Which SPIA ?

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Rajsx
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Which SPIA ?

Post by Rajsx »

I am researching SPIA for myself, and I am curious which Ins/Annuity Company other Forum Members went with & why ?

Any & all input would be appreciated.


Best Regards
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Mel Lindauer
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Re: Which SPIA ?

Post by Mel Lindauer »

Rajsx wrote:I am researching SPIA for myself, and I am curious which Ins/Annuity Company other Forum Members went with & why ?

Any & all input would be appreciated.


Best Regards
As long as you stick to highly-rated insurance providers, SPIAs are basically a commodity product, so you can choose the one that offers the best payout for your situation.
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RetiredinKaty
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Re: Which SPIA ?

Post by RetiredinKaty »

You can search for "Stan the Annuity Man Comdex Ranking". He is one of the "Retirementors" on MarketWatch. On his web site he provides a free listing of current Comdex rankings. The Comdex rank is a composite of the various agency rankings. I gather from web searching that a score of 90 or higher is considered great, while some broker / agents recommend a minimum of 75 to 80.
pkcrafter
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Re: Which SPIA ?

Post by pkcrafter »

Stan gives quality rankings, but no word on costs.

Here's an article on SPIA costs from Retire Early I haven't seen before, although it's possible it was posted several years ago.

http://www.retireearlyhomepage.com/annuity_costs.html

Paul
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itstoomuch
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Re: Which SPIA ?

Post by itstoomuch »

Do you know how Whole Life Insurance works?
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo
Alan S.
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Re: Which SPIA ?

Post by Alan S. »

Once you determine the financial strength of the proposed insurance company, check your state insurance guarantee association limits and it's own financial reserves. Like a bond, if the contract proceeds are covered by your state association, you can afford to move down the credit scale of the insurer somewhat. Or you might look for strength in both entities if the annuity is expected to pay out over many years.

https://www.nolhga.com/policyholderinfo/main.cfm
adamthesmythe
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Re: Which SPIA ?

Post by adamthesmythe »

> Do you know how Whole Life Insurance works?

Probably the OP DOES know, and this is why he is asking about SPIAs.
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nisiprius
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Re: Which SPIA ?

Post by nisiprius »

For researching available companies, options, and prices, I would definitely use two sources. You need to have an account at Vanguard to use the first. Having logged onto Vanguard, from within that account you can create a no-cost account at Income Solutions, their annuity partner. Having done that, you can then enter your personal information and get actual quotations from typically five or six actual insurance companies. My experience has been that if you do not check the box that says you want them to contact you, they will not contact you.

The second source is http://www.immediateannuities.com . I tried them about five years ago. I didn't actually buy from them, but I believe Taylor Larimore has. At that time, they sent me an extremely useful package of information and quotations. They did contact me by email but were not the slightest bit pushy. At that time they did not offer any inflation-adjusted SPIAs.
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Topic Author
Rajsx
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Re: Which SPIA ?

Post by Rajsx »

Thanks everybody for your helpful input so far.

I have got quotes from Income Solutions via Vanguard, but they sent me only one company's quote.

I have gone thru the Stan the Annuity Man website & the Comdex Report , and will try Immediate annuities & read the helpful article about the Annuity costs at the retire early web site.

I will continue to learn about this investment, or (a lifestyle choice as Stan calls it, not an investment)

I appreciate any further info, thanks a lot


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itstoomuch
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Re: Which SPIA ?

Post by itstoomuch »

SPIA Annuities is NOT an investment. You are buying an INSURANCE product.
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo
adamthesmythe
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Re: Which SPIA ?

Post by adamthesmythe »

> SPIA Annuities is NOT an investment. You are buying an INSURANCE product.

Yup. The tipoff is that they are sold by insurance companies.
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Rajsx
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Re: Which SPIA ?

Post by Rajsx »

Thanks Alan, that web site was very helpful, I understand in Florida up to $250k is covered by the guarantee organization per policy/annuity insurance company.

I understand I may have multiple annuity policies from different insurers, but each not to exceed 250k. if I want to play safe as far as the financial risk of a company is considered.

Do I have it right ??

Thanks
dhodson
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Re: Which SPIA ?

Post by dhodson »

Genworth had a high comdex until recently. The ratings don't predict distant future that well.

Keep in mind the association tries to tax other companies still in operation or transfer the policy to a solvent company up to the limits to make you whole. They do not use state or fed money to back the policy.
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Rajsx
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Re: Which SPIA ?

Post by Rajsx »

I am facing two questions in my preparation to buy an annuity -

1) Do I or my wife buys the annuity for a possible better payout. No one has seen the future but sort of hedging my bets.

I am 58, have multiple illnesses including Diabetes & Hypertension.
DW is 54 and is in relatively good health.
We both individually have the required 250k in IRA & as well as taxable accounts.

I read that people who are in not so good health are grouped along with people in good health,( predictably collecting the money for a longer time), when the Annuity/Insurance companies calculate their payments, foreseeing their company benefits.
Thus people who predictably have a shorter life span due to their health issues get the shorter end of the bargain in an annuity.

