Annuity Owners, please share your experiences.

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The wife has a structured settlement annuity. She was in a wreck when she was young in life and has titanium in her face and a scar on her elbow. I have no clue how much the original payout was, but her parents put the money into a structured annuity. It pays out every 2nd and 3rd year and the amounts increase quite a bit every couple of payments and the last one is like $124k when she turns 50. Think the overall value was somewhere just shy of $700k.

When we were younger and wanting a house, we considered that JG Wentworth or comparable buyout. But we soon realized that is a terrible idea. They wanted to pay something like 12.5 cents on the dollar for the annuity. Someone falsely told us it was something more like $.80 on the dollar but that was WAY off.

If you're not greedy, I'm guessing if you can find someone with a structured settlement annuity that needs some cash now, you could buy either the whole thing or select payouts at $.50 on the dollar pretty easy. Finding those people is probably the real challenge.

suggest you visit the bogleheads board and search under this topic. there are a couple of insurance guys that post alot about SPIA'. there are also several posters that discuss their strategies. One dude in particular buys a new spia each year. dollar cost averaging and creating his own penson. i'm following those threads with interest.

Thanks to all for responding.

What kind of annuity are you considering and for what reason? Sounds like you’re looking at a variable and annuitizing for lifetime income? Is that correct?

Annuities are not for everyone and many on the money board look down on them because they don't return as well as the stock market. I have used then two different ways. Early in our investing career, my wife was risk adverse so we put away whatever we could into a fixed annuity earning 4, 5, 6 or 7% and also maxed out our 401k, 403g, simple, sepp, self directed 401k, etc. The interest grew tax deferred, and kept getting rolled over. We never planned on actually annuitizing, rather looked at it as guaranteed retirement money earning a rate better than a bank. Now that I am closer to retirement, it is one of several sources I will use to balance what I will owe to the IRS from my retirement funds. I have several with different maturity dates that continue to earn 4.5% or higher. They are just a part of a portfolio that contains stocks, bonds, ETF's, mutual funds, etc.. I was comfortable the last few times the market had a downturn and not all of my money was at risk and my losses were not as great.

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Being variable absolutely effects the payout long term

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When you annuitize the annuity, you forfeit all rights to the money in exchange for a monthly or annual check which is preset at the time of the annuitization (there may be an adjustment for inflation... but there is no longer any other type of adjustment).
It essentially becomes like a social security check from an insurance company for as long as you live (with a possible period certain).