Fixed Index Annuities for income in retirement

Thanks. I knew it was high, but I've been seeing elevated charges from some outfits lately.

Depending on asset level, you should be at 1% at the highest and that is if someone can explain the strategy to you and how they are actually going to be doing *something* that makes it worthwhile.

You most likely don't need the annuity for HALF of your money although I can't say you should avoid any annuity, but if you're planning on pulling (not annuitizing) from the annuity every year, it hardly makes sense to do a fixed indexed annuity.

All of this is terribly suspect the more I think of it.

quote:

---

The annuitie doesn't cost anything to open (agent gets paid by annuitie company)

---

What's the annual annuity fee charge? What's the early surrender fee? Or, is it going to immediate annuitization for 10 years?

quote:

---

The growth side comes at 1.75% managing fee.

---

That's a lot... it may be he's charging you here if he's not charging you anything on the annuity side.

Also, what is the fixed rate on the annuity?

Short answer- the advisor wants you to buy a 10 year annuity because it pays him a 7% commission, 1.75% is way too high in fees and he’s “recommending” 4 growth strategies because he has no clue what each does and which is best. Too many red flags. Run!

I can get behind using an annuity with an income rider to create a guaranteed baseline retirement income. However I rarely see situations where a 10 year annuity is the best solution. And if you pull money out of the annuity over the next 10 years during the surrender period you’ll lose all the income benefits so that doesn’t make any sense to me. Also, after meeting with hundreds of people over the years with 10 year+ annuities (I saw a 14 year just yesterday) I find that not only are they routinely unhappy with the product but some are down right pissed when they realize how little flexibility they have. There’s almost always a 5-7 year FIA or VA that does a better job and doesn’t tie up the funds so long. To give you more of an opinion on the annuity I would need the product name, carrier and your age. Caution- there are a bunch of straight up trash 10 year annuities on the market. Does it offer an upfront bonus? Those are usually the worst.

Obviously I don’t know your portfolio balance, but even in a complex strategy with a low account balance you should never pay more than 1.5% and it should go down as the balance increases. If you have enough to go into 4 growth strategies, then 1.75% is likely 2-3 times what you should be paying in fees.

As I mentioned, using 4 growth strategies is a sign he really doesn’t know what to offer or why and he’s probably saying this will be diversification when it’s not. The exception would be if he’s using separate strategies in an asset allocation model (like one for large cap, one for mid cap, one for small cap, one for international) but I doubt it since he wants so much in annuities.

50% of any amount of money into a FIA is almost always too much and it’s 100% too much if the plan is to take it out over the next 10 years. Again the FIA serves no purpose in your scenario other than paying him 7%.

Lastly, do you realize that his “plan” has you depleting or giving up control of all your money with in 10 years? If I’m underStanding it, you’ll be moving from growth strategies to another annuity in 10 years? Where’s the justification for this? Too many variables and I can tell you you won’t do that in 10 years because you’ll be mad about the first annuity outcome.

I’m not anti-annuity but I am anti-annuity salesperson putting people in bad product’s pretending to be a fiduciary. I use annuities occasionally in planning for the right situation.

You really need at least one more opinion. If you’re in the BR area I’d be happy to meet you but if not me then you need to meet with someone qualified

You met with an insurance salesman.

Annuities can work for income in retirement, but nothing about your plan insinuates you’ll be using it for that until you buy one 10 years from now.

The rest of this plan is awful. I mean, it may “work”, but the only one actually making real money will be the “financial advisor.”

You know you’re usually in trouble when you walk out with a couple products and very little planning.

I’ll put it another way - if you walk into an appointment with a prospective financial advisor and walk out with a “plan” in the same day, you’re about to get fricked.

quote:

---

Left side: an annuity. Right:street/stock+bonds. Tactical:stops/bonds/cash. Buffered: annual products like Pnov. T-bills to bring up the 4th. Yes, it looks like 1.75% charge for T-bills as presented on whiteboard.

---

Garbage.

You’re going to be paying 1.75% on tbills and then 2.55% on a buffered ETF between internal fees and the management fee the FA charges?

As an FA, this is poo.

ETA- I hate when people pop into these threads and tell people they know nothing about to “just buy VTI”, but you’ll be better off putting 50% into VTI and lighting the other half on fire.

This “FA” seems like he preys on the public’s fear of the market. Everything on that whiteboard was probably pitched as downside protection and other bullshite. I’m actually a little surprised he didn’t sneak in some precious metals.

ETA.2- how much retirement and tax planning have y’all done before this?

quote:

---

ETA.2- how much retirement and tax planning have y’all done before this?

---

So, I had sessions with more than a handful of FAs over the last 5 years or so. The big guys are stock brokers so it's stocks and bonds. Fisher says they invest in 200+ individual stocks. Others introduce variable annuities or fixed. I haven't found anyone with a plan that I can trust. Ive done a poor job tax planning. I'm 18 months from retirement and I need a plan that I can understand and not be abused fee wise.

quote:

---

I haven't found anyone with a plan that I can trust

---

Keep looking then.