Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
VA Owner Vindication
Old 11-26-2010, 06:08 AM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
VA Owner Vindication

Well... maybe!

This is a continuation of the confessions thread but with a shift on the topic.


As I stated, I have considered a SPIA as a viable tool to build our base income. But with interest rates where they are... I was intending to just wait and buy later when I could get a better deal.

My goal for those VAs at the time was to shield the taxes and grow during accumulation. I hadn't put much more thought into them than that. Frankly, I always assumed we would just cash them out at 59.5 and use the lump for income during FIRE. It was not a strategic tool... just a lump sum of money.



Since I dusted off that contract and read it's payout features... and since the GMWB is competitive with a SPIA, I am wondering if I should use those to create the first rung or two in the ladder.

We own these things, I intend to buy some SPIAs to guarantee income. Should those contracts be part of our strategic plan for generating income? The insurance company has a decent rating, the amount would be within the State Guaranty limits. The fees are low.


If I took a variable payout option.... our minimum would seem to be the same as a SPIA today. But I would get some market upside during years the market does well.



What do you think?
__________________

__________________
chinaco is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-26-2010, 10:48 AM   #2
Thinks s/he gets paid by the post
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 2,951
Since I, for one have NO CLUE what GMWB stands for, I will offer one of the two results from my forum search for the term.........
VA with GMWB or GMIB~Confused?
__________________

__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is offline   Reply With Quote
Old 11-26-2010, 11:13 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Quote:
Originally Posted by chinaco View Post
What do you think?
Take a look at the currency markets - dollar getting stronger; stock market off its highs - the past relationship was - dollar stronger, stocks weaker, US treasuries stronger.

Korea, Ireland, Greece, Spain, Portugal problems plus if holiday sales are viewed negatively US treasuries will do well in the short term.
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 11-26-2010, 12:07 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
I posted the wrong guarantee. It is not A GMWB. There is a Guaranteed Minimum Payout when it is annuitized whether the payout option is Fixed or Variable.

For Fixed, I assume that if interest rates are up when a contract owner annuitizes they could be offered a higher rate.

For variable it looks like the minimum that will be paid is the guaranteed rate. But if the investment choices perform well, one will receive a higher payout (than the minimum).
__________________
chinaco is offline   Reply With Quote
Old 11-26-2010, 12:51 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by chinaco View Post
I posted the wrong guarantee. It is not A GMWB. There is a Guaranteed Minimum Payout when it is annuitized whether the payout option is Fixed or Variable.

For Fixed, I assume that if interest rates are up when a contract owner annuitizes they could be offered a higher rate.

For variable it looks like the minimum that will be paid is the guaranteed rate. But if the investment choices perform well, one will receive a higher payout (than the minimum).
The annuitization depends on whether it is an older policy or not. Most newer GMWB's do NOT require annuitization to get the guaranteed payout.
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 11-26-2010, 01:00 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
Quote:
Originally Posted by FinanceDude View Post
The annuitization depends on whether it is an older policy or not. Most newer GMWB's do NOT require annuitization to get the guaranteed payout.

It was purchased in the early 90's. Looking at the contract, it appears to only be on the payout.

The contract does use specific language like GMIB... but in the Annuity Tables for annuity payout... it lists the Guaranteed minimum payout factor for each gender and age for Single Life and SL with several period certain options. There is also a factor table for Joint Life.
__________________

__________________
chinaco is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Confessions of a VA Owner chinaco FIRE and Money 5 11-26-2010 12:09 PM
Checking in - about to be a home owner DaveNineFive Hi, I am... 12 02-25-2010 04:05 PM
owner financing lazygood4nothinbum FIRE and Money 19 08-21-2008 09:58 AM

 

 
All times are GMT -6. The time now is 10:42 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.