Annuity vs 4% rule
- Thread starter lazysundays
- Start date
Our VA's in a basket of non-Vanguard MF 2013, returned 24-27%, The "income account" reset at this higher level, till 2014 where upon it resets more than 5% or stepsup if the MF do not gain 5%.
@bmcfonig: Do not read the articles in #33. Why? because you need to know all of the options available to you. I chose to layoff some of my retirement risk to an annuity company. I also did not give all my risk or did the annuity company want all my risk in the annuity.
@bmcfonig: Do not read the articles in #33. Why? because you need to know all of the options available to you. I chose to layoff some of my retirement risk to an annuity company. I also did not give all my risk or did the annuity company want all my risk in the annuity.
Last edited:
Bestwifeever
Moderator Emeritus
- Joined
- Sep 17, 2007
- Messages
- 17,774
Yet reading the Forbes' series as cited in post #33 will provide much information on the options that are available. How could reading this series be harmful to bmcfonig? The more education, the better before locking into something that likely would be expensive to back out of if one needs to.
Last edited:
^ But the writer didn't write the "whole truth" and that is what you are missing. Which is why I encourage everyone to always look independently to what others say or believe. I make my own investigations and decisions. Do you?
Bestwiveever wrote in the preceeding post, "Yet reading the Forbes' series as cited in post #33 will provide much information on the options that are available. How could reading this series be harmful to bmcfonig? The more education, the better before locking into something that likely would be expensive to back out of if one needs to."
So, rhetorically, Bestwiveever, How "much information on the options" is the reader getting? Is the reader getting ALL of the options, some of the options, selected options for his artlcle, Or if the writer is even writing the truth, but we assume he is. But you will never know, unless you see for your self.
I have said previously that I have seen dozens of presentations for annuities. I see so many because there are so many annuities and no representatives sell them all. I want to see the difference good or bad to what we have, pension, SS, MF, managed accounts, unmanaged account, brokerage.
Bestwiveever wrote in the preceeding post, "Yet reading the Forbes' series as cited in post #33 will provide much information on the options that are available. How could reading this series be harmful to bmcfonig? The more education, the better before locking into something that likely would be expensive to back out of if one needs to."
So, rhetorically, Bestwiveever, How "much information on the options" is the reader getting? Is the reader getting ALL of the options, some of the options, selected options for his artlcle, Or if the writer is even writing the truth, but we assume he is. But you will never know, unless you see for your self.
I have said previously that I have seen dozens of presentations for annuities. I see so many because there are so many annuities and no representatives sell them all. I want to see the difference good or bad to what we have, pension, SS, MF, managed accounts, unmanaged account, brokerage.
REWahoo
Give me a museum and I'll fill it. (Picasso) Give
Yet in the same breath you caution the OP not to read an article because you disagree with the author's conclusions?
I'm calling Bravo Sierra on this one.
- Joined
- Apr 14, 2006
- Messages
- 23,059
It would seem LongPrime is suggesting that one read "presentations for annuities" rather than third party discussions such as the articles cited by REWahoo. Given that these "presentations" are in all likelihood written by the company selling the annuities for the express purpose of selling the annuities, I am not convinced that one would receive more accurate or more complete information by doing so.
P.S. -- You are free to debate the merits of annuities, LongPrime, but the minute you try to sell one here, you'll be gone. Just so you know.
P.S. -- You are free to debate the merits of annuities, LongPrime, but the minute you try to sell one here, you'll be gone. Just so you know.
Last edited:
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Bestwifeever
Moderator Emeritus
- Joined
- Sep 17, 2007
- Messages
- 17,774
Hmm, don't see anyone said bmcfonig should read ONLY the articles cited in post #33. Where do you see that?
I always research major hard-to-get-out-of decisions from many sources, not just the salescritters who stand to gain from them (probably the dozens of presentations they put on are like asking the Honda car salesperson if the Civic is a good car). Most people on these boards probably do even more research than I do, not asking the same questions I do (like, "Does it come in hot pink?").
JPatrick
Thinks s/he gets paid by the post
- Joined
- Jun 3, 2005
- Messages
- 2,610
The market drops in 2000 and 2008 were God's gift to annuity sales peeps.
But when those portfolios got chopped in half, there were some advivors who correctly stated--STOP!!! DON'T SELL AT THE BOTTOM..STAY THE COURSE AND BUY MORE LIKE THE BIG KIDS DO.
