Re: Personal Pension Annuity

[charlie]

Re: Personal Pension Annuity

GDER,

Here is a good link for immediate annuities that
I stole from another thread:

http://www.immediateannuities.com/

I sort of like your idea and have been thinking
about converting my wife's IRA to an immediate
annuity when she reaches 70 in 7 years.

Cheers,

Charlie

 

[charlie]

Re: Personal Pension Annuity

GDER,

Thanks for the info. Would you please post USAA's
website? I can't seem to find them on Google.

Thanks,

Charlie

 

[JWR1945]

Re: Personal Pension Annuity

GDER

Guaranteed growth. You'll always earn at least the guaranteed minimum interest rate.
No commissions or annual fees.
Current Interest Rates - As of 05/22/2004
Contract Balance Interest Rate
Up to $9,999 5.00%
$10,000 - $24,999 5.25%
$25,000 - $49,999 5.41%
$50,000 - $99,999 5.52%
$100,000 - $499,999 5.60%
$500,000 - $999,999 5.67%
$1,000,000 or more 5.73%
Guaranteed minimum rate 1.50%

I think that this is the catch. You are not guaranteed an interest rate above the minimum. Apparently, there is a floating rate structure.

Have fun.

John R.

 

[mickeyd]

Re: Personal Pension Annuity

BTW USAA life insurance and investment products, including annuities, are not limited to military folks.  Only Property and Casualty (Auto/HO/Umbrella) products require a military connection.

USAA is an excellent company and very honest and upstanding.  But they also have to make a profit, as any company does.  As John R. has indicated, the 1.50% minimum is the only contractual obligation that the contract provides.  As with any annuity, you are making a trade-off on your investment.  

SS is pretty much a guarantee.  Not sure why you need another guarantee on top of SS  in your investment mix, but if you are sure that you need an annuity and would rather pay USAA than invest the same amount of money on your own, you can't select a better life insurance company to deal with.

 

[cute fuzzy bunny]

Re: Personal Pension Annuity

SS is pretty much a guarantee. Not sure why you need another guarantee on top of SS in your investment mix

Did you forget a wink smilie on the end of this?

 

[mickeyd]

Re: Personal Pension Annuity

TH,

If you can't trust the US Gumment, who can you trust?

 

[cute fuzzy bunny]

Re: Personal Pension Annuity

Thanks for the smilie at the end of that one. The frowny teardrop one might have worked too.

I always do my planning considering I wont get SS, and if I do get something, thats going to have to be a bonus. Would be nice considering I put a freaking ton of money into the system.

I looked at several annuities. Nothing seemed to grab me. Most of them looked like a good deal for someone who feels stuff like vanguard target retirement income or vanguard wellesley looks a little too racy.

I'd roll the cash up into a balanced fund in the 40/60 to 60/40 range, wait until I wanted the income and then buy the longest, highest yielding CD's I could find. I suspect you'll do better 99% of the time.

 

[JWR1945]

Re: Personal Pension Annuity

What am I missing here? Can't you do at least this well with high quality corporate bonds [held to maturity]? Are we talking about anything besides having a tax advantaged account?

Have fun.

John R.

 

[charlie]

Re: Personal Pension Annuity

GDER,

Out of curiosity I did the math and confirmed that
a $150k investment at 5.6% would give you $20k
per year for 10 years.

Like JRW1945 suggested, you might be able to do
better buying a ladder of orporate bonds. Another
thought would be to buy I bonds to cover years 5-10.
and use USAA to cover the 1st 5 years. I suspect that on average you might do better than 5.6% total yield
and you would get some inflation protection to boot.

Cheers,

Charlie

 

[charlie]

Re: Personal Pension Annuity

GDER,

Cashing I-bonds as you need them sounds dirt simple
to me. You get inflation protection and more control
to boot. I bet your I-bonds will average more than
5.6% over the next 10 years and you get tax deferral
at the same time. Some would kill to be in your shoes.

Cheers,

Charlie

 

[charlie]

Re: Personal Pension Annuity

GDER,

Sorry, I meant no offense. BTW, I checked out
the I-bond earning rates on the gov website here:

http://www.publicdebt.treas.gov/sav/sbirate2.htmov

I was surprised to see that bonds purchased in
2001 and earlier are now earning more than 5%.

It would be a shame to cash them in earlier than
needed.

Regards,

Charlie

 

[mickeyd]

Re: Personal Pension Annuity

GDER,

I agree with Charlie on this one.  Since you are age 50 now, why give up your flexibility for an a immediate annuity that will tie up your money and take control away from you?  

The bottom line: what would help you sleep easier at night for the next 12 years? Annuity or not?