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View Poll Results: Is/will a purchased annuity part of your retirement income
Have/plan to purchase an annuity for retirement income 22 23.40%
Purchased annuity is/will not be part of my retirement income 72 76.60%
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Old 04-27-2008, 08:18 AM   #41
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The problem is that fearful times like now are the worst times to be paying a "fear premium" on your investments, because the premium is higher now for many products and investments than it would be when so many people didn't think the end was near.
I see your point, and think it is a good one, though I'd like to point out parenthetically that I don't actually know anyone who thinks the end is near. I do know people who think the market is down, that maybe we have entered a modest recessionary phase, and that their home value has dropped almost as much as it back did in the 80's. I haven't heard of anybody jumping out of skyscrapers over these perceptions, though.
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Old 04-27-2008, 08:21 AM   #42
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I see your point, and think it is a good one, though I'd like to point out parenthetically that I don't actually know anyone who thinks the end is near.
Well, when I say "the end is near," I don't mean in the literal "end of the world as we know it" sense but more a sense that things are going to be really bad for quite a few years. Maybe we hang out in different places, but I know a lot of die-hard gold bugs who seem to think the dollar is rapidly going to zero, oil prices are going to infinity, and that guns and ammo are the best investments moving forward. So I hear more than my share of "we're all doomed" kind of talk. I'm just a little weary of the foilhattery.

Funny thing is, contrarian that I am where market sentiment is concerned, the more I hear it, the better I think it will end.
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Old 04-27-2008, 08:27 AM   #43
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Yeah, I hear that Vanguard is coming out with a new weapons and ammo fund.
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Old 04-27-2008, 08:34 AM   #44
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Well, when I say "the end is near," I don't mean in the literal "end of the world as we know it" sense but more a sense that things are going to be really bad for quite a few years. Maybe we hang out in different places, but I know a lot of die-hard gold bugs who seem to think the dollar is rapidly going to zero, oil prices are going to infinity, and that guns and ammo are the best investments moving forward. So I hear more than my share of "we're all doomed" kind of talk. I'm just a little weary of the foilhattery.

Funny thing is, contrarian that I am where market sentiment is concerned, the more I hear it, the better I think it will end.
I'm like that, too!

I don't happen to know anyone at all who is investing in gold, though I know a few who wish they had a couple of years ago! I know some who are pouring everything into target retirement funds and just not looking at the market much any more because they are disgusted. I guess many/most of the Southern men that I know have always had a huge personal stockpile of many dozens of guns, and I know at least one who is putting off buying yet another gun for his arsenal because right now he has other uses for his money. (Fine with me, because I don't like guns one bit though I do like freedom to own them). Lots of complaints about gas prices down here, more than anything, and a lot of reminiscing about the gas lines back around 1980.
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Old 04-27-2008, 08:35 AM   #45
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Funny thing is, contrarian that I am where market sentiment is concerned, the more I hear it, the better I think it will end.
Me too...
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Old 04-27-2008, 08:36 AM   #46
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Yeah, I hear that Vanguard is coming out with a new weapons and ammo fund.
I was thinking "Fidelity Select Survivalism" here.
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Old 04-28-2008, 04:39 PM   #47
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I'm provisionally planning to buy an annuity when life-expectancy is 15 years or less and the income stream it generates (some of which is capital return) is equivalent to what I would have got if I'd invested myself and only taken income without running down capital. (Not sure if these two conditions are in conflict, it's to far in the future for me to be bothered to analyse.)

I am a big fan of the principle behind annuities, and I don't agree their benefits can be replicated by an investor working in isolation.

An annuity invested in a equity fund (in the UK where I am) might (at best) cost 0.75% per year where a direct investment in a similar fund might (at best) cost 0.3%. Over a 15 year period I can live with that difference. In fact if I choose an annuity that allows investment in risky assets I'm more likely to choose to be 100% in a unitised property fund, and I can't actually get that any cheaper as a directly held investment.

If I invest in an annuity, assuming I'm over the age of 70, I get a significantly enhanced income in the form of mortality bonuses as the capital of recently deceased annuitants is redistributed to the survivors. I'm perfectly comfortable with the quid-pro-quo that my capital will similarly get shared out when I go. This extra income over and above anything your own capital generates while you are alive is something you simply cannot get without buying an annuity.

