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Fire plan
Old 09-19-2016, 09:59 PM   #1
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Fire plan

What do you think of this plan?
62 yrs. still working until Feb. 2017 (probable) wife 67 retired has modest pension
CFP recommends:
Delay SS to 70 (8 yrs) for me, wife claimed at FRA
Take immediate annuity for 8 years (280k)brokerage acct. for any difference needed
Remaining IRA 1/3= structured note, 2/3 moderate risk fund
At 70 take SS, 2 annuities life time riders, covers basic spending for 20 yrs..without Tax deferred except RMD's

thanks for feedback

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Old 09-19-2016, 11:55 PM   #2
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Could be your CFP wants to sell you an annuity for the commission ?

You don't say what expenses are vs wife modest pension.
Will you get health care coverage ? If not need to think of the expense of that.

It's good IMHO that you are planning to take SS at 70, although one of the reasons for men to do this is to provide a larger SS for their wife after the man statistically had died. Since your wife is 5 yrs older, odds are she will die first or you'll both go at the same time.
It could be argued that you taking SS at FRA would be good enough if you needed the money, since the spouse idea doesn't apply.

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Old 09-20-2016, 06:38 AM   #3
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SS answer depends on each of your amounts and your individual health and life expectancy. What's a "structured note"? Sounds like another annuity. And probably too much annuity component already. Keep in mind you already have SS and pension which are also annuities. Is the CFP a fiduciary or a salesperson?
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Old 09-20-2016, 06:45 AM   #4
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Generally you will not find a lot of support for annuities here. Without knowing your portfolio, it would be difficult to judge whether you could "do it yourself" without paying an insurance carrier to "help" you obtain periodic payments from your stash.

Most here think you can structure your portfolio and take reasonable withdrawals (on the order of 4%) and stand a very good chance of not running out of money - especially if you were willing to occasionally tighten the belt during a market downturn.

Still, annuities can be structured to meet most of your income needs. You just know going in that you are paying the insurance company to take your money and give it back to you in payments. Big issue is that major inflation can defeat even an inflation adjusted annuity. The theory is that, properly structured, your portfolio can survive even with unexpected inflation - of course, who knows till we get there. Oh, and of course, the annuity company might run into their own financial difficulties.

Not saying "no" just "why?" As always, YMMV.
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Old 09-20-2016, 06:56 AM   #5
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Originally Posted by nazoomer View Post
What do you think of this plan?....
I think it is good for your CFP, probably not so good for you.

Take your monthly annuity payments * 96 months and it will probably be close to your $280k premium...meaning that the return that they are paying you is minimal. You would be better off just putting that $280k in an online FDIC insured savings account that pays 1% and arranging an automatic monthly withdrawal for your benefit. That way, if your circumstances change and you need that $280k you can get to whatever is left... you can't do that with the annuity that he is proposing.

Similarly, I'm skeptical about structured notes... after all the limitations and complexities their returns are poor. A bond ETF would be just as good or better.

Use this site to see what you should do on SS.
SSAnalyze - Bedrock Capital Management

Your best bet... create your own annuity for 62 to SS buy taking an amount equal to 8 years of SS payments in an online savings account, put the rest in Vanguard's Wellesley or Wellington funds, ditch the CFP and go have a great retirement.
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Old 09-20-2016, 02:40 PM   #6
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I agree with everyone above.

Also, is it possible that your eventual SS benefits will cover your basic spending?

Do you have a plan for long term care expenses?

I don't see why you would want a "structured note". In particular, you didn't mention what index it was tracking.
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Old 09-20-2016, 04:24 PM   #7
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This, big time, from pb4uski:

"Your best bet... create your own annuity for 62 to SS buy taking an amount equal to 8 years of SS payments in an online savings account, put the rest in Vanguard's Wellesley or Wellington funds, ditch the CFP and go have a great retirement."

Take a deep breath and do it it really is not hard at all. Your CFP is definitely not giving you advice that is good for you, only good for the CFP.

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