qwerty3656
Full time employment: Posting here.
- Joined
- Nov 17, 2020
- Messages
- 762
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
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.
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.
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
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...
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protection & tax deferral like an I-bond that still lets you withdraw up to 10% annually, paying taxes on anything withdrawn, of course.
I don't think I would be looking to get one of these at some seminar. Sounds fishy.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.
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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