|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
09-03-2015, 11:03 AM
|
#2
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
|
is any insurer offering that product?
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
|
|
|
09-04-2015, 02:58 PM
|
#3
|
Recycles dryer sheets
Join Date: Jun 2010
Location: Southwest Florida
Posts: 470
|
Quote:
Originally Posted by Big_Hitter
is any insurer offering that product?
|
Yes, absolutely. Check Vanguard's Website or immediateannuities.com.
Bruce
|
|
|
09-05-2015, 01:27 AM
|
#4
|
gone traveling
Join Date: Nov 2013
Location: Los Angeles
Posts: 202
|
No. Stay away from annuities.
|
|
|
09-05-2015, 02:25 AM
|
#5
|
Recycles dryer sheets
Join Date: Jul 2013
Posts: 271
|
ETFs_rules you are a broken record. You know it all. SPIA can be right for certain people.
|
|
|
09-05-2015, 03:35 AM
|
#6
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2005
Posts: 6,115
|
yep , you know once someone lumps all annuity products together with one comment their knowledge on the subject is pretty thin .
you can't possibly read the study's and research on the use of spia's and your own investing and just shoot comments from the hip like that .
|
|
|
09-05-2015, 09:28 AM
|
#7
|
Recycles dryer sheets
Join Date: Jun 2010
Location: Southwest Florida
Posts: 470
|
I love his conclusion, "Stocks and bonds together are not risky". Oh, really? That 12 minute tape is one of the most biased, sensationalized and weak arguments against annuities ever presented. He doesn't even address the caveat that says most people should not invest more than about 25-50% of their portfolio in SPIA's. Also, he lumps all forms of annuities together.
Bruce
|
|
|
09-05-2015, 10:20 AM
|
#8
|
gone traveling
Join Date: Nov 2013
Location: Los Angeles
Posts: 202
|
Quote:
Originally Posted by alaska55
ETFs_rules you are a broken record. You know it all. SPIA can be right for certain people.
|
Right for who? People who want to gradually start living in poverty by the time they get to be about 83.
Quote:
you know once someone lumps all annuity products together with one comment their knowledge on the subject is pretty thin.
|
Empty talk.
|
|
|
09-05-2015, 10:24 AM
|
#9
|
gone traveling
Join Date: Nov 2013
Location: Los Angeles
Posts: 202
|
Quote:
Originally Posted by MBMiner
I love his conclusion, "Stocks and bonds together are not risky". Oh, really? That 12 minute tape is one of the most biased, sensationalized and weak arguments against annuities ever presented. He doesn't even address the caveat that says most people should not invest more than about 25-50% of their portfolio in SPIA's. Also, he lumps all forms of annuities together.
Bruce
|
Have you ever studied the performance history of bonds and stocks or are you an insurance salesman? You guys always spread fear by talking about stocks alone. Bonds and stocks balance each other out. When stocks fall money runs to the safety of bonds. Money has to go somewhere.
That's like saying that football teams should have 25% - 50% BAD players. Nonsense.
What annuities do you like? Indexed? Total rubbish. Variable? Junk. SPIA's? Get ready for poverty.
|
|
|
09-05-2015, 10:30 AM
|
#10
|
Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
|
Quote:
Originally Posted by ETFs_Rule
Have you ever studied the performance history of bonds and stocks or are you an insurance salesman? You guys always spread fear by talking about stocks alone. Bonds and stocks balance each other out. When stocks fall money runs to the safety of bonds. Money has to go somewhere.
That's like saying that football teams should have 25% - 50% BAD players. Nonsense.
What annuities do you like? Indexed? Total rubbish. Variable? Junk. SPIA's? Get ready for poverty.
|
Who are "you guys"? In this poll, only 19% of the respondents have more than 75% stocks.
|
|
|
09-05-2015, 10:35 AM
|
#11
|
Moderator Emeritus
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,642
|
Let's see....buy at 65, wait until 85 to collect....(from the article):
"For example, a 65-year-old man who invests $50,000 in an immediate annuity would begin collecting roughly $285 a month starting now for the rest of his life. But if that 65-year-old invests the same $50,000 in a QLAC and delays taking payments until age 85, he would receive almost $2,250 a month for the rest of his life."
