Annuities

[jospaced]

Last week an insurance company representative was pitching an annuity plan to employees where I work. You invest, and when it's time to withdraw, you can withdraw 5% per year. The withdrawal amount is guaranteed for life. Fees for this are 1.8%. I can't see any sense to doing this. Anyone?

[Deleted]

It is hard to tell without knowing more details about the annuity. Some annuities have come back into fashion after the big downturn in the market a few years ago, but for the most part young, working people are not well served with an annuity of any kind.

[jospaced]

Arch: I'm not young. maybe five years from retirement. At this stage I am trying to set up my income streams, but I think I could do myself what they are pitching.

[Deleted]

Well you can't really do an annuity yourself because the nature of an annuity is that someone else takes the risk and provides you an income stream. That could make sense for you if you wanted to carve take a piece of your investment and turn it into an guaranteed income stream. I wouldn't go with an insurance salesman that was pitching to your office, though.

[jospaced]

Thanks. He made it sound great, but I've been hanging around these boards too long to buy in to it.
Also, I already have a couple of other guaranteed income streams (pensions). Maybe for someone else this would be good, not me.

[Deleted]

I am here to make you smile, Frank!

What did I say that was wrong, though?


When my grandma died we found out that she had a big annuity. I don't think it as the right thing for her, but it sure did well compared to the market at the time.

[danshirley]

Retirement Decisions are way too important to listen to anyone on any of these boards...

Here is a write up from Money Magazine:
money.cnn.com/2010/10/28/pf/expert/investing_annuities.moneymag/index.htm

At least you know who these people are.

and here is a write up from the SEC re variable annuities:
www.sec.gov/investor/pubs/varannty.htm

and here is a more complete guide to annuities from Money :
money.cnn.com/retirement/guide/Annuities/

re: 'The withdrawal amount is guaranteed for life'
Guaranteed by whom??

and finally...this appeard in the Wall Street Journal yesterday:
online.wsj.com/article/SB10001424052748703954004576089761660773344.html

[jospaced]

Thanks, all.

[danshirley]

" they have a great track record of picking investments that under perform for their advertisers who pay them to write the articles they publish"

Frank... do you have a reference for that? Something that, for example, would prove your allegations?

Also: What are YOUR credentials for giving so much financial advice ??

Who are you? What is your education and experience? Can we have references???

Why should anyone believe a word you say... all of which is said without substantiation.


You can make fun of Money magazine (I don't actually read Money myself) but if you are such a financial genius why don't YOU have a job editing a financial magazine or writing a column???

Why are you posting your sage advice on this stupid board???

[danshirley]

ROVO:

I have some concern about individual financial advice being given without compliance with legal requirements.

I haven't looked up the legalities in some time but is there any danger of running afoul of legal requirements here?

[Deleted]

Mar 9, 2011 14:02:27 GMT -5 @danshirley said:

ROVO:

I have some concern about individual financial advice being given without compliance with legal requirements.

I haven't looked up the legalities in some time but is there any danger of running afoul of legal requirements here?

What else do you guys talk about over here if it is not financial advice?

[danshirley]

ARCH:

Talking about financial issues in general is one thing but giving INDIVIDUAL FINANCIAL ADVICE... saying This person should do this thing in his circumstances is illegal without fulfilling a host of requirements.

I fear Frank is stepping over the line... I am simply asking ROVO what he thinks.

[Deleted]

Interesting.

[danshirley]

I am stating a fact... why not invest some time and check it out for your self. Like when they had the "best" 50...40...30...20...10 mutual funds...you just got to own!

Again allegations without proof. Give us a link. Surely if such was going on it has been detected by someone other than you and written about in a reputable source.

Where is it???

I'm not going to 'check it out' I would have to mount a major research project to substantiate such allegations... which I presume you have done ... (and published???) if you are making the allegations.

Where's the link?

[danshirley]

Action away my friend... action away. I don't hide behind names like 'Frank the Impaler' ... I am easy to find.

[rovo]

What do I think? Does it really matter?

People come to the boards all the time looking for opinions and many of us give them our thoughts. I don't know about the "legality" issue. I would think any advice given via a message board should be suspect and only be used by someone to aim him to an area for research.

That said, I do think Frank has the appropriate credentials to allow him to give specific advice .... but .... it is still a message board.

More important to me is this particular message board and in this respect we will remain civil. Those who choose to be uncivil will lose their posting privileges. We will all disagree with each other at some point but we will respectfully disagree.

edit: corrected spelling error.

[Deleted]

I disagree.

[mtntigger]

I agree with Archie's disagreement.... or is it that I disagree with Franks' agreement... Wait, usually, I like to agree with rovo except when I want to give him a hard time...

Anyway, is there ever a good time to choose an annuity or are people paying extra for one to gain the "security"?

[rovo]

I might as well toss my opinion into the fray. I think annuities suck. I also think mutual funds suck. But .... that is just my opinion.

Maybe things have changed but I remember a lot of people getting hurt with specific annuities when they went belly-up and reneged on paying out.

[mtntigger]

That's what I've heard too, but then, why are annuities still around?

[danshirley]

I don't have any annuities as I am stupid enough to think I can do better on my own.
:-)
AND I have a lot of company.

[rovo]

I don't have any annuities as I am stupid enough to think I can do better on my own.

I raise my glass to you. (and the rest of us stupid people)

[domeasingold]

Dan
IMO, I don't think that Frank was giving out "personal investment advise". If you look closely they are general statements of known facts. I believe he has tossed out some important information should anyone need direction but nothing else.
As for Money magazine, how much do you pay for that subscription? Certainly reading that could be considered "Personal investment advise"?

[mtntigger]

They have their place...

Frank, that's what I'm asking. What is their place? Is it just for the security of having one (e.g., widow with a life insurance policy)?
Archie's grandma is a good example. No, it probably wasn't the best idea, but maybe it provided her a sense of security if there was no other steady source of income.

[Deleted]

Mar 9, 2011 15:23:17 GMT -5 @mtntigger said:

They have their place...

Frank, that's what I'm asking. What is their place? Is it just for the security of having one (e.g., widow with a life insurance policy)?
Archie's grandma is a good example. No, it probably wasn't the best idea, but maybe it provided her a sense of security if there was no other steady source of income.

She didn't even get a steady source of income from it. She died before she could start drawing on it. And she died at 89...

[domeasingold]

Frank
I think Dan is pissed because you are treading on his turf.

[mtntigger]

Please don't start any "wars" over here.

[danshirley]

Domer: (where do you people get these names???)

I a not championing or condemning Money Mag. I don't think I have ever even read one. I simply identified those few articles dealing with annuities, read those, thought those articles were well done and relevant and referenced them.
Period.
It was Frank who dismissed those articles because they were in Money. He was the one who said that Money was a phony rag... without substantiation. I am still waiting for the link.

I notice he didn't say anything about the SEC article.
:-)
Lets call an end to this debate... it is getting tiresome, circular and pointless. Frank and I have had our say.
BTW
This is NOT my turf. God forbid. Frank is welcome to it.

[domeasingold]

ND DOMER, Irish, Green, Golden Dome, South Bend, IN - get it? You must be from USC.

[danshirley]

Domer.... It's funny but I STILL have no idea what you are talking about.