|
|
Variable annuity payout ?
05-20-2021, 08:55 AM
|
#1
|
Dryer sheet aficionado
Join Date: May 2021
Posts: 33
|
Variable annuity payout ?
Couple years away from having to select a payout option. Annuity is with Talcott, was Hartford 30 years ago when purchased. Been lurking here for several months now, only wish I knew then what I know now.
Apologize if the question lacks details. Will have a pension from work, have military pension from my Guard days, this VA is about 20% my retirement savings
|
|
|
|
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!
|
05-20-2021, 12:09 PM
|
#2
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,327
|
What’s the question?
Sometimes people post the exact name of the annuity product and the experts here can look up the details.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
|
|
|
05-20-2021, 07:08 PM
|
#3
|
Dryer sheet aficionado
Join Date: May 2021
Posts: 33
|
Director Series 6 is the annuity I have
|
|
|
05-20-2021, 10:45 PM
|
#4
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,375
|
Most likely there are option in the contract. Go back and review the contract documents. Your agent or the issuing insurer can explain what your options are.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
06-02-2021, 04:04 PM
|
#5
|
Dryer sheet aficionado
Join Date: May 2021
Posts: 33
|
Options are large in number. Full payout, life annuity, payout for x # of years (5-39), 3 versions of Life (period certain, cash or unit refund), joint & last survivor (period certain option). After reading numerous posts on SS timing, seriously considering payout in 5 years so I can delay SS until 68. Not counting this annuity, I've roughly made my number. 3% withdrawal retirement savings + pensions + SS (at 63) would equal my current income. Plan to work until 63, year & half away. Thanks
|
|
|
06-13-2021, 02:27 PM
|
#6
|
Dryer sheet aficionado
Join Date: May 2021
Posts: 33
|
Let me rephrase question another way. What would be the least expensive method of payout options for this annuity?
Talcott Director Series 6 annuity payout options: full payout, life annuity, payout for x # of years (5-39), 3 versions of Life (period certain, cash or unit refund), joint & last survivor (period certain option).
|
|
|
06-13-2021, 02:31 PM
|
#7
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,375
|
I'm guessing that all the options are actuarially neutral... so whichever fits your needs best.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
06-13-2021, 02:36 PM
|
#8
|
Thinks s/he gets paid by the post
Join Date: Oct 2007
Location: Willamette Valley, Oregon
Posts: 1,979
|
Quote:
Originally Posted by BobMW
Options are large in number. Full payout, life annuity, payout for x # of years (5-39), 3 versions of Life (period certain, cash or unit refund), joint & last survivor (period certain option). After reading numerous posts on SS timing, seriously considering payout in 5 years so I can delay SS until 68. Not counting this annuity, I've roughly made my number. 3% withdrawal retirement savings + pensions + SS (at 63) would equal my current income. Plan to work until 63, year & half away. Thanks
|
And are you married, have kids? Would you have a spouse who would need to rely on some survivor benefit with this annuity? Or kids whom you might want to benefit from some remainder value?
With all those options, you have a lot of flexibility to tailor things to best fit your exact needs and situation. If you want decent advice here, you need to provide a lot more situational detail, and what your desires are for this VA to achieve for you.
You seem unhappy with your purchase of the VA product, BUT it is giving you a lot of options and flexibility.
__________________
Dreams Worth Dreaming are Dreams Worth Planning For. I Spent a Career Planning for Early Retirement.
|
|
|
06-13-2021, 02:40 PM
|
#9
|
Thinks s/he gets paid by the post
Join Date: Oct 2007
Location: Willamette Valley, Oregon
Posts: 1,979
|
Quote:
Originally Posted by pb4uski
I'm guessing that all the options are actuarially neutral... so whichever fits your needs best.
|
^ ^ ^
Yes, I agree "actuarially neutral", so determine your needs/desires of what you wish to achieve. Perhaps talk to an experienced agent to get educated on the options and what they do.
__________________
Dreams Worth Dreaming are Dreams Worth Planning For. I Spent a Career Planning for Early Retirement.
|
|
|
06-13-2021, 07:50 PM
|
#10
|
Dryer sheet aficionado
Join Date: May 2021
Posts: 33
|
Thanks, appreciate the input. The payouts being actuarially neutral is a little surprising. Will be following up with an agent.
|
|
|
06-13-2021, 08:06 PM
|
#11
|
Thinks s/he gets paid by the post
Join Date: Apr 2013
Location: Beach and Mountain
Posts: 1,087
|
Bob - I have a Talcott, formerly Hartford, annuity also. Don't annuitize as it gives Talcott another opportunity to make money off of you. You don't need the money so just let it grow. Mine requires that payouts begin by age 95 or so. Eventually take the money out over a few years without annuitizing.
|
|
|
06-14-2021, 07:54 AM
|
#12
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,375
|
Quote:
Originally Posted by BobMW
Thanks, appreciate the input. The payouts being actuarially neutral is a little surprising. Will be following up with an agent.
|
I'm not sure why it is surprising. Typically the company prices these options with the same return on required capital assumptions so the company doesn't particularly care which option you chose... they make the same return on required capital no matter which option that you chose (other than surrendering when after the surrender period).... or at least that is the way my former mutual company employer did it back in the 1990s but I don't think it has changed.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
06-14-2021, 08:36 AM
|
#13
|
Moderator
Join Date: Oct 2010
Posts: 10,725
|
Quote:
Originally Posted by Z3Dreamer
Eventually take the money out over a few years without annuitizing.
|
If this is an option, it might be something to consider. They might have designed it to get their profit even with this option, through fees or something, but worth a look. All gains come out first, so every dollar is regular income. Eventually you unbury your original investment basis, and that comes out as non taxable.
|
|
|
06-14-2021, 09:01 AM
|
#14
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,351
|
Re "actuarilly neutral," this is a statistical concept and obviously the way to run an insurance company's P&L.
