Comments on: How To Use Variable Annuities the Right Way http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/ Amateur Asset Allocator Thu, 18 Mar 2010 11:01:22 +0000 http://wordpress.org/?v=2.9 hourly 1 By: How To Compare An Immediate Annuity Online Before Buying - Amateur Asset Allocator http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/comment-page-1/#comment-6018 How To Compare An Immediate Annuity Online Before Buying - Amateur Asset Allocator Sat, 07 Nov 2009 03:44:13 +0000 http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/#comment-6018 [...] returns (equity-indexed annuities) and tax-deferred investment annuities (see How To Use Variable Annuities The Right Way).  There is also no shortage of people eager to hand over their money for what usually amounts to [...] [...] returns (equity-indexed annuities) and tax-deferred investment annuities (see How To Use Variable Annuities The Right Way).  There is also no shortage of people eager to hand over their money for what usually amounts to [...]

]]> By: Bob http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/comment-page-1/#comment-5421 Bob Mon, 21 Sep 2009 15:41:20 +0000 http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/#comment-5421 What about converting part of your IRA into a pension by shifting some into a VA? The are products now that give you a guaranteed 7% crediting rate on the highest daily value (vs quarterly or anniversary) your account ever reaches and predicates your future income payments based on that value. So while higher fees do eat into the actual account value a bit, the protection offered by locking in a guaranteed revenue stream at the investment height, helps to ensure that I am essentially monetizing the investmenst at the right time. Should have gotten in before the market went to 14,000, would love to have my annuity payments based on that level! What about converting part of your IRA into a pension by shifting some into a VA? The are products now that give you a guaranteed 7% crediting rate on the highest daily value (vs quarterly or anniversary) your account ever reaches and predicates your future income payments based on that value. So while higher fees do eat into the actual account value a bit, the protection offered by locking in a guaranteed revenue stream at the investment height, helps to ensure that I am essentially monetizing the investmenst at the right time. Should have gotten in before the market went to 14,000, would love to have my annuity payments based on that level!

]]> By: The Weeks Most Popular Stores at VIN Value Plays http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/comment-page-1/#comment-5274 The Weeks Most Popular Stores at VIN Value Plays Tue, 08 Sep 2009 04:11:29 +0000 http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/#comment-5274 [...] 17. How to Use Variable Annuities the Right Way [...] [...] 17. How to Use Variable Annuities the Right Way [...]

]]> By: Mark http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/comment-page-1/#comment-4493 Mark Fri, 31 Jul 2009 07:37:24 +0000 http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/#comment-4493 Jeff- Thanks for these posts as quite helpful in understanding a complex product. Can you expand on your statement that "there is no reason anybody over the age of 60 should be buying a variable annuity at all"? I ask as my parents are quite sold on the idea of a variable annuity along with a living benefit rider that will guarantee them a certain minimum return/payout. I am researching this "idea" but having trouble specifying the why not to do it. They primary objective is wealth preservation and not outliving their money after having lost a chunk in the past year by being overexposed to equities. All the best, Mark Jeff-
Thanks for these posts as quite helpful in understanding a complex product. Can you expand on your statement that “there is no reason anybody over the age of 60 should be buying a variable annuity at all”? I ask as my parents are quite sold on the idea of a variable annuity along with a living benefit rider that will guarantee them a certain minimum return/payout. I am researching this “idea” but having trouble specifying the why not to do it. They primary objective is wealth preservation and not outliving their money after having lost a chunk in the past year by being overexposed to equities. All the best, Mark

]]> By: Lifetime Annuities Are Worth A Look If Longevity Is In Your Genes - Amateur Asset Allocator http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/comment-page-1/#comment-4338 Lifetime Annuities Are Worth A Look If Longevity Is In Your Genes - Amateur Asset Allocator Mon, 06 Jul 2009 11:04:15 +0000 http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/#comment-4338 [...] no secret I am often critical of most types of annuity products, especially variable annuities, but there is one kind of annuity I can heartily recommend for many investors:  the lifetime [...] [...] no secret I am often critical of most types of annuity products, especially variable annuities, but there is one kind of annuity I can heartily recommend for many investors:  the lifetime [...]

