mathjak107
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jul 27, 2005
- Messages
- 6,208
many many banks are making a thrust into selling you an annuity with rates so low. i thought i would give you the heads up on it as it just happened to us saturday.
they all pretty much play out the same so being forewarned is to be forearmed as to just how these work. they all pretty much follow the same layout..
the fine print and pages and pages of stuff was very complex. i did my best to interpret it as best i could and i believe this is what it boiled down to so dont quote me. it is still making my hair hurt as to what that plan is. it takes an mba in finance to figure out that prospectus.
SOOOOOOOOOO yesterday we went to the bank to renew a cd and got pitched an annuity. they said rates are so low and since we had no time frame on the money would we like to see some better options.
i said sure and so the next guy went to work on us with their offering.
i have to say it sounded so good i almost bought it myself lol.
it started out with them promising me a minimum of 10% a year return for 10 years if the annuitywas on myself or 5% a year min if it extended to marilyn too.. if my variable investments were worth less they would increase me to either 5% or 10% min depending which i took. . if i died my wife gets to continue the plan and she gets the 5% minimum option.
thats where it got interesting.
i asked if i could take that money out and of course no you cant.
that 10% a year guarantee are only bonus bucks good towards an annuity conversion into a lifetime income stream..
however heres the catch. you pay expenses on your average yearly account value. those bonus bucks after 10 years have your expenses running double because they are based on that phantom value.
if you started with 100k had 3600.00 a year in expenses before the fund expenses those bonus bucks after 10 years have you paying 7200.00 a year plus fund expenses .
there were options everywhere to add to the plan each one increasing costs as well.
as best as i could tell here are the expenses,and keep in mind historically the return on a 50/50 mix is about 7% when not in an annuity
the expenses below are based on the total account value with the phantom bucks being included they give you.
mortality and expense risk charge 1.10%...
administrative fee .20%
combination enhanced death benefit .45%
beneficiary protector .35%
10% lifetime income option charge 1.2%
10% spousal continuation charge .30%
total 3.60% but we havent included the fund expense fees so tack on another .45 to 1.94% depending what funds you picked..
is that an amazing fee structure for the un-aware?.
they all pretty much play out the same so being forewarned is to be forearmed as to just how these work. they all pretty much follow the same layout..
the fine print and pages and pages of stuff was very complex. i did my best to interpret it as best i could and i believe this is what it boiled down to so dont quote me. it is still making my hair hurt as to what that plan is. it takes an mba in finance to figure out that prospectus.
SOOOOOOOOOO yesterday we went to the bank to renew a cd and got pitched an annuity. they said rates are so low and since we had no time frame on the money would we like to see some better options.
i said sure and so the next guy went to work on us with their offering.
i have to say it sounded so good i almost bought it myself lol.
it started out with them promising me a minimum of 10% a year return for 10 years if the annuitywas on myself or 5% a year min if it extended to marilyn too.. if my variable investments were worth less they would increase me to either 5% or 10% min depending which i took. . if i died my wife gets to continue the plan and she gets the 5% minimum option.
thats where it got interesting.
i asked if i could take that money out and of course no you cant.
that 10% a year guarantee are only bonus bucks good towards an annuity conversion into a lifetime income stream..
however heres the catch. you pay expenses on your average yearly account value. those bonus bucks after 10 years have your expenses running double because they are based on that phantom value.
if you started with 100k had 3600.00 a year in expenses before the fund expenses those bonus bucks after 10 years have you paying 7200.00 a year plus fund expenses .
there were options everywhere to add to the plan each one increasing costs as well.
as best as i could tell here are the expenses,and keep in mind historically the return on a 50/50 mix is about 7% when not in an annuity
the expenses below are based on the total account value with the phantom bucks being included they give you.
mortality and expense risk charge 1.10%...
administrative fee .20%
combination enhanced death benefit .45%
beneficiary protector .35%
10% lifetime income option charge 1.2%
10% spousal continuation charge .30%
total 3.60% but we havent included the fund expense fees so tack on another .45 to 1.94% depending what funds you picked..
is that an amazing fee structure for the un-aware?.