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One more time, variable annuities....
10-06-2008, 04:58 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Nov 2007
Posts: 1,052
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One more time, variable annuities....
So, we're now in a situation that, provided the insurance companies keep their promise, wouldn't you rather be in a variable annuity with locked in value than in a mutual fund currently down in value?
It may all fail, but as it stands, my VA's are guaranteeing me income based on no lower than my highest watermark, and some VA's will even give a raise if the market rebounds.
Just curious if anyone, anywhere out there is reconsidering their hatred of the product? If not, why?
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10-06-2008, 05:45 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
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 Quote:
Originally Posted by Art G
So, we're now in a situation that, provided the insurance companies keep their promise, wouldn't you rather be in a variable annuity with locked in value than in a mutual fund currently down in value?
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No, absolutely not.
Quote:
Originally Posted by Art G
Just curious if anyone, anywhere out there is reconsidering their hatred of the product? If not, why?
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No, for two reasons: 1) deep concern about that little "provided insurance companies keep their promise" qualifier and 2) conviction beyond a reasonable doubt that those who sell these products are at best, brainwashed, and at worst, pond scum free-floating freshwater green algae.
__________________
Numbers is hard
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10-06-2008, 05:53 PM
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#3
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Feb 2008
Location: East Nowhere, 43N Latitude, NY
Posts: 9,037
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i'm a fixed annuity holder. i like it because there are no surprises. the monthly check is always there with no wizardry involved.
i have no direct exp with VA, but i do know they are universally panned in retirement advice articles.
but if you are having a good experience with them, let's hear about it! that's why we're all here...right?
__________________
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
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10-06-2008, 06:04 PM
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#4
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Administrator
Join Date: Apr 2006
Posts: 23,038
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Nope, still hate them. I would rather suffer a total portfolio meltdown than give even one dime to an annuity salesman.
__________________
Living an analog life in the Digital Age.
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10-06-2008, 06:05 PM
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#5
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Sep 2005
Location: Charleston, SC
Posts: 13,566
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Like Freebird said, if you are having a good experience owning VAs (versus having a good experience selling them), we'd sure like to know about it.
__________________
“One day your life will flash before your eyes. Make sure it's worth watching.”
Gerard Arthur Way
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10-06-2008, 06:10 PM
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#6
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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10-06-2008, 06:16 PM
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#7
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Moderator Emeritus
Join Date: Feb 2005
Location: San Diego
Posts: 5,267
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The sad part is a bunch of unknowing boomers are going to fearfully run into the arms of these VA sale vultures due to this market. "You will never lose money!" ..."who's AIG?"
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10-06-2008, 06:29 PM
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#8
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
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Being a smart ass - I call my 'annuity' Social Security and a small non cola pension.
heh heh heh - 40% of cash flow in retirement in good times and possibly waaaay more when I get in my cheap bastard mode.
Time and inflation will reduce the 40% as I need to spend while I'm not getting any younger.
Pssst - Wellesley = SEC yield 4.93% as of 10/3/08.   per VG's website.
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10-06-2008, 06:30 PM
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#9
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Moderator Emeritus
Join Date: Jun 2007
Location: At The Cafe
Posts: 6,873
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As the holder of an annuity from the defunct Executive Life Assurance Co. HATRED does not begin to express my attitude. But I will moderate myself and refer you to dozens of posts by 2B.
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10-06-2008, 06:36 PM
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#10
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,145
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Seeing what happened to AIG?!?!?! Nope - really don't feel so "safe" about those annuity insurance products.
I love your qualifier "provided the insurance companies keep their promise". That's kind of a big hurdle!
Audrey
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10-06-2008, 07:44 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Jan 2008
Posts: 2,020
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Would that be an annuity with Hartford, getting an infusion from Allianz, or an annuity with Aviva, a company that just reported 30% of it's capital surplus wiped out, or maybe an annuity with AIG, a company selling their life business in the UK to pay off a certain bailout.
