When do annuities make sense?
When do annuities make sense?
We brought this up to our CFP, so it's not like she's pushing it. My wife likes the idea of guaranteed income, or perhaps the security (which a CD could also offer).
CFP sent us a some proposals. A USAA Certain Time Period had ~5.45% payback.
What type of scenarios to annuities make sense?
CFP sent us a some proposals. A USAA Certain Time Period had ~5.45% payback.
What type of scenarios to annuities make sense?
Re: When do annuities make sense?
Welcome to the forum.
If you are looking for guaranteed income now, you probably want a SPIA (single payment immediate annuity). It's like buying a pension. You give them money, they give you a guaranteed income.
If you are looking for guaranteed income in the future, you probably should not buy an annuity now.
Here is a link to an outstanding video by member Stinky (horse's mouth on this stuff) on the good, bad, and ugly. Much of it is ugly, so you want to be sure you are looking at the right product(s).
viewtopic.php?t=433633

If you are looking for guaranteed income now, you probably want a SPIA (single payment immediate annuity). It's like buying a pension. You give them money, they give you a guaranteed income.
If you are looking for guaranteed income in the future, you probably should not buy an annuity now.
Here is a link to an outstanding video by member Stinky (horse's mouth on this stuff) on the good, bad, and ugly. Much of it is ugly, so you want to be sure you are looking at the right product(s).
viewtopic.php?t=433633
Link to Asking Portfolio Questions
Re: When do annuities make sense?
1. You Need Guaranteed Income
Retirement income: If you're retiring and want a steady stream of income for the rest of your life, an annuity can provide that. With a lifetime income annuity, you receive regular payments that continue as long as you live, which can help alleviate concerns about running out of money in retirement.
2. You Have a Long Life Expectancy
If you expect to live for many years after retirement and want to make sure you don’t run out of money, annuities can help. Since annuities can offer lifetime payouts, they’re often a good choice if longevity is a concern.
3. You Want to Reduce Investment Risk
Annuities can provide a level of financial security, especially if you’re risk-averse. Fixed annuities, for example, can protect you from market volatility since the payout is guaranteed (or indexed to inflation, in some cases).
4. You Don’t Want to Worry About Spending Too Much
If managing withdrawals from retirement accounts (like IRAs or 401(k)s) feels daunting, annuities simplify that by providing consistent payouts, which means you don't need to worry about how much to take out each year to ensure you don’t overspend.
5. You Have a Lump Sum and Want to Convert It into Regular Payments
If you come into a lump sum of money (e.g., a large inheritance or a settlement), an annuity can help you convert that into a predictable income stream.
6. You Want to Leave a Legacy
Some types of annuities allow you to include a beneficiary option, which means your loved ones could continue receiving payments if you pass away before the annuity's payments are fully used up.
When It Might Not Make Sense:
High Fees: Some annuities, especially variable ones, can have high fees that eat into your returns.
Liquidity Needs: Annuities lock up your money for a period of time. If you need easy access to cash, they might not be the best choice.
Inflation Concerns: Fixed annuities don’t adjust for inflation unless you specifically choose an inflation rider, so your income could lose purchasing power over time.
Hope this helps.
Retirement income: If you're retiring and want a steady stream of income for the rest of your life, an annuity can provide that. With a lifetime income annuity, you receive regular payments that continue as long as you live, which can help alleviate concerns about running out of money in retirement.
2. You Have a Long Life Expectancy
If you expect to live for many years after retirement and want to make sure you don’t run out of money, annuities can help. Since annuities can offer lifetime payouts, they’re often a good choice if longevity is a concern.
3. You Want to Reduce Investment Risk
Annuities can provide a level of financial security, especially if you’re risk-averse. Fixed annuities, for example, can protect you from market volatility since the payout is guaranteed (or indexed to inflation, in some cases).
4. You Don’t Want to Worry About Spending Too Much
If managing withdrawals from retirement accounts (like IRAs or 401(k)s) feels daunting, annuities simplify that by providing consistent payouts, which means you don't need to worry about how much to take out each year to ensure you don’t overspend.
5. You Have a Lump Sum and Want to Convert It into Regular Payments
If you come into a lump sum of money (e.g., a large inheritance or a settlement), an annuity can help you convert that into a predictable income stream.