]]> By: Pros And Cons Of Variable Annuities - Amateur Asset Allocator http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/comment-page-1/#comment-4003 Pros And Cons Of Variable Annuities - Amateur Asset Allocator Fri, 08 May 2009 15:19:38 +0000 http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/#comment-4003 [...] How To Use Variable Annuities The Right Way [...] [...] How To Use Variable Annuities The Right Way [...]

]]> By: Kyle http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/comment-page-1/#comment-3764 Kyle Tue, 17 Mar 2009 02:53:59 +0000 http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/#comment-3764 Steve, the "floor" may be 3-5% (although I don't believe you could actually find such an annuity) but the upside is certainly not unlimited. The additional costs involved are very rarely, if ever, worth it. To answer your question yes, I've run the numbers. In my opinion, the GMWB is not a good option for the vast majority of investors. You can get higher income with less risk from other sources. Steve, the “floor” may be 3-5% (although I don’t believe you could actually find such an annuity) but the upside is certainly not unlimited. The additional costs involved are very rarely, if ever, worth it. To answer your question yes, I’ve run the numbers. In my opinion, the GMWB is not a good option for the vast majority of investors. You can get higher income with less risk from other sources.

]]> By: Steve http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/comment-page-1/#comment-3763 Steve Tue, 17 Mar 2009 02:34:52 +0000 http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/#comment-3763 How could you possibly write an article about the pros of variable annuities and not mention a living benefit rider, such as a GMIB or GMWB? It seems clear to me you have never actually looked at the product. A variable annuity without a living benefit is completely useless, I will agree. But the income protection provided by a GMWB rider is absolutely invaluable. Have you sat down with a spreadsheet and run the numbers? A properly designed variable annuity with a living benefit rider provides a minimum floor of 3-5%, and unlimited upside potential. How could you possibly write an article about the pros of variable annuities and not mention a living benefit rider, such as a GMIB or GMWB? It seems clear to me you have never actually looked at the product. A variable annuity without a living benefit is completely useless, I will agree. But the income protection provided by a GMWB rider is absolutely invaluable. Have you sat down with a spreadsheet and run the numbers? A properly designed variable annuity with a living benefit rider provides a minimum floor of 3-5%, and unlimited upside potential.

]]> By: Jeff Rose http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/comment-page-1/#comment-2150 Jeff Rose Sun, 02 Nov 2008 05:21:55 +0000 http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/#comment-2150 Many of the annuity products nowadays offer what's called and "income benefit" or "income rider" that will pay a certain amount to the beneficiary and the spouse over each of their lifetimes. Any remainder will be passed to the beneficiaries. While they could possibly get the same result in a diversified mutual fund portfolio, the simple guarantee goes a long way with some individuals. Many of the annuity products nowadays offer what’s called and “income benefit” or “income rider” that will pay a certain amount to the beneficiary and the spouse over each of their lifetimes. Any remainder will be passed to the beneficiaries. While they could possibly get the same result in a diversified mutual fund portfolio, the simple guarantee goes a long way with some individuals.

]]> By: Bob http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/comment-page-1/#comment-1595 Bob Mon, 11 Aug 2008 14:27:04 +0000 http://amateurassetallocator.com/2008/02/27/how-to-use-variable-annuities-the-right-way/#comment-1595 You failed to mention the asset protection many states afford insurance/annuity products. If the investor faces possible creditor actions (physicians or other professionals who fear malpractice suits, real estate developers, etc.) investments made within an annuity may make a lot of sense. Many states, such as Florida and Texas, do not allow creditors to attach assets held within insurance policies or annuity contracts (or retirement accounts for that matter). Granted, it's not a universal reason most people should invest in an annuity, but it can be an important reason for a select few. You failed to mention the asset protection many states afford insurance/annuity products. If the investor faces possible creditor actions (physicians or other professionals who fear malpractice suits, real estate developers, etc.) investments made within an annuity may make a lot of sense. Many states, such as Florida and Texas, do not allow creditors to attach assets held within insurance policies or annuity contracts (or retirement accounts for that matter).

Granted, it’s not a universal reason most people should invest in an annuity, but it can be an important reason for a select few.

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