a retired software engineer, I write programs to help me make investing decisions. I wrote one that accepts the initial annuity payment, annual increase percentage, starting year, and the number of years of payments. It generates a table showing the year, monthly payment, and the cumulative payments at the end of each year. The table this program generates convinced me, beyond the shadow of a doubt, that a deferred annuity with a 2% annual increase is exactly what I need!

I believe that I'm a member of a tiny minority of retirees who write software to make investing decisions! I've analyzed the problem and found a solution!
Well I'm a retired software engineer who would not trust my code for such important decesions. I use free software like Firecalc and RIP.

I'm reminded of former a co-w*rker who used their development skills to write algorithms to trade the VIX. They paper traded for months testing the code, that went well. Then real trades, it didn't end well at all.
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Old 12-20-2015, 12:44 PM   #60
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What is complicated elisap?
I'm 55 yo, my husband is retired but not retirement age. I have a business that has been did very well for about 7-8 years but there is now a lot more competition. Because I had to change my focus on taking care of my mother my lack of focus hurt the business.

Luckily I saved and invested about 20% - 25% of the $1 million, mortgage free but do use credit cards for benefits but pay off in full each month. I don't feel comfortable investing more right now. Having to pay for my mom care, also staying with her myself, pay my expenses and the out of hand healthcare insurance premiums it's hard to continue building more wealth and have the time to learn.

So like you I'm trying to set us up to use our money to produce cash flow for retirement years and just now starting to looking into annuities. It's like I'm trying to learn a foreign language. Maybe I'll pick up a annuities for dummies book to start. I need an aha moment because I'm feeling overwhelmed.

So when does that relaxing part come lol
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