Looking for article on annuity

[qwerty3656]

If its fixed term and includes return of principal, it's just like a bond, so I would be fine with it. People use these to ladder cash flows

 

[MarieIG]

Not sure I see the problem. I have one in my IRA. It's a 7 year MYGA. The only problem I have with it is that I bought it when interest rates were near zero. At that time, 3.5% interest seemed like a good deal. I took about 20% of my portfolio and put it in the annuity. It's fixed interest, safe money. Seems like a good place for some of my fixed income. I liked it a lot in 2022 when everything else, especially bond funds, took a dive.

As far as getting an article to send him, IMHO, it's time to back away. "he got mad" is your clue to walk away.

It's best to proceed with caution with unsolicited advice to an inlaw . . .

Yeah, you need to find out what type of annuity before immediately concluding that it is bad to buy in an IRA.

MYGAs are just the insurance equivalent of bank CDs but without FDIC coverage (which is why the pay better rates) and surrender charges (which are less of a concern in an IRA where the money is staying put). Same for a period certain annuity that has a competitive IRR.

However there are a whole host of annuity products that are usually bad, whether in an IRA or not.

That said, I generally agree that it is often suboptimal to but tax-free or tax-deferred investments in an IRA, but if I stumbled over an investment grade tax-free municipal bond that paid a good rate compared to a similar garde and maturity CD, I don't see it being a problem.

True.

It is a fee generating investment.... I really do not know what he bought as HE does not know what he bought...


I think you can buy similar to better investments without the big fee going to the FA....


From https://www.immediateannuities.com/annuity-commissions/


As an example, if you purchased a short term (3-4 years) MYGA through our service we would earn a 1% to 2% commission. If your MYGA was for a longer duration (5-10 years) our commission might be 3%. Generally, there are no annual fees with a multi-year guarantee annuity

Typically, that would be the case.

Knowing my BIL it could be something to do with a stock index with a 'minimum' which I am not sure what that is...


I will wait to see if he wants to talk... not willing to give any more unsolicited advice... well, except for an article if one is presented...

Is the horse out of the barn? (i.e. has he already purchased, the time to cancel has expired, and it's a done deal?) It may be better to let it go - although from some of the comments that you made in this thread, it sounds likely that there are a higher amount of fees (commissions whether he sees them or not) built into the product. You may want to get familiar with the types of annuities, pros and cons, before speaking with him about the subject.

Before I left my last employer, their "wealth management" vendor tried to sell me a deferred index annuity with a lifetime guarantee rider - after I broached the possibility of withdrawing a monthly sum from my 401k. I actually read through the 60 page sample contract -which was filled with hypotheticals, and found over 4% of fees squirreled away in there. It was truly ugly.

 

[Texas Proud]

Oh yea.... horse is out the barn and way out of sight...


What I was proposing to BIL is that his FA is not looking out for him as much as he thinks.... sister agrees... says he changed since going to Wells Fargo...


I saw where Wells Fargo charges much higher fees and has even paid fines for bad investments... just a bad company from what I read...

 

[ncbill]

All I want is a MYGA with TIPS-like inflation protection & tax deferral like an I-bond that still lets you withdraw up to 10% annually, paying taxes on anything withdrawn, of course.

 

[ShokWaveRider]

All I want is a MYGA with TIPS-like inflation protection & tax deferral like an I-bond that still lets you withdraw up to 10% annually, paying taxes on anything withdrawn, of course.

We have 2 of those, one can be scheduled to withdraw monthly if we like, but I do not do that.

 

[GenXguy]

once you get away from simple spias , it can be very difficult to know exactly what your deal is with these more complex life annuity products or deferred annuities.

i have looked at quite a few , and while they don’t lie about the guarantees , they don’t exactly tell the whole story .

if anyone is interested i can show you why . it was a product i saw at a seminar and it sounded so good with it’s guarantees . until you looked under the hood

I don't think I would be looking to get one of these at some seminar. Sounds fishy.

I would probably look at Blueprint Income, Stan Annuity Man, and immediateamnuities.com and go from there.

 

[mathjak107]

I don't think I would be looking to get one of these at some seminar. Sounds fishy.

I would probably look at Blueprint Income, Stan Annuity Man, and immediateamnuities.com and go from there.

i have no use for any annuity products but i liked looking under the hood at the gotchas on some of them

 

[MarieIG]

https://www.investopedia.com/articl...es that,fees are passed on to you. More items

It's a rather simple article on annuities.

 

[Lstansbury]

Xactly! Myga interest doesn't trigger taxes until they mature. I have one.

 

[meleana]

SS is our annuities.

 

[Sunset]

10% isn't the rate of return. 10% is an annual free withdrawal allowance.

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The 10% is an annual withdrawal amount allowed without a penalty. NOT interest rate. That is what makes some MYGAs more attractive than CDs for some Seniors. ......

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Thanks.... I read a post the wrong way.

I've seen the 10% penalty free withdrawal offered on some annuities before.