Annuity Advice

[Ronstar]

How about a 1035 exchange to a Vanguard annuity of your choice?

Thanks for the advice. I didn't know vanguard offered annuities. I'll look into it.


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[wfobrien]

Hi. I just found this site. Looking for some advice. I just retired and have a good nest egg. Currently I have the $s divided into 2 strategies...1 a typical diversified portfolio-50/40/10. The larger portion is a tactically managed dividend income interest portfolio.
I am 62...have enough cash for 3 years of spend so I wasnt hitting the $s for 3 years.
The nervous side of me is starting to think of getting a deferred annuity that can start in 3 years....sort of making sure that with SS and the annuity my essentials are covered for life....I wonder whether to have the major bulk of my $s in the market....maybe ladder the strategic $s into CDs?
Just looking for any assistance at this point

 

[Huston55]

2011 - $600K - $30K per year
2012 - $648K - $32.4K
2013 - $699K - $34.9K
2014 - $755K - $37.8K

Update: I am so blessed. It took forever but I finally surrendered my annuity. After surrender charges and other miscellaneous charges, I transferred $630K to Vanguard. I look at it as regaining control and making roughly 1.6% return per year since I put in $600K in April 2011. I just want to thank the smart members of this Board for all the great advice. My DH is on track to retire in April 2016 at 60.5, which is when our house will be fully paid for. We also plan to do the file and suspend at FRA. Thanks again to all of you. Have a great day!

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$630k is ~83.5% of $755k (the April 2014 value of your VA) or, $125k less. But, I agree that's not the best way to view this; what's done is done, and the choice is now btwn two future states. Another way to view this is, at ~60 yo you two have an ~35 yr horizon. To match the VA income in 2014 ($37.8k/yr), you'd need an annual nominal return on $630k of ~4.9%. In today's environment, that's probably a bit of a stretch "risk free" (read: same risk as the VA). But, you can probably get close and, this way you also have control of your own $$$, and there's substantial value in that.

Look into claim and suspend on the SS once you are both 62

You claim and suspend your benefit
Spouse claims and suspends their benefit
then you claim spousal benefit on spouse (50% of benefit?)
and spouse claims spousal benefit on you (50% of benefit?)

Then at age 70, claim your larger benefit on yourself
If both spouses had similar earnings, this might look OK, if one spouse earned >>>> other spouse, then the 50% benefit on lower earning spouse might be a turn off

Might be an end run for tapping into assets sooner, with a higher income at age 70.

Careful with 'claim and suspend.' If you claim and suspend at 62, the surviving spouses benefit is forever discounted by the early claim (62 vs FRA) percentage. Whereas, if you 'claim and suspend' at FRA (~66 yo for you), the surviving spouse gets 100% of the age 70 amount.

 

[Animorph]

Hi. I just found this site. Looking for some advice. I just retired and have a good nest egg. Currently I have the $s divided into 2 strategies...1 a typical diversified portfolio-50/40/10. The larger portion is a tactically managed dividend income interest portfolio.
I am 62...have enough cash for 3 years of spend so I wasnt hitting the $s for 3 years.
The nervous side of me is starting to think of getting a deferred annuity that can start in 3 years....sort of making sure that with SS and the annuity my essentials are covered for life....I wonder whether to have the major bulk of my $s in the market....maybe ladder the strategic $s into CDs?
Just looking for any assistance at this point

You might want to start a new thread for this.

We need a better description of your portfolio to give any useful advice. The 50/40/10 portion sounds reasonable, though maybe high in equities if this is causing you stress already. The "larger portion", is it all dividend producing equities? That brings your equity percentage up considerably. You kind of want to get to a level that you can tolerate and not sell in a down market.

Is that "larger portion" being managed for you? At what cost? Your costs could be eating a lot of your dividend returns.

Simple annuities can provide some nice assurance for your basic spending needs. However, they are not required.

With 40% fixed income and 10% cash you have plenty of spending cushion if stocks crash. Just leave your stocks alone and spend down the cash and fixed income. There's a lot of safety there.

In general, it looks like carrying a big cash buffer just drags your portfolio gains down without providing a whole lot of risk benefit.

For your cash portion, a CD ladder might be good. An online savings account at 0.9% might be just as good or better. A stable value fund in a 401k can also be a great choice. Do either one, but I wouldn't let it sit doing nothing.

 

[samclem]

You might want to start a new thread for this.

He's already posted the same question in this and another existing thread.

Hey, wfobrien--Animorph's point is good, you'll get more assistance if you post a fresh thread with your situation. And most of us read posts from all over this board, so there's no need to post duplicates in several places. Welcome to the board.