But an individual is not a statistic. For an individual the choices are IMO not likely to be financially neutral. The individual's predicted lifetime is probably not that same as the statistical predictions. Good health, long-lived family, poor health, etc. are all relevant. Inflation expectations are also relevant, as is total portfolio value. If total portfolio is large relative to the annuity, then making the wrong decision may not be all that risky in terms of impact. At 20% of retirement savings, that is probably the case here. Not that one does not want to optimize every penny, but it is less important than it would be if the annuity were 80% of the stash and there were no pensions.
[rant[] This idea that I am not a statistic is something I often have to remind doctors about. I am a sample of one. I cannot be, for example, 80% dead. When dealing with a sample of one, statistical information may not be totally irrelevant, but it is also not gospel. The devil is in the individual's details. [/rant]
__________________
Ignoramus et ignorabimus
|
|
|
06-14-2021, 09:51 AM
|
#15
|
Thinks s/he gets paid by the post
Join Date: Apr 2013
Location: Beach and Mountain
Posts: 1,087
|
Quote:
Originally Posted by sengsational
If this is an option, it might be something to consider. They might have designed it to get their profit even with this option, through fees or something, but worth a look. All gains come out first, so every dollar is regular income. Eventually you unbury your original investment basis, and that comes out as non taxable.
|
I have a Talcott, formerly Hartford, Annuity. Mine has such an option.
|
|
|
06-14-2021, 11:11 AM
|
#16
|
Recycles dryer sheets
Join Date: Aug 2006
Posts: 232
|
Quote:
Originally Posted by Z3Dreamer
Eventually take the money out over a few years without annuitizing.
|
This is what I'm doing with my Vanguard Annuity (now TransAmerica). Instead of handing a lump sum over to the insurance company I am taking a monthly systematic withdrawal from my annuity. I can stop it at any time or adjust the monthly draw. This gives me more control of my asset.
|
|
|
06-14-2021, 12:06 PM
|
#17
|
Recycles dryer sheets
Join Date: Apr 2017
Location: Goodyear
Posts: 50
|
You should be able to ask the company for quotes on a few options you’re considering. Run the numbers to judge how they will work for you. I have 4 different annuities (I know, I got them before I wised up... the teaching profession is a prime target market for these things). Smh *♀️
My payout options run the gamut from one with a 10 year period and a couple with 10 and 20 year Life/period certain payouts. I figured this way I covered my bases better for cash flow and longevity considerations. I timed them to begin when some other short-term annuity payouts were ending. Allows me to let my other investments continue to grow before drawing on them.
__________________
"Live like no one else, so that later you can live.... and give... like no one else." Dave Ramsey
~~~~~~~~~~~~~~~~~~~~~~~~~
KMA date: 8/14/15 @ age 55
I’m doing better than I deserve!
|
|
|
06-15-2021, 04:11 AM
|
#18
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,375
|
Quote:
Originally Posted by OldShooter
Re "actuarilly neutral," this is a statistical concept and obviously the way to run an insurance company's P&L.
But an individual is not a statistic. For an individual the choices are IMO not likely to be financially neutral. The individual's predicted lifetime is probably not that same as the statistical predictions. Good health, long-lived family, poor health, etc. are all relevant. Inflation expectations are also relevant, as is total portfolio value. If total portfolio is large relative to the annuity, then making the wrong decision may not be all that risky in terms of impact. At 20% of retirement savings, that is probably the case here. Not that one does not want to optimize every penny, but it is less important than it would be if the annuity were 80% of the stash and there were no pensions.
[rant[] This idea that I am not a statistic is something I often have to remind doctors about. I am a sample of one. I cannot be, for example, 80% dead. When dealing with a sample of one, statistical information may not be totally irrelevant, but it is also not gospel. The devil is in the individual's details. [/rant]
|
That is why insurance works... since the company insures thousands of lives they get the benefit of the law of large numbers... an individual doesn't get that benefit. Elementary.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
06-15-2021, 08:20 AM
|
#19
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,351
|
Quote:
Originally Posted by pb4uski
That is why insurance works... since the company insures thousands of lives they get the benefit of the law of large numbers... an individual doesn't get that benefit. Elementary.
|
Of course. My point was not about the insurance company side; it was to emphasize the OP's side of the decision, where the actuarial numbers may be completely irrelevant. The OP's financial situation and expectations should drive the decision, ignoring the fact that the decision is a don't-care to the insurance company.
__________________
Ignoramus et ignorabimus
|
|
|
07-05-2021, 07:11 PM
|
#20
|
Dryer sheet aficionado
Join Date: May 2021
Posts: 33
|
Quote:
Originally Posted by Z3Dreamer
Bob - I have a Talcott, formerly Hartford, annuity also. Don't annuitize as it gives Talcott another opportunity to make money off of you. You don't need the money so just let it grow. Mine requires that payouts begin by age 95 or so. Eventually take the money out over a few years without annuitizing.
|
Great tip, thanks! Turns out I do have that option and that gives me more flexibility than I thought I had
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
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
|
|
|