6. You Want to Leave a Legacy
Some types of annuities allow you to include a beneficiary option, which means your loved ones could continue receiving payments if you pass away before the annuity's payments are fully used up.
When It Might Not Make Sense:
High Fees: Some annuities, especially variable ones, can have high fees that eat into your returns.
Liquidity Needs: Annuities lock up your money for a period of time. If you need easy access to cash, they might not be the best choice.
Inflation Concerns: Fixed annuities don’t adjust for inflation unless you specifically choose an inflation rider, so your income could lose purchasing power over time.
Hope this helps.
Re: When do annuities make sense?
What type of annuity?
About the only type I have seen make sense are single premium immediate annuities(SPIA) which is like buying a pension. It can vary but they light tend to make sense more when you are older like 70+ years old.
Often with a SPIA makes since the plan will also be to invest other money and buy a then buy an additional SPIA every five years or so to cover the purchasing power which is lost to inflation.
Even with a SPIA you have a huge amount of inflation risk and an unknown amount of risk that the insurance company which sells it will run into financial problems.
Delaying Social Security to get the optimal payout is in effect buying an inflation adjusted SPIA so you should make any decisions about buying a SPIA along with deciding when to start SS. I cannot think of a situation where it would make sense to buy a commercial SPIA while starting SS early. See this web site to she when it says that you should each start your SS.
https://opensocialsecurity.com/
I do not know what type of annuity that is but for comparison you can buy a 30 year t-bond which pays 4.786% and your estate would get the t-bond when you die.Goofy wrote: Fri Jan 31, 2025 11:09 am CFP sent us a some proposals. A USAA Certain Time Period had ~5.45% payback.
I might be missing something but I do not know why that annuity would be the least bit attractive to you since it only pay about 0.6% more.
Re: When do annuities make sense?
That sounds to me like a MYGA. If you are near retirement age, it could work out. It is similar to a CD but by an insurance company. They typically pay higher than CDs, although US Treasuries are paying good rates now and are state tax free.Goofy wrote: Fri Jan 31, 2025 11:09 am
CFP sent us a some proposals. A USAA Certain Time Period had ~5.45% payback.
The question isn't at what age I want to retire, it's at what income. |
- George Foreman
Re: When do annuities make sense?
Welcome to the Forum!Goofy wrote: Fri Jan 31, 2025 11:09 am We brought this up to our CFP, so it's not like she's pushing it. My wife likes the idea of guaranteed income, or perhaps the security (which a CD could also offer).
CFP sent us a some proposals. A USAA Certain Time Period had ~5.45% payback.
What type of scenarios to annuities make sense?
There are lots of types of annuities. Some, like multi year guaranteed annuities (MYGAs) and single premium immediate annuities (SPIAs), are favored by many Bogleheads. Other types, like indexed annuities and variable annuities, are generally disfavored in the Boglehead community.
From the description of the product you’ve been presented with, it sounds like you’re considering a “period certain” SPIA. That’s one that will make payments for a “certain” period of time, like 5, 10, or 20 years, and then stop. Payments will continue to your beneficiaries if you die before the payment term is up. Your money is “locked up” once you get about a month after you pay the premium.
It is backed by USAA, which is one of the very strongest life insurance companies.
Does that kind of annuity fit your financial needs?
(From what you say, this does not sound like a MYGA)
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: When do annuities make sense?
Interesting; I think that's one that doesn't make sense. A MYGA makes far more sense generally speaking. A SPIA is for someone so freaked out about the ups and downs of the market, they're willing to take what will likely be a weaker overall return in the long run.Watty wrote: Fri Jan 31, 2025 12:46 pm What type of annuity?
About the only type I have seen make sense are single premium immediate annuities(SPIA)
Why on earth would someone take 4.786 over 5.45, even if it's "only" .6 more? Of course we would have to know timeframes here...I do not know what type of annuity that is but for comparison you can buy a 30 year t-bond which pays 4.786% and your estate would get the t-bond when you die.
I might be missing something but I do not know why that annuity would be the least bit attractive to you since it only pay about 0.6% more.
That all said, you're right that the type of annuity must be clarified. And this is something I only recently learned, as I thought of all annuities as SPIA types.
