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Message
Thoughts on Variable Deferred Annuity
Posted on 9/13/13 at 11:38 am
Posted on 9/13/13 at 11:38 am
I am new here but was wondering what everyone thought about variable deferred annuity. I was thinking about rolling my pension over to an annuity. Thanks for any comments...
6
Posted on 9/13/13 at 1:40 pm to Crimson4ever1
The only people that I have seen that liked annuities are the people that sell them
that being said, I am sure there are situations where they are beneficial, but they are few and far between
that being said, I am sure there are situations where they are beneficial, but they are few and far between
Posted on 9/13/13 at 1:41 pm to Crimson4ever1
This is not the best place to get this type of advice. You need to have an in depth review of your goals for the money before you make any moves with an advisor.
Things to focus on:
1) Time frame and liquidity for the assets
2) Goals (do you already have/need guaranteed income in retirement at this point in your life)
3) Returns inside pension vs. variable annutiy vs. tax deferred retirement account.
I'm going to stop here... There's a lot of things to consider and this deserves a thorough, professional evaluation, especially if you had been working with the company that holds the pension for a long period of time.
Things to focus on:
1) Time frame and liquidity for the assets
2) Goals (do you already have/need guaranteed income in retirement at this point in your life)
3) Returns inside pension vs. variable annutiy vs. tax deferred retirement account.
I'm going to stop here... There's a lot of things to consider and this deserves a thorough, professional evaluation, especially if you had been working with the company that holds the pension for a long period of time.
Posted on 9/13/13 at 1:45 pm to Cmlsu5618
quote:
Thoughts on Variable Deferred Annuity
Don't even think of investing in one. Once interest rates go up, maybe then look at a fix rate. Then you will know that you will get X amount of moneys each month for X amount of time.
Posted on 9/13/13 at 1:51 pm to Crimson4ever1
They give you good options for income during retirement. But I wouldn't put ALL my money in them. I'd be careful who you choose to go with because you want to make sure they are financially strong.
#1 - Look at the insurance company's financial strength rating by ALL the rating companies, not just a couple.
#2 - Compare the annuity fee's to the average mutual fund fee's. There are a couple of companies I've seen who are very comparable to the mutual fund fee's for their annuity product.
#3 - Make sure whoever you talk to understands your situation completely.
These are just a few things I thought of initially. Hope this somewhat helps!
#1 - Look at the insurance company's financial strength rating by ALL the rating companies, not just a couple.
#2 - Compare the annuity fee's to the average mutual fund fee's. There are a couple of companies I've seen who are very comparable to the mutual fund fee's for their annuity product.
#3 - Make sure whoever you talk to understands your situation completely.
These are just a few things I thought of initially. Hope this somewhat helps!
Posted on 9/13/13 at 2:26 pm to fishfighter
quote:
Don't even think of investing in one. Once interest rates go up, maybe then look at a fix rate. Then you will know that you will get X amount of moneys each month for X amount of time.
If I would get a variable annuity due to a pension rollover, I would get one with an income rider when I approach the time of needing it.
Basically in exchange of 1% returns you lock in the variable annuity's highest value as long as you don't withdraw more than 5% or so of that value in a year.
So even if the market crashes, and you keep pulling resulting in a cycle that kills the entire lump sum, as long as you keep to the conditions you'll keep getting a check, even if the annuity is in essentially "negative" numbers.
Posted on 9/13/13 at 2:29 pm to Volvagia
Posted on 9/13/13 at 2:59 pm to Crimson4ever1
Ask your adviser that is trying to sell you the annuity where the insurance company is investing your money. Do a little research and you might be shocked.
If you decide to go forward, make sure the company is very highly rated. Also, do a little research on the companies that were exiting this business.
It is never a good idea to put all your money in just one investment.
If you decide to go forward, make sure the company is very highly rated. Also, do a little research on the companies that were exiting this business.
It is never a good idea to put all your money in just one investment.