Life begins at 85? Where? In a nursing home (certainly not on the golf course)?
__________________
*********Go Astros!*********
|
|
|
09-05-2015, 11:20 AM
|
#12
|
Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
|
Quote:
Originally Posted by aja8888
Let's see....buy at 65, wait until 85 to collect....(from the article):
"For example, a 65-year-old man who invests $50,000 in an immediate annuity would begin collecting roughly $285 a month starting now for the rest of his life. But if that 65-year-old invests the same $50,000 in a QLAC and delays taking payments until age 85, he would receive almost $2,250 a month for the rest of his life."
Life begins at 85? Where? In a nursing home (certainly not on the golf course)?
|
You're correct, that's a bad example. Using the same numbers, I can do this instead:
A 65-year old man who pays $150,000 for an SPIA would get about $10,260 each year for the rest of his life.
But, if that 65-year old man pays $19,000 for a deferred no-surrender-value annuity, he would get about $10,260 per year starting at age 85 and continuing for the rest of his life.
That would leave him with $131,000 to provide income for 20 years, if he lives that long.
Or to provide a lump sum (some portion of the $131,000) for medical or personal care if he develops serious health problems and dies long before 20 years.
Or, to provide an inheritance for his kids if he dies suddenly before 20 years.
I'm not saying the deferred annuity is necessarily better, just that this example shows the trade-offs more clearly.
|
|
|
09-05-2015, 11:40 AM
|
#13
|
Recycles dryer sheets
Join Date: May 2013
Location: The Villages
Posts: 92
|
Why not just wait until 70 to collect Social Security? That way you get a 24% increase in payment with COLA.
|
|
|
09-05-2015, 11:58 AM
|
#14
|
Full time employment: Posting here.
Join Date: Apr 2015
Posts: 903
|
Quote:
Originally Posted by Pbkmaine
Why not just wait until 70 to collect Social Security? That way you get a 24% increase in payment with COLA.
|
Calculating the numbers, SS does seem to be the cheapest longevity insurance you can buy (assuming you're SS eligible).
|
|
|
09-05-2015, 01:48 PM
|
#15
|
Recycles dryer sheets
Join Date: Jun 2010
Location: Southwest Florida
Posts: 470
|
It must be nice to be in the entertainment business and live in a world where everything is black or white. Love those one word answers.
Bruce
Sent from my iPad using Early Retirement Forum
|
|
|
09-05-2015, 07:38 PM
|
#16
|
Thinks s/he gets paid by the post
Join Date: Aug 2009
Posts: 1,577
|
Quote:
Originally Posted by Independent
You're correct, that's a bad example. Using the same numbers, I can do this instead:
A 65-year old man who pays $150,000 for an SPIA would get about $10,260 each year for the rest of his life.
But, if that 65-year old man pays $19,000 for a deferred no-surrender-value annuity, he would get about $10,260 per year starting at age 85 and continuing for the rest of his life.
That would leave him with $131,000 to provide income for 20 years, if he lives that long.
Or to provide a lump sum (some portion of the $131,000) for medical or personal care if he develops serious health problems and dies long before 20 years.
Or, to provide an inheritance for his kids if he dies suddenly before 20 years.
I'm not saying the deferred annuity is necessarily better, just that this example shows the trade-offs more clearly.
|
That 10260 at 85 doesn't account for inflation in the intervening 20 years. Maybe you have to double the 19k for 3% inflation?
If you are thinking of buying an SPIA or a deferred SPIA then the QLAC does offer what can be a nice benefit of excluding up to 135k (I think) of your IRA from RMDs which is the real benefit of a QLAC.
I never understood the rejoinder that says "I have SS therefore don't need annuity" If your SS is large enough to cover your basic expenses great. Some others can't say that. That's where the SPIA or DPIA comes in. One big insolvable in retirement planning is how long you are going to live so u don't run out of money. A SPIA or DPIA allows you to put that aside to a great degree. Yes. For a price. But some like that choice.
