You know that question you asked nearly eight years ago about equity indexed annuities?I am looking to protect some of my assets in the form of an annuity. Rates for fixed annuities are very low. Any thoughts on VA's- advice and or specific products would be appreciated. Fed up with the roller coaster!!!
At present, there are no good ways (that I know of) to take risk off the table with much of an outlook for real return. I'd buy a SPIA before a VA under any circumstances I can think of...but as your OP noted, now is a horrible time to buy a SPIA if you can afford to wait (most likely for years).I appreciate your responses re VA's. My problem remains.Given the history and experience of the group, I would appreciate ideas that meet the issue stated earlier. Good Investment ideas for a portion of assets that take risk off the table. Thanks
Can you more precisely describe what kinds of risk you are worried about? Inflation risk? Fluctuations of the value of your investment (even if, long term, the particular investment has always gone up?). Risk of default? Currency risk?Good Investment ideas for a portion of assets that take risk off the table. Thanks
I appreciate your responses re VA's. My problem remains.Given the history and experience of the group, I would appreciate ideas that meet the issue stated earlier. Good Investment ideas for a portion of assets that take risk off the table. Thanks
For an extremely risk-averse investor it's a method to participate in the equities market while risking no losses. You'd give away some of the "upside" potential, and you might lose some buying power to inflation, but if you start with $100K, you're guaranteed to have at least $100K 18 months later.Banks, brokers and (especially) insurance agents love to sell a product that has a very mouth-watering top line pitch: equity market upside without the risk of losing money. Unfortunately, the reason they love to sell these products is that the commissions to the salesperson are typically fairly generous and the economics of the product are attractive to the bank or insurance company underwriting the paper. These products go by various names, most commonly appearing in the form of an equity indexed CD, equity indexed annuity, or fixed indexed annuity. Due to the very simple construction of these products, they are actually quite easy and cheap to reproduce in under 30 minutes a year in your very own brokerage account, giving you much better returns and offering a lot more flexibility.
If you want to take risk off the table, then buy a single-premium immediate annuity. You could buy one now, or you could wait a few years to see how your retirement portfolio is doing.Good Investment ideas for a portion of assets that take risk off the table. Thanks
I appreciate your responses re VA's. My problem remains.Given the history and experience of the group, I would appreciate ideas that meet the issue stated earlier. Good Investment ideas for a portion of assets that take risk off the table. Thanks
I must disagree. There is a free lunch but only if you don't buy the VA the guy's selling.I have to keep remembering- there's no free lunch!
I'm not sure what you mean by "deferred" VA. In my VG VA (like any VA) the money does grow (hopefully) tax-deferred. The expenses are low for an annuity (but not as low as owning the comparable VG MFs outside of an annuity.) There are no sales commissions or surrender charges. That said, here are the disadvantages of a VG (or Fido or TIAA-CREF) VA compared to comparable mutual funds (assuming you are funding either with post-tax dollars):What about vanguard deferred VA cost are not bad around .50 that is low. It grows tax deferred. ?