(For the sake of balance I should point out than annuities are as unpopular in the UK as they seem to be on this board, I must be some sort of oddball to like them so much.)
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Old 04-28-2008, 05:24 PM   #48
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....
(For the sake of balance I should point out than annuities are as unpopular in the UK as they seem to be on this board, I must be some sort of oddball to like them so much.)
Hello CJKing, and welcome. No, you are not at all an oddball among those who have posted less than 10 times on this board.
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Old 04-28-2008, 07:09 PM   #49
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cjking, as one oddball to another, welcome aboard.
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Old 04-28-2008, 09:30 PM   #50
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Vanguard

I've recently considered buying a Vanguard life annuity, with inflation protection, for a relative who may need steady income with no worries about managing the funds ... rate was 4.45% in the last week, for a female age 50. Considering it.
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Annuity Confusion reigns
Old 04-29-2008, 12:53 PM   #51
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Annuity Confusion reigns

With all the riders available now, I feel there are very few cases in which a SPIA is the best option. Why give up your principal and immediately shrink your net worth when you can achieve often better outcomes with a GMIB or GWB?
By the way, someone opined that they "hate" EIAs. That's like saying you hate shoes or cars or food. Some are really good, others are terrible. We should never denigrate the power of annuities. Is something sick about an agent who sells a 15% commission, 20 year surrender, forced annuitization product? Absolutely. But there are plenty of excellent indexed products with short- or no -surrender periods, minimal costs and fabulous guarantees. Do your own research.
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Old 04-29-2008, 01:32 PM   #52
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I will either get an annuity or use a dividend stream. My understanding was an annuity pays out around 2%, so if I put in $100,000, I get $2000 back. I can do same thing with a dividend fund like PRFDX which invests in dividend paying stocks and yields 2%, plus gives me the upside of the appreciation. Or I could use a fund like RPSIX which pays out 4% and still gives me that upside for appreciation (just less upside).

I want the annuity to cover what I think utilities will be in ER. Much of it depends on terms of annuity (inflation adjustment?, is it taxed?), payout (is it really 2%?) and how early I retire (the earlier I retire, the more likely I want an annuity).
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Old 04-29-2008, 01:38 PM   #53
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I will either get an annuity or use a dividend stream. My understanding was an annuity pays out around 2%, so if I put in $100,000, I get $2000 back. I can do same thing with a dividend fund like PRFDX which invests in dividend paying stocks and yields 2%, plus gives me the upside of the appreciation. Or I could use a fund like RPSIX which pays out 4% and still gives me that upside for appreciation (just less upside).

I want the annuity to cover what I think utilities will be in ER. Much of it depends on terms of annuity (inflation adjustment?, is it taxed?), payout (is it really 2%?) and how early I retire (the earlier I retire, the more likely I want an annuity).
Why would it be only 2%??
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Old 04-29-2008, 01:49 PM   #54
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You're thinking SPIA (single premium immediate annuity) if you're working with only a 2% payout. There are annuities that guarantee a 6-8% payout for life, even if your principal is fully depleted. Try that with dividends.
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Old 04-29-2008, 02:07 PM   #55
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With all the riders available now, I feel there are very few cases in which a SPIA is the best option. Why give up your principal and immediately shrink your net worth when you can achieve often better outcomes with a GMIB or GWB?
By the way, someone opined that they "hate" EIAs. That's like saying you hate shoes or cars or food. Some are really good, others are terrible. We should never denigrate the power of annuities. Is something sick about an agent who sells a 15% commission, 20 year surrender, forced annuitization product? Absolutely. But there are plenty of excellent indexed products with short- or no -surrender periods, minimal costs and fabulous guarantees. Do your own research.
Great, just what we need. Another scumbag shill annuity salesman. Get the rat poison out...
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Old 04-29-2008, 02:09 PM   #56
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Don't have one and don't plan on it, but if I get very old, very rich and want to put a floor on things for myself (and my survivors), I could see buying a joint COLA-indexed SPIA from a strong company. But that's a pretty unlikely outcome that is 30+ years in the future (if it ever happens).
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Old 04-29-2008, 02:40 PM   #57
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You're thinking SPIA (single premium immediate annuity) if you're working with only a 2% payout. There are annuities that guarantee a 6-8% payout for life, even if your principal is fully depleted. Try that with dividends.
Do we know you??
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Old 04-29-2008, 02:41 PM   #58
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Don't have one and don't plan on it, but if I get very old, very rich and want to put a floor on things for myself (and my survivors), I could see buying a joint COLA-indexed SPIA from a strong company. But that's a pretty unlikely outcome that is 30+ years in the future (if it ever happens).
Maybe ING will have a good one by then.........
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Old 04-29-2008, 02:44 PM   #59
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Maybe ING will have a good one by then.........
ING? Uh, maybe not even then.
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Old 04-29-2008, 02:47 PM   #60
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ING? Uh, maybe not even then.
I think we've discussed this.......you like Hancock because of Manulife, AIG is "ok", Pacific Life is a "maybe", Prudential is ok unless we have a bunch of hurricanes, and the rest suck......am I right??
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