Re: When do annuities make sense?
May I ask what time period? I didn't see anything that high on the site.
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Re: When do annuities make sense?
It can make sense to cover your base expenses with
guaranteed income:
Social Security
pension(s) if you have them
Annuities
Social security is inflation adjusted.
Most annuities are not inflation adjusted.
My wife's small pension is not inflation adjusted either.
I will likely annuitize 4% of my portfolio
sometime between age 70 and 75.
guaranteed income:
Social Security
pension(s) if you have them
Annuities
Social security is inflation adjusted.
Most annuities are not inflation adjusted.
My wife's small pension is not inflation adjusted either.
I will likely annuitize 4% of my portfolio
sometime between age 70 and 75.
Re: When do annuities make sense?
From BH thread: "Why do people buy annuities?" viewtopic.php?p=8056106#p8056106
1st and foremost, annuities are about LAYING OFF the RISK of outliving your money.
When you give your money to the insurance company, you are expecting a lifetime income stream, and the insurance company is taking on the risk to provide that income stream via stocks, bonds, options, or whatever investment vehicles they decide to use.
That's what you are really buying. Some people want (or even need) that. If you don't need to lay off the risk, don't buy an annuity.
Because the insurance industry wants [and NEEDS] to make money, you will ALWAYS pay a premium over the probabilistic cost.
That doesn't mean the insurance is a bad deal. [Almost everybody buys homeowner insurance without thinking twice about it.]
Once you decide you want to lay off the risk, then the search begins for the best company and product to do that. As many people have pointed out, there are lots of bad annuity products and lots of unscrupulous sales people.
Re: When do annuities make sense?
Why bother annuitizing such a small amount?MathWizard wrote: Fri Jan 31, 2025 10:05 pm It can make sense to cover your base expenses with
guaranteed income:
Social Security
pension(s) if you have them
Annuities
Social security is inflation adjusted.
Most annuities are not inflation adjusted.
My wife's small pension is not inflation adjusted either.
I will likely annuitize 4% of my portfolio
sometime between age 70 and 75.
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Re: When do annuities make sense?
Mostly for my wife's benefit.Chardo wrote: Sat Feb 01, 2025 7:45 amWhy bother annuitizing such a small amount?MathWizard wrote: Fri Jan 31, 2025 10:05 pm It can make sense to cover your base expenses with
guaranteed income:
Social Security
pension(s) if you have them
Annuities
Social security is inflation adjusted.
Most annuities are not inflation adjusted.
My wife's small pension is not inflation adjusted either.
I will likely annuitize 4% of my portfolio
sometime between age 70 and 75.
An annuity with 4% of our portfolio plus the other guaranteed income would cover base expenses.
That means that one does not need to dip into the portfolio.
This is separating needs vs wants.
Needs come from guaranteed income, wants come from the
portfolio.
March 2020 to March 2021 gave us a good estimate of base expenses (in 2020 dollars).
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Re: When do annuities make sense?
Guaranteeing a return has both a value and a cost. It is usually true that anything of value has a cost. Some can afford that cost and are willing to pay it, even if they are not "freaked out."gunny wrote: Fri Jan 31, 2025 9:00 pmInteresting; I think that's one that doesn't make sense. A MYGA makes far more sense generally speaking. A SPIA is for someone so freaked out about the ups and downs of the market, they're willing to take what will likely be a weaker overall return in the long run.Watty wrote: Fri Jan 31, 2025 12:46 pm What type of annuity?
About the only type I have seen make sense are single premium immediate annuities(SPIA)
Just like you balance risk and return, you should balance cost and value.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
Re: When do annuities make sense?
Annuities make sense when a person is unable or unwilling to manage their own money.
Re: When do annuities make sense?
Thanks Stinky. Yes, it's a SPIA. As i read below, a poster wrote about an annuity typically being for laying off the risk of outliving your money. That is not our situation.Stinky wrote: Fri Jan 31, 2025 2:33 pmWelcome to the Forum!Goofy wrote: Fri Jan 31, 2025 11:09 am We brought this up to our CFP, so it's not like she's pushing it. My wife likes the idea of guaranteed income, or perhaps the security (which a CD could also offer).
