Annuities ?

[HogHunter34]

I see mixed opinions which I guess is the case with most things
I’ve seen the pros & cons
Some can have a long-term health coverage added
Some can be setup as refunded to beneficiaries
Anyone invest in them?
Good options for future fixed income?

[Walker]

Annuities benefits the people who sell them. Go see a fiduciary

[HogHunter34]

^^^ This is insulting to our TBH brain trust. We’ve got experts of all walks of life from medical, retirement, A/C brand, Bow brand, truck repair, vaccines, & even marriage counseling

[TexanDuke]

Sent ya a pm


Sent from my iPhone using Tapatalk

[Throwin Darts]

Annuities benefits the people who sell them. Go see a fiduciary

As someone who used to be in the business I can say this guy is spot on

[tps7742]

Annuities benefits the people who sell them. Go see a fiduciary

Upfront fees are a killer on some. If you do chose to go this route make sure you fully understand everything in the minute details. Variable, fixed etc upfront fees, maintenance etc.

[zztex]

My Fidelity advisor recommended one as part of my retirement plan. I am extremely happy with it

[TeamAmerica]

We ended up with one for my mom through Jackson national.

They are complicated so read through and understand it. Hers is a deferred annuity guaranteed to grow at 6% (minimum but is currently growing at a higher rate since all funds are in the market) for deferral period (tax free) and produce 5.5% annual income for life. It also allows additioanl medical withdrawals without a penalty. For her this will produce about 1/4 of her income.

[ken800]

As finicky as inflation predictions are right now, I'd not lock myself into anything with a fixed rate of return. If inflation starts pushing 5%, a 6% rate of return is a real rate of return of only 1% and you can't live on that. If I were looking at Annuities (and I wouldn't), a REAL rate of return would be my requirement vs. a stated nominal. But, as stated, I wouldn't buy an annuity. Instead I'd buy a 3 or 4-fund portfolio such as the examples on bogleheads and keep my principle.

A better way to ask this question is: would a company offer me a rate of return greater than the market averages? The answer is no. They'd go out of business.

[Burnadell]

We ended up with one for my mom through Jackson national.

They are complicated so read through and understand it. Hers is a deferred annuity guaranteed to grow at 6% (minimum but is currently growing at a higher rate since all funds are in the market) for deferral period (tax free) and produce 5.5% annual income for life. It also allows additioanl medical withdrawals without a penalty. For her this will produce about 1/4 of her income.

Yes, annuities are complex, and different annuities have different features. There are some lousy annuities out there, and there are some fine annuities with guaranteed features that add value, such as stepped up annual death benefits (no matter the market value) and stepped up guaranteed withdrawal features (no matter the market value). When I read blanket statements bashing ALL annuities, like in the posts above this one, it is easy to realize that the posters do not understand all annuities and the benefits of the better ones. Certainly fixed annuities are pitiful, but variable annuities can provide market value growth with guaranteed features that provide real value.

Straight mutual funds do not provide ANY guarantees whereas variable annuities invested in a package a mutual funds provide the owner with a guaranteed return of amount invested in the event of death and some provide annual stepped up death benefits as the principal grows. It is a nice feeling to call a widow and let them know that they will receive considerably more than the market value of their spouses annuity because he/she died during a market downturn, and the death benefit was based on the highest anniversary value, not the current market value. Their mutual funds paid the decreased market value with no guarantee.

As finicky as inflation predictions are right now, I'd not lock myself into anything with a fixed rate of return. If inflation starts pushing 5%, a 6% rate of return is a real rate of return of only 1% and you can't live on that. If I were looking at Annuities (and I wouldn't), a REAL rate of return would be my requirement vs. a stated nominal. But, as stated, I wouldn't buy an annuity. Instead I'd buy a 3 or 4-fund portfolio such as the examples on bogleheads and keep my principle.

A better way to ask this question is: would a company offer me a rate of return greater than the market averages? The answer is no. They'd go out of business.

I agree with your comment about fixed rates of return, but…read my post above. I don’t think you understand the benefits of variable annuities with guaranteed withdrawal benefits and guaranteed death benefits. Your 3-4 fund mutual fund portfolio provides no guarantees.


Disclaimer: I am not recommending any investment here, annuities or other. I am simply trying to clarify the misinformation provided by some posters above who don’t seem to fully understand the different types of annuities.

[HogHunter34]

Thanks Burnadell for a more experienced response. I’m trying to better understand some of the complexities but boiled down they can provide a guaranteed income for life in some cases which who knows how long one will live
Are there any out there that allows your kids to benefit from funds in the case of primary holder & spouse don’t live long into retirement?

[Burnadell]

Thanks Burnadell for a more experienced response. I’m trying to better understand some of the complexities but boiled down they can provide a guaranteed income for life in some cases which who knows how long one will live
Are there any out there that allows your kids to benefit from funds in the case of primary holder & spouse don’t live long into retirement?

Short answer: Yes there are.

[tps7742]

Thanks Burnadell for your insights on the subject matter of annuities.

[jerp]

I’ll just agree with Burnadell. They have their place in but they can be complicated and the problem is often how they are sold. Advisors who only sell annuities will sometimes convince people that is what they need no matter their situation. (When all you have is a hammer everything looks like a nail) It’s rare i talk to someone who owns one with features like a Guaranteed Income Benefit that truly understands what they’ve got

[tps7742]

I’ll just agree with Burnadell. They have their place in but they can be complicated and the problem is often how they are sold. Advisors who only sell annuities will sometimes convince people that is what they need no matter their situation. (When all you have is a hammer everything looks like a nail) It’s rare i talk to someone who owns one with features like a Guaranteed Income Benefit that truly understands what they’ve got

I have one with guaranteed income benefits I have had for a few years. To be honest I didn’t fully understand it when I purchased it. Due to I had been with my adviser for several years I trusted him with the big picture. In my specific situation it will work for a portion of my investments of future income when needed. Of course I have gotten more educated on mine since then and our adviser guided us to the right path in our specific situation.