I just don't know, I guess I've got a penguin problem.
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10-06-2008, 08:16 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Posts: 2,525
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Hum lets see... Insurance companies invest more or less in the same muck as we all do - Actually worse since they have access to a lot of "sweet stuff" directly. But the facts are recent events have shown no geniuses there. So, they promise a return no matter what the market does. The market dives - where exactly is the money supposed to come from? Maybe more suckers buying their annuities.
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10-06-2008, 08:25 PM
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#13
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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But the rating companies tell us which insurance companies are okay and can be trusted. Not to be confused with the rating companies who told us all those MBS's and financial company bonds were solid.
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10-06-2008, 08:29 PM
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#14
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Posts: 2,525
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Quote:
Originally Posted by samclem
But the rating companies tell us which insurance companies are okay and can be trusted. Not to be confused with the rating companies who told us all those MBS's and financial company bonds were solid.
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Ah yes, the rating companies , the same folks that rated all of those wonderful financial products the whole world bought by the boatload based on their wonderful ratings... That are currently being reflected in a tummy pain or two. Yup
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10-06-2008, 09:12 PM
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#15
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,145
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Quote:
Originally Posted by samclem
But the rating companies tell us which insurance companies are okay and can be trusted. Not to be confused with the rating companies who told us all those MBS's and financial company bonds were solid.
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Good one!
Audrey
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10-07-2008, 05:07 AM
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#16
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Full time employment: Posting here.
Join Date: Jun 2008
Posts: 534
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Tiaa-cref
Isn't the CREF side of TIAA-CREF essentially a variable annuity? If so there must be someone on this board who has used them both in accumulation and drawdown phase. Given TIAA's prevalence on college campus' and the fact 403B's associated with them are the primary retirement account for most in academia their meltdown would be huge. Is that possible?
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10-07-2008, 05:32 AM
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#17
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Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 4,337
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Quote:
Originally Posted by CuppaJoe
As the holder of an annuity from the defunct Executive Life Assurance Co. HATRED does not begin to express my attitude. But I will moderate myself and refer you to dozens of posts by 2B.
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It's great having the right kind of reputation. Don't forget the Lutheran Brotherhood failure. I know a guy that went to his grave pissed at how much he lost in their failure.
I agree that when the dust settles there will be a lot of people sucked into the lure of "can't lose" investing. Of course, we all know that the insurance and financial companies have all learned their lesson and won't over-leverage ever again.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
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10-07-2008, 07:58 AM
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#18
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Thinks s/he gets paid by the post
Join Date: Nov 2007
Posts: 1,052
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Quote:
Originally Posted by Gumby
Nope, still hate them. I would rather suffer a total portfolio meltdown than give even one dime to an annuity salesman.
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LOL! Yes, this is a healthy outlook. I figured some might say this. As an investor, I'm open to anything to grow or protect my wealth.
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10-07-2008, 08:03 AM
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#19
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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Quote:
Originally Posted by Art G
provided the insurance companies keep their promise
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Given the current "situation" you are describing, don't you think this is a little too much of a leap of faith?
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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10-07-2008, 08:41 AM
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#20
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Full time employment: Posting here.
Join Date: Oct 2003
Posts: 961
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Quote:
Originally Posted by Art G
So, we're now in a situation that, provided the insurance companies keep their promise, wouldn't you rather be in a variable annuity with locked in value than in a mutual fund currently down in value?
It may all fail, but as it stands, my VA's are guaranteeing me income based on no lower than my highest watermark, and some VA's will even give a raise if the market rebounds.
Just curious if anyone, anywhere out there is reconsidering their hatred of the product? If not, why?
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Let's see:
1) The fees. Keep on paying north of 2% while I pay 0.15%.
1a) With those high fees, your upside is going to be no better than bonds, unless you're stilll smoking the crack pipe and think stocks are going to return 10% before fees.
2) Taxation. Keep on turning those capital gains and qualified dividends into ordinary income.
3) You can't tax loss harvest while I can.
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