CFP sent us a some proposals. A USAA Certain Time Period had ~5.45% payback.
What type of scenarios to annuities make sense?
There are lots of types of annuities. Some, like multi year guaranteed annuities (MYGAs) and single premium immediate annuities (SPIAs), are favored by many Bogleheads. Other types, like indexed annuities and variable annuities, are generally disfavored in the Boglehead community.
From the description of the product you’ve been presented with, it sounds like you’re considering a “period certain” SPIA. That’s one that will make payments for a “certain” period of time, like 5, 10, or 20 years, and then stop. Payments will continue to your beneficiaries if you die before the payment term is up. Your money is “locked up” once you get about a month after you pay the premium.
It is backed by USAA, which is one of the very strongest life insurance companies.
Does that kind of annuity fit your financial needs?
(From what you say, this does not sound like a MYGA)
Our concern is that SS might deplete before we pass (20-30 years), or they might increase the age, which would prevent us from accessing nearly 1/2 of our monthly income. Please keep in mind though, if the Monte Carlo model says will leave 3x our nestegg to our heirs and SS is part of that model, then I'd assume if SS drops, etc., we'd likely still be ok, just not able to leave a ton of waelth behind.
Re: When do annuities make sense?
So, since it sounds like it’s a “period certain” SPIA, I agree with you that it would not be “laying off the risk of outliving your money”, as you say above.Goofy wrote: Mon Feb 03, 2025 8:31 pm Thanks Stinky. Yes, it's a SPIA. As i read below, a poster wrote about an annuity typically being for laying off the risk of outliving your money. That is not our situation.
Our concern is that SS might deplete before we pass (20-30 years), or they might increase the age, which would prevent us from accessing nearly 1/2 of our monthly income. Please keep in mind though, if the Monte Carlo model says will leave 3x our nestegg to our heirs and SS is part of that model, then I'd assume if SS drops, etc., we'd likely still be ok, just not able to leave a ton of waelth behind.
Rather, it would be to guarantee a stream of monthly payments of a fixed amount, for a fixed number of years. The stream of payments will continue for the defined term, whether you are alive or not.
And, from what you say, your annual rate of return over the product lifetime is 5.45%.
The product is being issued by a highly rated insurance company. I would have no problems or concerns purchasing from USAA.
If that arrangement gives you some comfort, I’d say to go for it.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: When do annuities make sense?
5.45% for a SPIA from a big-time insurance company? Hell that beats a lot of MYGAs I'm seeing. I'm interested myself.Stinky wrote: Mon Feb 03, 2025 9:13 pm And, from what you say, your annual rate of return over the product lifetime is 5.45%.
The product is being issued by a highly rated insurance company. I would have no problems or concerns purchasing from USAA.
Re: When do annuities make sense?
Just a clarification for others reading this thread. This is for a term certain SPIA, which does have an ROI. A life SPIA has no rate of return and you cannot know the ROI until you die. It could be negative (if you die young and do not have a guarantee rider) and it could be amazing (if you live long). You will receive a payout rate that is a combination of interest, principal, and mortality credits, so the payout rate cannot be compared to a MYGA or other fixed income product. A term certain, which is what is discussed here, includes a combination of interest and principal, but because the term is known, it is easy to separate the interest and principal to get the rate of return.gunny wrote: Mon Feb 03, 2025 9:22 pm5.45% for a SPIA from a big-time insurance company? Hell that beats a lot of MYGAs I'm seeing. I'm interested myself.Stinky wrote: Mon Feb 03, 2025 9:13 pm And, from what you say, your annual rate of return over the product lifetime is 5.45%.
The product is being issued by a highly rated insurance company. I would have no problems or concerns purchasing from USAA.
The question isn't at what age I want to retire, it's at what income. |
- George Foreman
Re: When do annuities make sense?
Thanks Harmanic.
I can't seem to attach the JPEG, but, rounding off, the purchase amount is $358,000, 18 years, and the guaranteed income is $540,000. Annual payout rate is 8.37%. I have no idea where I got 5.45% from honestly.
I can't seem to attach the JPEG, but, rounding off, the purchase amount is $358,000, 18 years, and the guaranteed income is $540,000. Annual payout rate is 8.37%. I have no idea where I got 5.45% from honestly.
