lawman3966 wrote:The tone of the top post and of several responders is such as to suggest that recommending the purchase of immediate annuities is for some reason worthy of ridicule. I'm not sure I see why.
Don't get me wrong. As much as anyone else, I love heaping scorn on bad, self-serving financial advice from salesmen with interests adverse to their customers. However, SPIAs have been recommended by many quite reputable finance writers, including Jim Otar and Zvi Bodie. Selecting annuities over stocks for provide a secure minimum income makes a lot of sense to me. No doubt, one should thoroughly investigate the coverage limits in the state the annuity is covered in, and the health of the guaranty fund that backs up those coverage limits. Moreover, I would hope that there are ways to spread out the risk of annuities among different companies, and perhaps among separate jurisdictions.
If I'm missing something, an SPIAs are only for fools who'd unthinkingly buy bad financial products from sneaky salesmen, could someone please fill me in as to why this is true, and how Messrs. Otar and Bodie missed out on this knowledge?
Just the usual thoughtless snarkiness, IMO. In fact, the RIAA is not just a bunch of salesman. Here is a partial list of the academic presenters and advisors to the association, which includes Zvi Bodie, Larry Kotlikoff, Moshe Milevsky, and Wade Pfau who are familiar to participants on this forum.
Julie Agnew, William and Mary School of Business
David Babbel, Wharton School
Somnath Basu, California Lutheran
Shlomo Benartzi, UCLA
Zvi Bodie, Boston University
Jeff Brown, University of Illinois
Gary V. Engelhardt, Syracuse University
Michael Finke, Texas Tech University
Larry Kotlikoff, Boston University
David Laibson, Harvard University
Annamaria Lusardi, Dartmouth College
Moshe Arye Milevsky, Ph.D.,York University
Olivia Mitchell, Wharton School, University of Pennsylvania
Wade Pfau, GRIPS
Doug Short, (retired) North Carolina State University
Meir Statman, Santa Clara University
Pirooz Vakili, Boston University
Jack VanDerhei, Temple University and EBRI Fellow
Stephen Zeldes, Columbia University
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