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becareful of alot of those 7% annuities. most i looked at say in little letters in the fine print its based on age and the 7% applied if you were 80 and is not inclusive of fees and expenses.. when all is said and done if you see 2-3% your lucky. read them very carefully
Thanks for the advice -- I researched the two I've got pretty carefully (John Hancock - Ventures III; and Pacific Life Inovations Select) and believe I'm okay, but I'm no expert in the annuities arena.
i dont know where your seeing 6-7%.i just looked at the john hancock one you listed and you can convert it to income for life at 4.00% at 65 but they keep your investment except for a death benefit which is based on how much they paid out to you already. .as best as i could tell thats as good as it gets ... the prospectus was 92 pages long and i couldnt figure out most of it. im not even sure some expenses dont get pulled from that 4%...
Last edited by mathjak107; 11-17-2010 at 02:45 AM..
Their 10-year plan guarantees to (at minimum) double the initial investment (for lifetime income purposes at 5%) (eg; invest 100, compounted at about 7% per year, becomes $200K (plus any investment growth) - pays a minimum lifetime income of 5% (10K) per year -- while underlying investment continues to grow. Cash-in or Death benefit, whatever remains of underlying investment). -- We saw this as a good way to provide college income for the grandkids ... along with added inflation protected income at 10-years out. The Pac Life doubles in about 8-yearsl
Again, I'm not an annuity expert, but, have seen your financial posts elsewhere and wonder if there is something obvious that I'm missing. Again, Thanks.
i dont have the desire to read all 92 pages buy typically its not what you think....as best as i can tell from poking around on yours
the guarantees apply if you loose your money in your investment choice and your value dips below a certain amount , they will give you back your origional investment at the rate of 5-7% over a 10 year period and then your done. its not interest , they are just returning your principal and giving you back your own money at zero return over the 10 years. ...
. you get bonus points but they are credited in a way i cant figure out very well. i did find this explanation on line..good luck figuring it out.in this case they had a 5% guarantee
Awhile back I made a remark about reading up on the ‘book of terms’ of this type of annuity but I never figured it could be 92 pages.
jghorton= At 92 pages long, there’s a lot that anybody can miss! You have to ask yourself; “In this day & age, why on Earth would an Annuity entail reading 92 pages?†Try writing a letter to the company & see if they can chop off 70-80 pages.
yep that prospectus was 92 pages of the most confusing lingo . it all boils down to you get no free lunch.... typically annuities are all the same basic format once they convert to an income stream. some extend the guarantee to your origonal investment while its in the growing stages too and they guarantee your principal.however that 5 or 7% they speak of in that stage means if you lost all your money they would return that percentage a year to you of your origonal investment,its not interest over and above your principal ..
lets look at a 5% guarantee, the numbers are easy to do in my head..
imagine you give someone 100k.. they then give you back 5% of your own origonal investment each year or 5k a year . ... thats zero return for 15 years, all they did was give you a piece of your money back... in the mean time they invested your money and for the first 15 years you got zero return ..
once they give you back your money less all those fees if you die there is no money left for a death benefit.
if you live to year 16 your seeing your first return. you now got 5k over 16 years thats over and above what you put in. thats .003% return a year so far you saw in 16 years.... amazing how these work isnt it?
year 17 you now saw 10k in their money to date over and above your investment so your real return is .006% a year. these annuities sound great when they talk percentages but they dont make it clear your running on your own dough for more then a decade. they are talking withdrawl rate, your thinking interest or return. they are not the same.
im not saying a guaranteed income is a bad thing. i feel there can be a place for annuities for sure. just realize the percentages they are talking are not in addition to your origonal investment but rather whatever you get replaces your origonal investment.
Last edited by mathjak107; 11-19-2010 at 04:00 AM..
I work hard, save hard, and invest so i can be financially independent by 40, then i can do all those things and have a nice retirement. I know i'm sacrificing my youth, but its better to bust @ss while my @ss can take it.
Wow...life is unpredictable. If you die at 39, would you have enjoyed life?
That's your choice if you wish to spend it on crap, rather than spend it on something that will bring you a happier death, more peace of mind in the face of a vastly reduced income.
As they say: Nothing brings you closer to eternity than travel.
With my continual uncertainty that I wouldn't live long enough to enjoy world travel, I've traveled the entire globe, just to make double-sure I saw it all
before my first retirement check hit my mailbox.
Now? I've seen it all! Won't need that extra money anymore.
And who wants to climb around Greek ruins, Macchu Picchu, climb the Great Wall at 65?
That's a helluva lot of work, will you have the strength to do it at 65?
Now, now, now, is the time to do it, don't postpone it one single second, unless you plan to travel on cruise ships!
Generally, if you're pretty old and don't want to pass the wealth to anyone else after you die.
Or if you need more of a withdrawl then you can get on your own. but thats typically done with immeadiate annuities... that will give you a bigger withdrawl rate then you can get without huge risks.. the variable annuities the op is talking about are bought usually at a young age but are rarely worth it
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