Re: When do annuities make sense?
With an MYGA, at the end of the term, you get your principal back. With a term-certain SPIA, you don't.
Principal, not principle. Roth, not ROTH. IRMAA, not IRRMA or IRMMA.
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Re: When do annuities make sense?
Think what Harmanic was trying to tell the poster he or she was quoting was that the % is not the rate you can compare on a CD. Part of your 8.37% payout is going to be principal being returned to you.Goofy wrote: Tue Feb 04, 2025 12:03 pm Thanks Harmanic.
I can't seem to attach the JPEG, but, rounding off, the purchase amount is $358,000, 18 years, and the guaranteed income is $540,000. Annual payout rate is 8.37%. I have no idea where I got 5.45% from honestly.
If we know the number of years this is to pay out, then a ROI can be calculated and compared to apples to apples to traditional fixed income products.
Re: When do annuities make sense?
Yep, I get it. This SPIA was an 18 year payout, totaling $540,000, so $182,000 > than the $358,000 purchase amountsimplesimon wrote: Tue Feb 04, 2025 12:13 pmThink what Harmanic was trying to tell the poster he or she was quoting was that the % is not the rate you can compare on a CD. Part of your 8.37% payout is going to be principal being returned to you.Goofy wrote: Tue Feb 04, 2025 12:03 pm Thanks Harmanic.
I can't seem to attach the JPEG, but, rounding off, the purchase amount is $358,000, 18 years, and the guaranteed income is $540,000. Annual payout rate is 8.37%. I have no idea where I got 5.45% from honestly.
If we know the number of years this is to pay out, then a ROI can be calculated and compared to apples to apples to traditional fixed income products.
Re: When do annuities make sense?
Well, technically not, but you do, sorta. So, if I pay $358M and am guaranteed $540M in payments, then I've got my principal back. But I understand what you're saying and how the MYGA works and that the SPIA is not returning my principal in name, but only in function. Thanks to you and folks here, as well as Stinky's video!22twain wrote: Tue Feb 04, 2025 12:07 pm With an MYGA, at the end of the term, you get your principal back. With a term-certain SPIA, you don't.
Re: When do annuities make sense?
While I can’t precisely reproduce your numbers (especially since you didn’t give precise numbers), I can come close.Goofy wrote: Tue Feb 04, 2025 12:03 pm I can't seem to attach the JPEG, but, rounding off, the purchase amount is $358,000, 18 years, and the guaranteed income is $540,000. Annual payout rate is 8.37%. I have no idea where I got 5.45% from honestly.
It looks like you’re getting a monthly payment of about $2500, for 18 years, with payments being made whether you’re alive or not.
Using a mortgage calculator, it looks like the premium required to support that monthly payment, using an interest rate of 5.45%, is about $345,000. Not the $358,000 you quote, but somewhere in the same zip code.
So I think you’re easily getting 5+% on your money for 18 years. Guaranteed.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: When do annuities make sense?
Yeah, I know I ran something similar as well and it must be where I got that figure. retirement is extremely hectic thus far, so I'm stroking keys faster than my brain can track. Folks say, "it's like work!", or "I'd rather be getting paid for this craziness." Nah, but it's still a lot, then pile on the financial moving of funds, etc. Life is work and when you retire, it's just different work and more for YOU.Stinky wrote: Tue Feb 04, 2025 1:03 pmWhile I can’t precisely reproduce your numbers (especially since you didn’t give precise numbers), I can come close.Goofy wrote: Tue Feb 04, 2025 12:03 pm I can't seem to attach the JPEG, but, rounding off, the purchase amount is $358,000, 18 years, and the guaranteed income is $540,000. Annual payout rate is 8.37%. I have no idea where I got 5.45% from honestly.
It looks like you’re getting a monthly payment of about $2500, for 18 years, with payments being made whether you’re alive or not.
Using a mortgage calculator, it looks like the premium required to support that monthly payment, using an interest rate of 5.45%, is about $345,000. Not the $358,000 you quote, but somewhere in the same zip code.
So I think you’re easily getting 5+% on your money for 18 years. Guaranteed.
Re: When do annuities make sense?
