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Message
re: Fixed index annuities
Posted on 6/4/19 at 5:41 pm to done dancing
Posted on 6/4/19 at 5:41 pm to done dancing
I’d just take the cash and put it into a basket blue chip dividend paying stocks. Reinvest the dividends.
Your heirs will get a step up upon your passing. They could choose to get a lump sum of cash or they could use the dividend income to live off of.
That’s how you maximize the value given to heirs.
In my eyes the dividends on some good stocks are about as secure as an annuity. Will Coke, Home Depot, UPS, or AT&T go out of business? I’d be willing to bet NO. The difference is that these companies raise their dividends consistently, where it’s very unlikely an annuity will raise its cap or income payment.
Your heirs will get a step up upon your passing. They could choose to get a lump sum of cash or they could use the dividend income to live off of.
That’s how you maximize the value given to heirs.
In my eyes the dividends on some good stocks are about as secure as an annuity. Will Coke, Home Depot, UPS, or AT&T go out of business? I’d be willing to bet NO. The difference is that these companies raise their dividends consistently, where it’s very unlikely an annuity will raise its cap or income payment.
2
Posted on 6/4/19 at 5:53 pm to AugustaTiger
Lol....I just had this same conversation with a friend who is traveling the country in his RV, all paid for in retirement using this strategy. His initial preference was Dollar General, Facebook and Google I believe. Like I said, this is what I wanted to hear. Thanks guys, all of you.
Posted on 6/4/19 at 9:25 pm to done dancing
How old are you?
Posted on 6/5/19 at 8:01 am to meansonny
I'm 57. That's why it's time to consider it. It would fit into what I'm doing but I'm still open to risk in the market and will be for a while so I'm trending away now. Slow and deliberate got me this far I'm in no hurry.
Posted on 6/5/19 at 8:13 am to done dancing
It really just all depends on your appetite for risk. Some folks are ok with getting 4-6% with no downside risk. Others can stomach volatility. Some use this as bond substitute. There is no absolute answer. I would never go longer than 7 years.
Posted on 6/5/19 at 9:02 am to Janky
quote:
I would never go longer than 7 years.
My only beef; how many investors truly hold a bond by intention for 7 years? Of course the surrender penalty keeps investors in the FIAs longer or full term... but any surrender penalty out of a cash need will crush that modest return.
I actually like the products. Just think they deserve as much scrutiny as the loaded up variable products and I don’t believe that is stressed enough when being sold as the “no fee & guaranteed” solution.
Posted on 6/5/19 at 9:20 am to LSUcam7
quote:
My only beef; how many investors truly hold a bond by intention for 7 years? Of course the surrender penalty keeps investors in the FIAs longer or full term... but any surrender penalty out of a cash need will crush that modest return.
A fixed position in a portfolio should always be there especially for someone old enough to consider a FIA.
If you can't keep 25% at most of your portfolio in an annuity for 7 years, then you should not be put in an annuity. I am not talking about someone with $200k assets and putting $100k in a FIA. There would need to be ample liquidity outside to be suitable.
This post was edited on 6/5/19 at 9:22 am
Posted on 6/5/19 at 11:41 am to done dancing
quote:
I'm 57. That's why it's time to consider it. It would fit into what I'm doing but I'm still open to risk in the market and will be for a while so I'm trending away now. Slow and deliberate got me this far I'm in no hurry
I'm just reading your intent with the question.
Have you looked into single pay life insurance?
It provides a tax free benefit to the family upon death. No probate. Generally, the terms are guaranteed upon underwriting approval.
Some plans allow full access to the principal (lower death benefit obviously). These plans also provide tax deferred growth (minimal. But a failsafe in the event you change your mind down the road and want the growth).
Some plans erode the principal (larger death benefit).
Posted on 6/5/19 at 12:58 pm to meansonny
Yes, as I mentioned earlier I believe that could return up to 3% but leave the investment accessible if an emergency arises. And you're correct about the growth. At this point I'm ranking these options and eventually I'll decide. Funny though, I used to abhor insurance based "investments " but now they make sense. Age does thay to you.
Posted on 6/6/19 at 8:08 am to done dancing
Don't buy the Allianz 222 if thats what you're considering.
There's a lot of options and different concepts but only 2 I'm ok with.
One is potential growth. 7 to 10 year. Access 10% any year no penalty. No fees or market downlside. Should capture 50 to 70% upside.
Other is for income generation. The pension concept. Typically a .9 to 1.25 fee to guarantee higher income while deferring at 6 to 10% per year. Then several withdrawal options and rates.
Pros - guarantees, principle protection, only investment vehicle that eliminates longevity risk
Cons - surrender penalties, potential caps, reduced growth compared to market
The fact that an advisor earns compensation when you buy it is not a bad thing. No one works for free
There's a lot of options and different concepts but only 2 I'm ok with.
One is potential growth. 7 to 10 year. Access 10% any year no penalty. No fees or market downlside. Should capture 50 to 70% upside.
Other is for income generation. The pension concept. Typically a .9 to 1.25 fee to guarantee higher income while deferring at 6 to 10% per year. Then several withdrawal options and rates.
Pros - guarantees, principle protection, only investment vehicle that eliminates longevity risk
Cons - surrender penalties, potential caps, reduced growth compared to market
The fact that an advisor earns compensation when you buy it is not a bad thing. No one works for free
Posted on 6/6/19 at 8:36 am to wasteland
quote:
wasteland
Solid post.
Posted on 6/6/19 at 8:42 am to wasteland
quote:
Don't buy the Allianz 222
Baw just verified himself as legit
Posted on 6/6/19 at 9:07 am to wasteland
Bit the bullet and had a meeting. Heard both options you described. I wanted more details and they wanted a quaranteed sale. The premise is fine, just need the right agent. Some people can't get off script and think on their feet when the questions start flying. But I had studied and of course you guys had prepared me.....
Posted on 6/6/19 at 9:08 am to done dancing
Go for one that has a participation rate on the S&p 500 and not one that has a cap with a spread on it
Posted on 6/6/19 at 9:10 am to done dancing
What company did they show you?
Posted on 6/6/19 at 9:29 am to Janky
Presentstion was good, based on S&P500. It hit all the right numbers in length, interest and caps. That's when it got sticky. No specifics on what companies until I was ready to commit. Like I said, premise was fine but not the sellers. I'm sure my OCD put them off lol.
Posted on 6/6/19 at 9:31 am to done dancing
So, they quoted you numbers but wouldn't tell you who was offering them? They didn't show you an illustration or anything? That seems strange.
Posted on 6/6/19 at 9:39 am to Janky
Everything on a whiteboard. No written literature. Tony Robbins type presentation. Realistically they set up meetings and plan to close a certain percentage. It went as I expected. I just have to weed out the opportunist but I have time.
Posted on 6/6/19 at 9:40 am to done dancing
Wow. Was this done out of the back of a van? Good luck.
This post was edited on 6/6/19 at 9:41 am
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