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Swiss Annuity
Old 05-30-2011, 05:52 AM   #1
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Swiss Annuity

I have made several Annuity posts.... I am not an annuity shill...

I am approaching FIRE and just seeking information and learning about how to build a solid income strategy. So hold the slings and arrows.

Someone mentioned Swiss Annuities. I took a quick look out of curiosity.

Here is a pamphlet on the topic. I cannot vouch for its accuracy.... caveat emptor! But since I found it I thought I would put up a link for others who might be researching annuity options.


This document is the International Edition.

Quote:
This edition of The Consumer’s Guide to Swiss Annuities™ is not intended for use
by American nationals or residents. Some products and product options covered in this
edition are not compliant with US tax and securities law. The publisher has available
an edition of The Consumer’s Guide which is US compliant.
http://www.swissannuityconsumerburea...eSwissIntl.pdf

It looks like the US [compliant] edition can be purchased here.

http://www.yourshop.biz/swissannuity/


Here is a document that is targeted at American Nationals. But it looks like it is from some sort of insurance agency.... might just be marketing lit!

http://gonthiergroup.com/images/pdf/...stUSprint5.pdf

According to one web site, fixed (swiss) annuities are not tax deferred on the accrued income.

Tax Treatment given to Swiss Annuity

It appears that some of the fixed products can be available in other currencies.

Swiss Fixed Annuity Plan - Tailored for Growth and Safety


Are Swiss Annuities legit? If so, are they a good idea or just a potential complication that is not needed? For example tax issues with the IRS... Or do they offer an effective approach to hedging against the U$D?


Here is an interesting article. :

Quote:
Swiss fixed annuity is a debt instrument, that is, a “promise to pay a sum certain,” in addition to being an insurance contract. Accordingly, the owner of a Swiss fixed annuity (as well as other foreign annuities that are seen as debt instruments) pays tax on the income that accrues, including currency gains if the annuity is denominated in a foreign currency.

http://www.financialadvisormagazine....y-annuity.html
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Old 05-30-2011, 06:02 AM   #2
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Quote:
Originally Posted by chinaco View Post
I am not an annuity shill...
What is that, exactly?

Heck, I've made many "annuity" posts (specifically talking about the SPIA option, and how it worked for DW/me).

If you garner any info from my posts on the subject since I actually have an annuity product, rather than just give an opinion on a product I don't own or use (as many do on this subject), then fine.

If you have a question, concern, or even a story to tell based upon a subject that you actually have experience with, that does not mean you are a shill, IMHO. In your case, you are requesting further info on a product you are considering; nothing wrong with that at all.

I would also like to hear about anybody who actually has a Swiss Annuity. While I know very little about them, my ignorance of the product (based upon feedback from actual "customers") has kept me from persuing the option. However, I too would be interested in hearing from those that actually have - or have done extensive research on the product.
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Old 05-30-2011, 06:28 AM   #3
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I saw an illustration that shows how the Swiss Franc has held up against the U$D, BP and other currencies.

One has to wonder if that sort of trend is sustainable or subject to mean reversion... or given the changes in the worlds economy if that backward view will not be the forward view.
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Old 05-30-2011, 06:29 AM   #4
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Originally Posted by rescueme View Post
What is that, exactly?

...
I am not advocating that other people should buy an annuity! I have not interest in trying to convince others to do so. I am definitely not advocating a Swiss Annuity...

This particular thread is for discussion purposes and to see if others have looked into Swiss Annuities and what they learned.
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Old 05-30-2011, 07:25 AM   #5
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It looks like the USD is pretty low compared to the Swiss Franc.

It appear that Swiss Franc prices are tracking gold prices to some degree (against the USD).

Swiss Franc and Gold
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Old 05-30-2011, 07:25 AM   #6
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If you are a US citizen I'd stay away from foreign accounts and investments just because of the complications the add to your taxes. Many such products do not comply with US tax law and the IRS will impose hefty penalties if you don't do your taxes correctly. This is the world of FBAR, FATCA and PFIC and it is a lonely are scary world.

These annuities may get around certain laws, but are they really worth the trouble?
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Old 05-30-2011, 07:27 AM   #7
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I have not done extensive research into Swiss Annuities. However, I am delighted to hear the news that you are not a shill for Swiss Annuities. Opinions from shills (owners of the product or not) tend to be favorably biased towards the product and their opinions are not very useful.
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Old 05-30-2011, 08:34 AM   #8
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Originally Posted by nun View Post
This is the world of FBAR, FATCA and PFIC and it is a lonely are scary world.
I can't comment on the good or bad points of the annuities themselves. But before getting involved with any offshore account, heed nun's wise comments. Proceed only if you're up for the complexities, and understand fully the reporting and declarations involved.

It's proposed that (FATCA) Form 8938 will be included in all 1040 returns (if applicable) from 2011 onwards. You may be required to file this form and FBAR. You may also be required to file Schedule B (independently), even if you were to fall below the income thresholds for filing 1040.
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Old 05-31-2011, 10:43 AM   #9
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Originally Posted by theOAP View Post
I can't comment on the good or bad points of the annuities themselves. But before getting involved with any offshore account, heed nun's wise comments. Proceed only if you're up for the complexities, and understand fully the reporting and declarations involved.
Hi, are you the same "the OAP" as at UK-yankee? If so hi, if not, what a coincidence!
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Old 05-31-2011, 11:59 AM   #10
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Would not touch it. If you want exposure to the Swiss franc, there are plenty of simpler ways to do it without potentially labelling yourself the IRS' b!tch.
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Old 05-31-2011, 02:26 PM   #11
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Originally Posted by nun View Post
Hi, are you the same "the OAP" as at UK-yankee? If so hi, if not, what a coincidence!
Yep, tis I.

Having crossed posts many times, I'm sure you could understand my near heart failure when I read the OP. Had to add my 2 pence. Not advising one way or the other, just wanted to make sure everybody understood the consequences. Cheers mate.
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