Bingo! Thanks for the link. I'd thought about perhaps a lesser purchase amount, say $245M, but this calculator shows I'd have to live at least 30 years to make that equate to even 4.5%. Even a lifetime annuity isn't great, though if viewed as a safety net...maybe.capjak wrote: Wed Feb 05, 2025 11:14 am https://iqcalculators.com/calculator/an ... alculator/
This calculator Rate of Return is 4.74%.
We are now discussing a Single Premium Deferred for my wife, strictly for peace of mind. So, $200M frozen for 3 years, earns 5%, compounded monthly. Sounds like a quasi-CD, and each year she can take 10% and reinvest it, but her $200M is never at risk. I would treat this as the Bond portion of her portfolio and perhaps it's enough to ease here mind. She simply doesn't trust the entire market process.
Yes, she's grown a decent nest egg in it, but that's not enough to convince her, at lest I don't think. Honestly, I'd take all my money out now and just spend until I run out, but I regain my senses and realize that managing these funds is just part of life. My hope is that now work isn't in the way, I get more enjoyment from it.
Last edited by Goofy on Wed Feb 05, 2025 11:46 am, edited 1 time in total.
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Re: When do annuities make sense?
Also:Goofy wrote: Fri Jan 31, 2025 11:09 am We brought this up to our CFP, so it's not like she's pushing it. My wife likes the idea of guaranteed income, or perhaps the security (which a CD could also offer).
CFP sent us a some proposals. A USAA Certain Time Period had ~5.45% payback.
What type of scenarios to annuities make sense?
How Financial Advisors Make Money
http://www.pamkrueger.com/how-does-my- ... ake-money/
The 19 Questions to Ask Your Financial Adviser
https://jasonzweig.com/the-19-questio ... l-adviser/
1 the "need" for the comfort zone of a monthly "paycheck" that is known and reliable as if one were still working.What type of scenarios to annuities make sense?
2 the "comfort zone" of feeling like one's principle money is not going to be lost on other investment types.
A) Realize that when 5% or whatever percent return is quoted, that much of that, especially in the early phase (much like a mortage pays down the principle last), ...is a return of "your own money". So, it's not a 5% or whatever return. It's actually a few percent at best, the rest if giving back your money to you every month in tiny portions after you've handed over your "large lump sum of cash" to buy this "insurance product".
As for SPIA's mentioned.
Look here: Immediate Annuities.com for some numbers to play with and get an idea of things.
https://www.immediateannuities.com/annu ... rs/?sce=hc
B) Does your CFA charge fees or so forth?
Consider doing a portfolio review by forum senior reviewers in this format to get an idea where an SPIA might fit your needs and long term strategy. It's a comprehensive decision to make and neither simple nor....
Portfolio Review Request
https://www.bogleheads.org/forum/viewt ... =1&t=6212
Generalized questions generally have no specific one size fits all answers.
j
Re: When do annuities make sense?
Thanks. I'll look through this. I've been pumping the breaks a bit and my CFP gets it. I went from model review in September, to retiring a week later and final day in December, so I wasn't mentally prepared. Still, I have zero regrets, as this was the best move for me.Sandtrap wrote: Wed Feb 05, 2025 11:45 amAlso:Goofy wrote: Fri Jan 31, 2025 11:09 am We brought this up to our CFP, so it's not like she's pushing it. My wife likes the idea of guaranteed income, or perhaps the security (which a CD could also offer).
CFP sent us a some proposals. A USAA Certain Time Period had ~5.45% payback.
What type of scenarios to annuities make sense?
How Financial Advisors Make Money
http://www.pamkrueger.com/how-does-my- ... ake-money/
The 19 Questions to Ask Your Financial Adviser
https://jasonzweig.com/the-19-questio ... l-adviser/
1 the "need" for the comfort zone of a monthly "paycheck" that is known and reliable as if one were still working.What type of scenarios to annuities make sense?
2 the "comfort zone" of feeling like one's principle money is not going to be lost on other investment types.
A) Realize that when 5% or whatever percent return is quoted, that much of that, especially in the early phase (much like a mortage pays down the principle last), ...is a return of "your own money". So, it's not a 5% or whatever return. It's actually a few percent at best, the rest if giving back your money to you every month in tiny portions after you've handed over your "large lump sum of cash" to buy this "insurance product".
