DrgLrd
Recycles dryer sheets
- Joined
- Feb 21, 2022
- Messages
- 106
Unless you Kark it then your heirs lose it.
That's what death riders are for, same as a pension.
Unless you Kark it then your heirs lose it.
We are considering some laddered MYGAs with a 10% rider that you can take out annually.
75% fixed income with 25% equity exposure seems similar to the 75% annuity solution.
I know I need guaranteed income, if you can help with that it'd be appreciated.
What's the difference between fixed income and annuity? If it's that the annuity pays out gradually, and the fixed income (CD, MYGA) only pays out on maturity date, I'll need the annuity.
How to 'take out annually' if they're all 10 year products?
1078 *12 + 1078(1.03) x 12 + 1078(1.03^2)*12+... all the way out to 27 years. Minus a tiny amount for fees or when interest is posted etc.
I You could take $637k of your $1m stash and buy a life annuity that will pay you the high end of your spending of $2,500/month. Then take the remaining $363k and put it in a US large value stock mutual fund that, based on history, would provide for inflation.
Yes. Don't forget that these are one off products meaning thsre is literally only one of these and if someone buys it before you it is gone. This is not a product that is available for multiple people to purchase.That Berkshire annuity is deferred for 3 years? Meaning if you buy it next year, it will start in 2026?
Yes. Don't forget that these are one off products meaning thsre is literally only one of these and if someone buys it before you it is gone. This is not a product that is available for multiple people to purchase.
By the way , I am by no means an expert on these. They are just something I peruse occasionally on the immediate annuities site.
I did not know that, that's pretty surprising, not sure why they wouldn't offer it to everyone, what's their downside? Strange.
As I mentioned these are called secondary market annuities but they are technically called structured settlements. So if someone won a lottery or won a court case for example and instead of getting annual payments thy wanted to cash in early. An insurance company etc would offer to buy them out and then repackage them and sell them. That is pretty much what these are. You can read more about them on the immediate annuities site or others.
Which stand out, those with the highest interest rate? That's helpful because I can compare those with what any FA suggests for me. Of course the highest rates with CoLA mean higher fees which aren't listed there.
Well any annuity type product has fees and expenses. I have no clue what they are. Personally I expect these are not great deals in the current interest rate environment but on the surface they appear slightly better than SPIA's etc. Of course they also have a finite life which may expire before you do!
Good points. I've never purchased either but like to look thru them fairly regularlyGood explanation on structured settlements. I've not actually bought one, but had a couple of thoughts. As I understand it, they are indeed 1 of a kind, whatever gets negotiated as it passes thru various hands. So, details matter hugely & deals can fall through at anytime. It is a contractual agreement, but guarantee is only as good as the company (that is, government doesn't provide fdic, etc).
I think from a buyer point of view the rates aren't as much driven by risk of default as an inefficient market & lack of liquidity. For example on this one, you could get a slightly lower rate on a 30 year ust. Which you can change later, take a cap loss/gain & rebalance, swap to a higher rate, etc. If settlement is bought, good luck selling it at a fair price!
That's not generally true, for two reasons:I wouldn't do that because if the day after you buy the $637k SPIA you get run over by a beer truck then your $637k goes "poof" into the pocket of the insurer.
That's not generally true, for two reasons:
1) I purchased my lifetime annuities with a ten year guarantee period; your estate gets the remainder of your 120 monthly payments if you pass before ten years are up.
I annuitized at age 63, so I didn't pay much additional compared to zero guarantee period.
2) when an annuitant does pass away, whether early or not so early, the conceptual remaining value of his/her account goes into the general pool to pay MORTALITY CREDITS to longer lived annuitants; the insurance company does not get an instant multi-hundred $K bonus...
Presumably, if the pool of insured people benefit from a newly discovered formula for a Long Life Tonic and Energy Enhancing Elixer, then the insurance company probably loses some money or makes less than anticipated. IIRC, that is sort of what happened with the people who bought the first LTC policies. Alas, I was not among them.
It is a contractual agreement, but guarantee is only as good as the company (that is, government doesn't provide fdic, etc).
For example on this one, you could get a slightly lower rate on a 30 year ust. Which you can change later, take a cap loss/gain & rebalance, swap to a higher rate, etc.
States insure annuities, are you saying this wouldn't be insured at the state level?...
One point to note that OP, DrgLrd lives outside of the US. In this case, his annuities may not receive any state guaranty fund protection.
OTOH, if a new elixir came about and extended lives, what they lost from the new elixir on annuities because of longer lives they would make up on the life insurance side as they would be collecting more life insurance premiums due to deffered deaths.