I'm sure many who took that advice could tell some sweet stories today. I know I could.
But, I admit, the commisions that follow that kind of advice are on the meager side.
It is not that I don't disagree with Forbes writer in what he said, I do disagree to what the conclusions that he wants us to buy into, because he didn't give the entire range of options and reasons pros/cons.
In our situation, some annuities fit well into our risk and asset management. You can make your own decisions.
In our situation, some annuities fit well into our risk and asset management. You can make your own decisions.
haha
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Thank you, that is very kind. Otherwise I might have thought that I needed to clear my plans with you.
Ha
S/B (sidebar)
Thought questions:
Suppose you don't sell but transferred assets to another investment vehicle?
If you do transfer (purchase) annuity, what advantages would it give you over the previous vehicle?
Are the purchase cost and fees worth the transfer? Or is keeping the existing investment vehicle better?
If the market goes UP, what happens in the new vehicle? Old vehicle?
If the market goes DOWN, what happens in the new vehicle? Old vehicle?
Whole bunch of purchase questions...
Thought questions:
Suppose you don't sell but transferred assets to another investment vehicle?
If you do transfer (purchase) annuity, what advantages would it give you over the previous vehicle?
Are the purchase cost and fees worth the transfer? Or is keeping the existing investment vehicle better?
If the market goes UP, what happens in the new vehicle? Old vehicle?
If the market goes DOWN, what happens in the new vehicle? Old vehicle?
Whole bunch of purchase questions...
JPatrick= "But when those portfolios got chopped in half, there were some advivors who correctly stated--STOP!!! DON'T SELL AT THE BOTTOM..STAY THE COURSE AND BUY MORE LIKE THE BIG KIDS DO."
Funny story: I have a relative who is in Private Banking, with a TARP bank. In 2007 (may be 2008) bank was in trouble and needed to recapitalize. Bank somehow convinced some big private investors and sovereign wealth funds to hold existing shares in Bank but also to invest additional money to buy shares at substantial discount to the $35 share price. Shares dropped to a tenth of the purchase price and remains there today.
DS decided to sell his shares remaining in his UGMA and thus captures the 8x capital gains (was 15x a year earlier). I decided to hold shares and have suffered 10x loss and unfortunately in a tIRA.
Lessons?
Funny story: I have a relative who is in Private Banking, with a TARP bank. In 2007 (may be 2008) bank was in trouble and needed to recapitalize. Bank somehow convinced some big private investors and sovereign wealth funds to hold existing shares in Bank but also to invest additional money to buy shares at substantial discount to the $35 share price. Shares dropped to a tenth of the purchase price and remains there today.
DS decided to sell his shares remaining in his UGMA and thus captures the 8x capital gains (was 15x a year earlier). I decided to hold shares and have suffered 10x loss and unfortunately in a tIRA.
Lessons?
travelover
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Mar 31, 2007
- Messages
- 14,328
Yea, have a diverse portfolio, hold it for the long run - don't panic and sell in a downturn, stay away from annuity salesmen.
JPatrick
Thinks s/he gets paid by the post
- Joined
- Jun 3, 2005
- Messages
- 2,610
Yes, what Travelover said, and I'll add..
*Don't put lotsa eggs in one basket (sorta like diversify)
*No one out smarts Mr Market for long.
ERD50
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Tell me about your hedges. I've used them short term and for specific events, but they are a drag on the portfolio for long term use. IMO, the best 'hedge' is to lower your equity AA.
-ERD50
aja8888
Moderator Emeritus
Lessons, yes, you should have bought some real estate when it went in the tank as that was a no brainer.
Yep--buy the market, or at least significant hunks of it. And do it cheaply. Don't time the market, just rebalance. Stay away from annuity salesmen, sellers of whole life insurance, and financial advisors who get paid by anyone other than the client or who work for a % of AUM.
Richard4444
Full time employment: Posting here.
I plan on purchasing and laddering some SPIAs with a portion of my portfolio that has no need of a financial legacy. Insurance, not investment. I can live with that easily.
An SPIA can make sense, especially if interest rates are attractive, if the investor is older, if the retiree's portfolio/living expenses require annual withdrawals above 4% (Otar's "Red Zone), if a person has few other guaranteed steady income streams (SS, pension, etc), if inflation-protected options can be had at reasonable prices, etc.