As for SPIA's mentioned.
Look here: Immediate Annuities.com for some numbers to play with and get an idea of things.
https://www.immediateannuities.com/annu ... rs/?sce=hc
B) Does your CFA charge fees or so forth?
Consider doing a portfolio review by forum senior reviewers in this format to get an idea where an SPIA might fit your needs and long term strategy. It's a comprehensive decision to make and neither simple nor....
Portfolio Review Request
https://www.bogleheads.org/forum/viewt ... =1&t=6212
Generalized questions generally have no specific one size fits all answers.
j
My CFP is with Fidelity, so services are free. Obviously they benefited greatly, when I moved my funds from another financial group. Her commission for any annuity she sells is a flat $100.
I do not have a CFA. Who do I trust or how do I find that person. My wife's money was with Fidelity, and her good friend recommended this CFP, but only worked with her for a week or so before doing so. I have a pretty good sense when folks aren't up to the task and thus far I do like her. Perhaps more importantly, so does my wife. I need to look for a CFA, but a portfolio review here makes sense as well. Thanks for point that out.
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Re: When do annuities make sense?
1Goofy wrote: Wed Feb 05, 2025 11:52 amThanks. I'll look through this. I've been pumping the breaks a bit and my CFP gets it. I went from model review in September, to retiring a week later and final day in December, so I wasn't mentally prepared. Still, I have zero regrets, as this was the best move for me.Sandtrap wrote: Wed Feb 05, 2025 11:45 am
Also:
How Financial Advisors Make Money
http://www.pamkrueger.com/how-does-my- ... ake-money/
The 19 Questions to Ask Your Financial Adviser
https://jasonzweig.com/the-19-questio ... l-adviser/
1 the "need" for the comfort zone of a monthly "paycheck" that is known and reliable as if one were still working.
2 the "comfort zone" of feeling like one's principle money is not going to be lost on other investment types.
A) Realize that when 5% or whatever percent return is quoted, that much of that, especially in the early phase (much like a mortage pays down the principle last), ...is a return of "your own money". So, it's not a 5% or whatever return. It's actually a few percent at best, the rest if giving back your money to you every month in tiny portions after you've handed over your "large lump sum of cash" to buy this "insurance product".
As for SPIA's mentioned.
Look here: Immediate Annuities.com for some numbers to play with and get an idea of things.
https://www.immediateannuities.com/annu ... rs/?sce=hc
B) Does your CFA charge fees or so forth?
Consider doing a portfolio review by forum senior reviewers in this format to get an idea where an SPIA might fit your needs and long term strategy. It's a comprehensive decision to make and neither simple nor....
Portfolio Review Request
https://www.bogleheads.org/forum/viewt ... =1&t=6212
Generalized questions generally have no specific one size fits all answers.
j
My CFP is with Fidelity, so services are free. Obviously they benefited greatly, when I moved my funds from another financial group. Her commission for any annuity she sells is a flat $100.
I do not have a CFA. Who do I trust or how do I find that person. My wife's money was with Fidelity, and her good friend recommended this CFP, but only worked with her for a week or so before doing so. I have a pretty good sense when folks aren't up to the task and thus far I do like her. Perhaps more importantly, so does my wife. I need to look for a CFA, but a portfolio review here makes sense as well. Thanks for point that out.
Have you contacted Vanguard VPAS for input. No fee. Real people.
https://investor.vanguard.com/advice/pe ... al-advisor
2
Once doing a portfolio review here, you can compare the results and inputs with other paths you might take and so forth.
3
Study the entire forum "wiki" from "getting started" and on. Once doing so, you will know more than most FA professionals.
j
Re: When do annuities make sense?
Can you tell us how you get free CFP services at Fidelity?Goofy wrote: Wed Feb 05, 2025 11:52 amThanks. I'll look through this. I've been pumping the breaks a bit and my CFP gets it. I went from model review in September, to retiring a week later and final day in December, so I wasn't mentally prepared. Still, I have zero regrets, as this was the best move for me.Sandtrap wrote: Wed Feb 05, 2025 11:45 am
Also:
How Financial Advisors Make Money
http://www.pamkrueger.com/how-does-my- ... ake-money/
The 19 Questions to Ask Your Financial Adviser
https://jasonzweig.com/the-19-questio ... l-adviser/
1 the "need" for the comfort zone of a monthly "paycheck" that is known and reliable as if one were still working.