2) How does the source of the lump Sum premium play out ? i.e...Using a Taxable vs IRA account to fund the SPIA.
Which option is better & why ?

I appreciate your knowledge/information in helping me tread the annuity waters.

Thanks & best regards
Gill
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Re: Which SPIA ?

Post by Gill »

Rajsx wrote:I read that people who are in not so good health are grouped along with people in good health,( predictably collecting the money for a longer time), when the Annuity/Insurance companies calculate their payments, foreseeing their company benefits.
Thus people who predictably have a shorter life span due to their health issues get the shorter end of the bargain in an annuity.
This is not entirely true. If you advise the company you have certain medical conditions you may receive a rated policy with a higher payout, i.e., lower premium.
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal
dhodson
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Re: Which SPIA ?

Post by dhodson »

Gill wrote:
Rajsx wrote:I read that people who are in not so good health are grouped along with people in good health,( predictably collecting the money for a longer time), when the Annuity/Insurance companies calculate their payments, foreseeing their company benefits.
Thus people who predictably have a shorter life span due to their health issues get the shorter end of the bargain in an annuity.
This is not entirely true. If you advise the company you have certain medical conditions you may receive a rated policy with a higher payout, i.e., lower premium.
But not necessarily for the ones that person listed.
itstoomuch
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Re: Which SPIA ?

Post by itstoomuch »

Rajsx wrote:I am facing two questions in my preparation to buy an annuity -

1) Do I or my wife buys the annuity for a possible better payout. No one has seen the future but sort of hedging my bets.

I am 58, have multiple illnesses including Diabetes & Hypertension.
DW is 54 and is in relatively good health.
We both individually have the required 250k in IRA & as well as taxable accounts.

I read that people who are in not so good health are grouped along with people in good health,( predictably collecting the money for a longer time), when the Annuity/Insurance companies calculate their payments, foreseeing their company benefits.
Thus people who predictably have a shorter life span due to their health issues get the shorter end of the bargain in an annuity.

2) How does the source of the lump Sum premium play out ? i.e...Using a Taxable vs IRA account to fund the SPIA.
Which option is better & why ?

I appreciate your knowledge/information in helping me tread the annuity waters.

Thanks & best regards
The annuities that we looked at did not have Health surveys. Therein lies the the advantage and disadvantage of SPIAs.
If you have health issues, SPIA is not a good choice. You would be could be better off in a GWB plan, which will offer lower income but has a remainder benefit.
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo
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HomerJ
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Re: Which SPIA ?

Post by HomerJ »

itstoomuch wrote:SPIA Annuities is NOT an investment. You are buying an INSURANCE product.
I like to consider them an income stream.... Yeah, it technically is insurance against living for a long time, but a SPIA is very different from most insurance that you buy.

They are very simple... Give an insurance company a single payment, they pay you $x every year for the rest of your life.

I wouldn't consider them an investment or as insurance... It's an income stream for life... like a pension.. I don't consider a pension an investment or insurance either.
dhodson
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Re: Which SPIA ?

Post by dhodson »

HomerJ wrote:
itstoomuch wrote:SPIA Annuities is NOT an investment. You are buying an INSURANCE product.
I like to consider them an income stream.... Yeah, it technically is insurance against living for a long time, but a SPIA is very different from most insurance that you buy.

They are very simple... Give an insurance company a single payment, they pay you $x every year for the rest of your life.

I wouldn't consider them an investment or as insurance... It's an income stream for life... like a pension.. I don't consider a pension an investment or insurance either.
Yes but when you break it down they mostly just give you a return of principle with the insurance that if you happen to live longer that the income stream continues. At this point its just semantics. As is always the case with insurance, it works best if you are only insuring risks you need to insure against.
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HomerJ
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Re: Which SPIA ?

Post by HomerJ »

dhodson wrote:
HomerJ wrote:
itstoomuch wrote:SPIA Annuities is NOT an investment. You are buying an INSURANCE product.
I like to consider them an income stream.... Yeah, it technically is insurance against living for a long time, but a SPIA is very different from most insurance that you buy.

They are very simple... Give an insurance company a single payment, they pay you $x every year for the rest of your life.

I wouldn't consider them an investment or as insurance... It's an income stream for life... like a pension.. I don't consider a pension an investment or insurance either.
Yes but when you break it down they mostly just give you a return of principle with the insurance that if you happen to live longer that the income stream continues. At this point its just semantics. As is always the case with insurance, it works best if you are only insuring risks you need to insure against.
Usually, insurance only pays if the event you are insuring against happens... (i.e. only pays if your house burns down, etc.)

SPIA lets you spend more even if the insurance event (living long) doesn't happen.

You might die at 75 from a heart attack, yet from 65-75, normally you'll probably only be spending 3%-4% to make sure the money lasts 30 years.... SPIA would let you spend more of your money during that time, even if you did die early (thereby losing the "insurance" bet)
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Re: Which SPIA ?

Post by dhodson »

That's over stating it. Wether or not the event will happen isn't completely random. Most people have a period of declining health. They have a decent idea that they might die at 75 or 76 and thus they start drawing more.
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