Annuity to supplement income after retirement?

[pb4uski]

Good decision. Congratulations.

 

[Alan]

Good decision. Congratulations.

+1

My thoughts exactly, especially with SS and a pension.

pension + Wellesley dividends is what I currently use. Pension is fixed but SS in a few years should fill the gap from inflation.

 

[clifp]

Bruce it is really important to understand what the guaranteed income rider really means. Essentially the insurance company is offering you a very competitive rate today, with the a chance that you will do better if market goes up. The catch is when it comes time to withdraw the money they are almost certainly offering you a very poor withdrawal rate.

This article by Moshe Milevsky one of the smartest professor about investing is a must read for anybody considering a variable or Fixed income annuity.

 

[BruceinGa]

pension + Wellesley dividends is what I currently use. Pension is fixed but SS in a few years should fill the gap from inflation.

I will have a gap for 5 years, 2014-2019, needing about $10k until I draw SS at age 70. The Wellesley MF may be just what I need.
Thanks

Thanks Clifp for your reply also!

 

[haha]

A lot depends on one's personality. Some say "it works for me", and they consider that it does. Others, and this includes me, want to know everything there is to know about any product. If I can't find out enough about something, I ignore it until I can find out enough, or forever.

I can't think of any reason to buy an annuity of any kind under the present circumstances, though there may be some. To me, they look so generally unpromising that I don't look very deeply.

Ha

 

[BruceinGa]

A lot depends on one's personality. Some say "it works for me", and they consider that it does. Others, and this includes me, want to know everything there is to know about any product. If I can't find out enough about something, I ignore it until I can find out enough, or forever.

I can't think of any reason to buy an annuity of any kind under the present circumstances, though there may be some. To me, they look so generally unpromising that I don't look very deeply.

Ha

I agree about knowing about a produce.

In the past I've been very trusting but after thinking about how this is a large part of our portfolio I'm looking more closely. The agent has misled me as to the ratings of the company and really hasn't shown me much in way of a presentation. Further more I really don't see a purpose for this, other than $ in his pocket. More reasons for me to move on.

 

[rayvt]

The main one is that when the S&P goes up I only receive a % of that increase, the ins company keeps the rest.

Worse yet, they also keep the dividends, which amounts to about 1/3th of the total S&P returns. But they don't come right out and say that, they just let you figure it out on your own --- if you know what to look for.

As for fees, they are there --- just hard to find.

A couple years ago I looked at one of these, and took the 200+ page psospectus home. Look through every page and every footnote and highlight every fee & expense that is mentioned. I came up with 6-8 of these, scattered throughout the 200+ pages. Then I went back and added them all up. The total was somewhere around 6%.

They also play games with the periods that they use in deciding when the S&P has gone up or down -- and the cap hits you a lot more often than you think.

All-in-all, there's a reason why these things are presented along with a nice dinner at a nice restaurant.

 

[ejman]

Every variable annuity I've seen seems to to come with a telephone book like prospectus. Those hundreds of pages tell me that a lot of extremely smart lawyers and accountants have worked very hard to figure out how to s---w me.

 

[Meadbh]

I agree about knowing about a produce.

In the past I've been very trusting but after thinking about how this is a large part of our portfolio I'm looking more closely. The agent has misled me as to the ratings of the company and really hasn't shown me much in way of a presentation. Further more I really don't see a purpose for this, other than $ in his pocket. More reasons for me to move on.

I hope you agree that participation in the forum has already been worth at least the price of admission!

 

[clifp]

I hope you agree that participation in the forum has already been worth at least the price of admission!

I should add that many of us forum member enjoy presenting the other side of the annuity [-]screwing annuity salesman[/-]. So we count it as win when someone says "after further review, the play is reversed"

 

[travelover]

For any kind of insurance product, ask what the penalty is for reversing the deal after the required waiting period. That penalty is mostly likely the salesman's commission.

 

[lynxville]

I will have a gap for 5 years, 2014-2019, needing about $10k until I draw SS at age 70. The Wellesley MF may be just what I need.
Thanks

Thanks Clifp for your reply also!

Have you given any thought to taking SS before 70? I get free lunches all the time in Fl. about annuities and have asked for help here and other places. All I can say is I doubt if the person selling them even understands what there selling. There not what they appear. Also the last one I went to the salesman drove a Mercedes Convertible AMG and admitted he made 90k per month. Exactly where does he get that money?

 

[BruceinGa]

Have you given any thought to taking SS before 70?

As I posted in another thread, I have contacted Social Security Solutions and am waiting for their response.

I really don't need the $ before 70. I'll see what the sssolutions.com people say.