2 the "comfort zone" of feeling like one's principle money is not going to be lost on other investment types.
A) Realize that when 5% or whatever percent return is quoted, that much of that, especially in the early phase (much like a mortage pays down the principle last), ...is a return of "your own money". So, it's not a 5% or whatever return. It's actually a few percent at best, the rest if giving back your money to you every month in tiny portions after you've handed over your "large lump sum of cash" to buy this "insurance product".
As for SPIA's mentioned.
Look here: Immediate Annuities.com for some numbers to play with and get an idea of things.
https://www.immediateannuities.com/annu ... rs/?sce=hc
B) Does your CFA charge fees or so forth?
Consider doing a portfolio review by forum senior reviewers in this format to get an idea where an SPIA might fit your needs and long term strategy. It's a comprehensive decision to make and neither simple nor....
Portfolio Review Request
https://www.bogleheads.org/forum/viewt ... =1&t=6212
Generalized questions generally have no specific one size fits all answers.
j
My CFP is with Fidelity, so services are free. Obviously they benefited greatly, when I moved my funds from another financial group. Her commission for any annuity she sells is a flat $100.
I do not have a CFA. Who do I trust or how do I find that person. My wife's money was with Fidelity, and her good friend recommended this CFP, but only worked with her for a week or so before doing so. I have a pretty good sense when folks aren't up to the task and thus far I do like her. Perhaps more importantly, so does my wife. I need to look for a CFA, but a portfolio review here makes sense as well. Thanks for point that out.
Get most of it right and don't make any big mistakes. All else being equal, simpler is better. Simple is as simple does.
Re: When do annuities make sense?
CFA's rarely work with individuals. They are the analysts working for the fund companies, investment banks, etc.Goofy wrote: Wed Feb 05, 2025 11:52 amThanks. I'll look through this. I've been pumping the breaks a bit and my CFP gets it. I went from model review in September, to retiring a week later and final day in December, so I wasn't mentally prepared. Still, I have zero regrets, as this was the best move for me.Sandtrap wrote: Wed Feb 05, 2025 11:45 am
Also:
How Financial Advisors Make Money
http://www.pamkrueger.com/how-does-my- ... ake-money/
The 19 Questions to Ask Your Financial Adviser
https://jasonzweig.com/the-19-questio ... l-adviser/
1 the "need" for the comfort zone of a monthly "paycheck" that is known and reliable as if one were still working.
2 the "comfort zone" of feeling like one's principle money is not going to be lost on other investment types.
A) Realize that when 5% or whatever percent return is quoted, that much of that, especially in the early phase (much like a mortage pays down the principle last), ...is a return of "your own money". So, it's not a 5% or whatever return. It's actually a few percent at best, the rest if giving back your money to you every month in tiny portions after you've handed over your "large lump sum of cash" to buy this "insurance product".
As for SPIA's mentioned.
Look here: Immediate Annuities.com for some numbers to play with and get an idea of things.
https://www.immediateannuities.com/annu ... rs/?sce=hc
B) Does your CFA charge fees or so forth?
Consider doing a portfolio review by forum senior reviewers in this format to get an idea where an SPIA might fit your needs and long term strategy. It's a comprehensive decision to make and neither simple nor....
Portfolio Review Request
https://www.bogleheads.org/forum/viewt ... =1&t=6212
Generalized questions generally have no specific one size fits all answers.
j
My CFP is with Fidelity, so services are free. Obviously they benefited greatly, when I moved my funds from another financial group. Her commission for any annuity she sells is a flat $100.
I do not have a CFA. Who do I trust or how do I find that person. My wife's money was with Fidelity, and her good friend recommended this CFP, but only worked with her for a week or so before doing so. I have a pretty good sense when folks aren't up to the task and thus far I do like her. Perhaps more importantly, so does my wife. I need to look for a CFA, but a portfolio review here makes sense as well. Thanks for point that out.