Posted on 9/13/13 at 3:12 pm to Blakely Bimbo
speaking of being shocked, ask the adviser what his commission is for buying an annuity
Posted on 9/13/13 at 6:13 pm to Tigerpaw123
Those that understand them will say they make sense for some people. Those that don't understand them will say they suck. It truly depends on the situation.
This post was edited on 9/13/13 at 6:14 pm
Posted on 9/15/13 at 9:20 am to Crimson4ever1
It depends on what your benefit is through the pension. Look at that. then, look at what the monthly benefit of a large insurance company like Lincoln or Prudential would be for investing the lump sum you're thinking about pledging to an annuity. The benefit of rolling over is it will give you pension like income for you and your spouse for both of your lives with a death benefit for your heirs. The company pension won't give a DB to your heirs. My initial thoughts, but I'd have more if I knew more about the situation.
Posted on 9/15/13 at 10:29 am to Blakely Bimbo
quote:
Ask your adviser that is trying to sell you the annuity where the insurance company is investing your money. Do a little research and you might be shocked.
Actually, variable annuity investments are up to the owner. You pick subaccounts that are managed by fund companies. Many of the better annuities have some very popular managers like Pimco, American funds , fidelity, blackrock and so on. There are income benefit riders that make them pretty attractive for a percentage of one's portfolio. They are kinda expensive, but you pay for guarantees that many find attractive. You can create a pension that one cannot outlive and still have access to funds if needed. Back in the day annuities didn't offer much, but now with the living benefit riders they are worth taking a look at. I will be happy to answer any questions.
This post was edited on 9/15/13 at 10:31 am
Posted on 9/15/13 at 11:40 am to Janky
Thanks so much for everyone's comments. I am not putting all of my retirement into the annuity, just a portion of it. It will be an annuity with a GMIB along with a GMDB. My financial advisor is a long time friend who has been very up front with me on the cost of an annuity. It is very important to me that I pass on that I leave something for my sons. I think this might be good along with my life insurance.
Again thanks a bunch for your thoughts.
Again thanks a bunch for your thoughts.
Posted on 9/15/13 at 8:47 pm to Crimson4ever1
I've had a Vanguard one a long time.
Posted on 9/16/13 at 9:29 am to Janky
quote:
Those that understand them will say they make sense for some people. Those that don't understand them will say they suck. It truly depends on the situation.
This they do make sense for some people however I've always thought they were oversubscribed by advisors looking for the big up front commission.
Posted on 9/16/13 at 9:55 am to whodatigahbait
quote:
This they do make sense for some people however I've always thought they were oversubscribed by advisors looking for the big up front commission.
Ok. What if they didn't pay any commission. Would they be a good deal then? I am not attacking you I am curious. We hear this all the time, but if a broker is so morally and ethically bankrupt that he sells them for his benefit and not the client's then there is a problem. At least when you pay a commission on a VA all of your money is invested unlike A share funds. When you pay 5.75% up front and only 94.75% of your money is invested.
Posted on 9/16/13 at 4:03 pm to Crimson4ever1
IMO the VA only makes sense if it's non-qualified. You can roll the pension into an IRA and enjoy the same tax shelter without the high fees of the VA.
This post was edited on 9/16/13 at 4:05 pm
Posted on 9/16/13 at 4:06 pm to Dr Rosenrosen
quote:
You can roll the pension into an IRA and enjoy the same tax shelter without the high fees of the VA.
What about the guaranteed riders? So none of that makes sense huh? Some people.
Posted on 9/16/13 at 4:11 pm to Dr Rosenrosen
quote:
You can roll the pension into an IRA and enjoy the same tax shelter without the high fees of the VA
Like Broke said, you are not paying for the tax deferral you are paying for the guarantees.
Also, I think there is an argument that could be had preaching against using them for non-qualified money becuase you take a capital gains taxable asset and turn it into an income taxable asset.
This post was edited on 9/16/13 at 4:17 pm
Posted on 9/16/13 at 4:20 pm to Janky
Like Broke said, you are not paying for the tax deferral you are paying for the guarantees.
Yes, but at a very high cost.
Yes, but at a very high cost.
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