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Old 12-05-2009, 01:28 PM
 
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Default Prudential Advanced Series Variable Annuities?

I have some questions about this annuity. For 100K it's guaranteed 6% return per year. I am 61, if I invest the 100K on my 62nd. birthday I can start drawing payments of $9,100 on my 67 birthday. The payments increase every year until I am 91, @ $28,547. It has large death benefits that go up from 161K to 475K @82 and then drop down each year after that. It has survivorship 100 percent and I also can put it in a trust fund later on if I want. The surender value goes up every year until 82 also and then declines. The annuity pays util both my wife and I die.

I also think I can transfer the 100k from another tax deferred account, into this one.

I would really appreciate any input you have, not sure if this is a good investment or not.
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Old 12-05-2009, 02:37 PM
 
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Very hard to find expert advice on annuities that is not coming from an salesperson / insider. I suspect that annuities are probably most appropriate for someone like the OP, assuming they have maxed up out other options for investment / retirement income and have a desire / need for the life insurance components.
Very tough to say if it ever makes sense to move tax deferred investments of one type into an annuity, as you can't "double stack" and once the tax is saved there are no further benefits...

Try to compare the basic terms of the annuity, without the "extra features" to a basic annuity from Vanguard or Fidelity and read up on the rankings at Consumer Reports WELL BEFORE you sign anything...
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Old 12-05-2009, 03:45 PM
 
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The biggest concern with annuities is the surrender charge-which is only an issue if you plan on surrendering too soon, obviously. Since there is a surrender charge on this until you are 82--that is 20 YEARS, I would walk away FAST. That is outrageous for a surrender period. Also, are you SURE you can take distributions in as little as 5 years with a 20 year surrender charge? If your numbers are correct it looks like you can take about 10% so maybe that is ok. Still, a 20 year surrender charge at a fixed rate scares me.

I looked on the Prudential site and didn't find the Advanced Series-is it the same as the X series?

An annuity in itself is not a bad idea for some "safe" money, but, boy a 20 year surrender charge is hefty. If it is the same as the X series it is a hefty charge.
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Old 12-06-2009, 03:50 AM
 
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Thanks for your replys. This is the Prudential advanced series asap lll. Actually I can withdraw my money at age 67. The account value, surrender value, and death benefit increases dramatically until age 83 and then starts to decline. In some rare occurance if my spouse or I live over 90 years or more we continue to receive annual income for life. It seems like a good investment, but I am sure there are things I do not see. It also says you can lose money and the annual return is hypothetical. I sure would like the income for life, considering the low rates on cd's. But I can't afford to lose my initial investment.

ME
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Old 12-06-2009, 04:45 AM
 
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Quote:
Originally Posted by lynxville View Post
Thanks for your replys. This is the Prudential advanced series asap lll. Actually I can withdraw my money at age 67. The account value, surrender value, and death benefit increases dramatically until age 83 and then starts to decline. In some rare occurance if my spouse or I live over 90 years or more we continue to receive annual income for life. It seems like a good investment, but I am sure there are things I do not see. It also says you can lose money and the annual return is hypothetical. I sure would like the income for life, considering the low rates on cd's. But I can't afford to lose my initial investment.

ME
Any annuity is going to give you a lifetime income if you chose that option. The return is hypothetical so your return could be 1% too. Living to 90 these days is not all that unusual which is what make annuities so attractive. I agree that an annuity is going to be better then a CD-especially at the dismal rates being paid today. I would just do some shopping on the annuities and especially research the company offering the annuity. You will be MUCH better off if you chose a company that is not a stock based company and go with a company that is mutually held (owned by the people that have their policies). They tend to be more financially stable than companies that are stockholder owned. The 3 best mutual companies would be Northwestern Mutual, Massachusetts Mutual and New York Life. Check into their annuities.
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Old 12-07-2009, 09:29 AM
 
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Default There is simply no basis for the last bit...

Quote:
Originally Posted by golfgal View Post
Any annuity is going to give you a lifetime income if you chose that option. The return is hypothetical so your return could be 1% too. Living to 90 these days is not all that unusual which is what make annuities so attractive. I agree that an annuity is going to be better then a CD-especially at the dismal rates being paid today. I would just do some shopping on the annuities and especially research the company offering the annuity. You will be MUCH better off if you chose a company that is not a stock based company and go with a company that is mutually held (owned by the people that have their policies). They tend to be more financially stable than companies that are stockholder owned. The 3 best mutual companies would be Northwestern Mutual, Massachusetts Mutual and New York Life. Check into their annuities.
The organization of how the insurer is structured was / is driven by the corporate philosophy of how the executives choose to raise capital. Studies have shown no consistent correlation between structure and safety, stability, or value.

Lots of myths surround insurance and the levels of compensation that salespeople derive from those myths is hard to counter...
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Old 12-07-2009, 04:00 PM
 
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Quote:
Originally Posted by chet everett View Post
The organization of how the insurer is structured was / is driven by the corporate philosophy of how the executives choose to raise capital. Studies have shown no consistent correlation between structure and safety, stability, or value.

Lots of myths surround insurance and the levels of compensation that salespeople derive from those myths is hard to counter...
You go on believing that but the past year should be obvious you are wrong with so many insurance companies being downgraded in their financial strength, going bankrupt, etc. Look at the expense ratios between a mutually held company and a stock-held company and that alone will tell you where the money goes. Then look at where the profits from the company goes-to stockholders or policy owners--where would you like your money to go??

Look at what they are investing in-or heck, look at their balance sheets--you don't see many mutually held companies leveraging their insurance business.
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Old 12-07-2009, 05:32 PM
 
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The carnage in the insurance business was caused by hysteria over the reckless behavior of some small parts of some firms like AIG and a gross misunderstanding of the exposure of all firms to MBS. The mass panic effected all the insurers, healthy or not, mutually held or stock holder owned.

I suspect anyone that disagrees with that has "sales brochures" printed up by an interested party... http://www.ruf.rice.edu/~elgamal/files/takaful.pdf
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Old 12-08-2009, 05:27 AM
 
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Quote:
Originally Posted by chet everett View Post
The carnage in the insurance business was caused by hysteria over the reckless behavior of some small parts of some firms like AIG and a gross misunderstanding of the exposure of all firms to MBS. The mass panic effected all the insurers, healthy or not, mutually held or stock holder owned.

I suspect anyone that disagrees with that has "sales brochures" printed up by an interested party... http://www.ruf.rice.edu/~elgamal/files/takaful.pdf
Apples to turnips buddy. We are not talking about property and casualty insurance companies here, we are talking about life/annuity/financial planning companies-VERY different. The property and casualty world is totally driven by price and stability of the company means very little to most people where as if you are putting your retirement dollars with a company you better believe people want stability, low expenses, etc. which points to mutually held companies. In this industry it is next to impossible to follow the chain of sell-offs, acquisitions, buy-outs and other morphings of the stock held companies around the country. Think IDS morphing into whatever they are today for one example.
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Old 12-03-2011, 10:52 AM
 
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I need some advice regarding Prudential Premier Retirement Variable Annuity B Series. The planner told me if I put my lump sum pension in this account the princiipal would be guaranteed and I would receive a 5% return on investment. When the stock market spikes, my original principal would also increase and my return would be on the 5% of the increased principal amount. If the stock market goes down, my principal would still be the same. As long as the stock market has some good days, the principal would increase. The rates are 3%. I am 62 years old and I would be able to take my money at age 72 if needed. Do you think this is a good investment. I have the option of either taking a monthly annuity from my employer of $45,000 for life or a lump sum,
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