mathjak107
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jul 27, 2005
- Messages
- 6,210
what prudential did is come out with a variable annuity that is really a fixed annuity but it looks good on paper.
it is a variable annuity with only one option , a bond index .
the shrewd part is they tell you for every year you delay taking withdrawals the income base amount will grow by 5.50% .
but that amount can only be used as a basis for income and not surrender or account value.
you gain a 1/10% increase in withdrawal rate for every year older you get which means although they credit the income base at 5.50% you only get to draw 1/10% of that a year as income.
it really sounds a lot better than it is,.
then depending on your age you get a guaranteed withdrawal rate as a min .
assuming age 85 or so that could get you a 3.50% return . the bond index acts as a sub account and if it goes up your income goes up , as they say.
but the expenses run almost 3% and at best bonds averaged 5.25% the last 30 years so there is noooooooo way ever the bond portion will beat the guaranteed amount . so while a good selling point the reality is no way will you ever beat the income amount and get a boost from the bonds .
it is a variable annuity with only one option , a bond index .
the shrewd part is they tell you for every year you delay taking withdrawals the income base amount will grow by 5.50% .
but that amount can only be used as a basis for income and not surrender or account value.
you gain a 1/10% increase in withdrawal rate for every year older you get which means although they credit the income base at 5.50% you only get to draw 1/10% of that a year as income.
it really sounds a lot better than it is,.
then depending on your age you get a guaranteed withdrawal rate as a min .
assuming age 85 or so that could get you a 3.50% return . the bond index acts as a sub account and if it goes up your income goes up , as they say.
but the expenses run almost 3% and at best bonds averaged 5.25% the last 30 years so there is noooooooo way ever the bond portion will beat the guaranteed amount . so while a good selling point the reality is no way will you ever beat the income amount and get a boost from the bonds .