Sent from my iPad using Early Retirement Forum
|
|
|
09-05-2015, 08:28 PM
|
#17
|
Moderator Emeritus
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,642
|
Quote:
Originally Posted by bmcgonig
That 10260 at 85 doesn't account for inflation in the intervening 20 years. Maybe you have to double the 19k for 3% inflation?
If you are thinking of buying an SPIA or a deferred SPIA then the QLAC does offer what can be a nice benefit of excluding up to 135k (I think) of your IRA from RMDs which is the real benefit of a QLAC.
I never understood the rejoinder that says "I have SS therefore don't need annuity" If your SS is large enough to cover your basic expenses great. Some others can't say that. That's where the SPIA or DPIA comes in. One big insolvable in retirement planning is how long you are going to live so u don't run out of money. A SPIA or DPIA allows you to put that aside to a great degree. Yes. For a price. But some like that choice.
Sent from my iPad using Early Retirement Forum
|
Look at this life expectancy table and tell me why anybody at 65 would count on dumping a huge sum in this annuity and be planning on getting benefits starting at 85:
USA Life Expectancy Male
Maybe I've been to too many funerals of family and friends who never made it to 85. I'd rather have total control the funds for the 20 years between 65 and 85.
__________________
*********Go Astros!*********
|
|
|
09-05-2015, 10:47 PM
|
#18
|
Thinks s/he gets paid by the post
Join Date: Aug 2009
Posts: 1,577
|
Quote:
Originally Posted by aja8888
Look at this life expectancy table and tell me why anybody at 65 would count on dumping a huge sum in this annuity and be planning on getting benefits starting at 85:
USA Life Expectancy Male
Maybe I've been to too many funerals of family and friends who never made it to 85. I'd rather have total control the funds for the 20 years between 65 and 85.
|
According to this
https://rslic.metlife.com/lic/corpLo...rget=calculate
A healthy 65 yr old man who exercises regularly has a 50% chance of living past 85. He has a 25 % chance of living past 91. That's why people buy annuities. Insurance against that.
Sent from my iPad using Early Retirement Forum
|
|
|
09-05-2015, 11:53 PM
|
#19
|
gone traveling
Join Date: Nov 2013
Location: Los Angeles
Posts: 202
|
Quote:
Originally Posted by Independent
Who are "you guys"? In this poll, only 19% of the respondents have more than 75% stocks.
|
You insurance salesmen.
|
|
|
09-06-2015, 12:42 PM
|
#20
|
Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
|
Quote:
Originally Posted by bmcgonig
That 10260 at 85 doesn't account for inflation in the intervening 20 years. Maybe you have to double the 19k for 3% inflation?
If you are thinking of buying an SPIA or a deferred SPIA then the QLAC does offer what can be a nice benefit of excluding up to 135k (I think) of your IRA from RMDs which is the real benefit of a QLAC.
I never understood the rejoinder that says "I have SS therefore don't need annuity" If your SS is large enough to cover your basic expenses great. Some others can't say that. That's where the SPIA or DPIA comes in. One big insolvable in retirement planning is how long you are going to live so u don't run out of money. A SPIA or DPIA allows you to put that aside to a great degree. Yes. For a price. But some like that choice.
|
Yes, I think that anyone actually buying a "Longevity Annuity" should think about inflation. Of course, I also think that anyone buying a regular SPIA should think about inflation. The very low yields on TIPS make inflation-adjusted private annuities very scarce. But, the QLAC at least gives you the option of guessing an inflation rate and buying accordingly.
I kind of assumed that the buyer really wants income to cover current expenses. So RMDs would be kind of irrelevant.
If we want to think about RMDs, I think buying an SPIA for $150,000 takes $150,000 out of your RMD base. But, it also generates $10,260 of taxable income (in this example). So no real tax savings.
Buying the QLAC for $19,000 takes $19,000 out of your RMD base. So that generates slightly lower RMDs in the near term. Offset, of course, by the additional taxable income in later years.
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|