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Old 01-19-2015, 06:34 AM
 
753 posts, read 707,256 times
Reputation: 1175

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Quote:
Originally Posted by lurtsman View Post
<--This is the financial analyst again

For the love of god, don't buy a new life insurance policy in retirement. Keeping an existing policy with value built into it, or keeping a term policy that was acquired years earlier at a lower rate is within reason. Buying a new life insurance policy is an absolutely awful financial decision. Many people will tell you otherwise, but the thing those people have in common (no offense intended, even if taken) is that they did not spend years learning personal or professional finance.

The value proposition on buying life insurance after you are retired is absolutely awful. The only reason for buying life insurance is that the person being insured will cause a substantial loss if they die. With survivors benefits, that should not be the case. It isn't like you need to go from renting an apartment on two incomes to renting on one, retiring without owning a home is simply poor planning. That doesn't sound like the OP.

On the topic of life insurance, for comparison, there was a very sad but hilarious fail that I'd like to mention. I had a friend working with a financial adviser that was not bound as a fiduciary (so a salesman, rather than someone legally bound to work in the best interest of this friend).

The friend had just had another child (married, only thing they had in common was wanting lots of children). He informed me that he had just purchased a small life insurance policy for his child. All I could do was face palm. No person was financially dependent on the new born. He had to pay enough to cover the expected costs of the policy payouts (the chance his kid would actually die), plus the cost of commissions for the salesman that sold it to him, plus the administrative costs of the insurance firm, plus the profits of the firm.

When you buy life insurance, you are buying a product with a negative expected value. The company selling it understands exactly what they are selling. The reason you buy life insurance is to transfer risk from yourself onto the insurance company. My wife and I are DINKs (double income, no kids). We both carry life insurance policies to protect each other from the higher costs of living alone because we still have costs like a mortgage that require the same amount of dollars regardless of whether there is one or two of us alive. We use term insurance so that we can get substantially more insurance for the dollars spent. It is okay that it will expire because we will have dramatically more money saved up then. We only need the insurance to cover the very small chance that one of us dies while we are relatively young and in strong earning years.

<--Financial analyst signing out
YAY that was well said! Thank you. I would love to email this quote to my DIL but it will probably get sent right back with a nastygram attached. DIL works for NYL and she loves her juicy commissions made preying on people's fears. Drives me buggy...
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Old 01-19-2015, 10:21 PM
 
10,819 posts, read 8,077,208 times
Reputation: 17034
Quote:
Originally Posted by mamasplace View Post
YAY that was well said! Thank you. I would love to email this quote to my DIL but it will probably get sent right back with a nastygram attached. DIL works for NYL and she loves her juicy commissions made preying on people's fears. Drives me buggy...
I have a brother-in-law who collects those commissions and is living the good life. He's a great guy and I love him but honestly there's something wrong with a system, like the one in my state, where life and auto and home insurance premiums go up-up-up and pay claims less-less-less (you have to fight to get them to pay at all), while their "agents" aka salesmen and saleswomen are raking in the money by the barrel. Good lord, it's unreal how much money he makes. He doesn't get commissions from us, we comparison-shop so usually take our business elsewhere. He's a good sport about it. We suspect he makes a hunk of his money from commissions and fees on annuities, one more reason we distrust those.

I have a nephew whom I also love dearly and he makes an obscene amount of money selling medical devices to doctors and hospitals. Don't even get me started on that, you don't want to know and that's a topic for another thread somewhere. ( I was shocked to learn these salespeople routinely put on scrubs and sit in on actual surgeries to train the docs to use the devices.)
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Old 01-20-2015, 05:34 AM
 
753 posts, read 707,256 times
Reputation: 1175
Quote:
Originally Posted by biscuitmom View Post
I have a brother-in-law who collects those commissions and is living the good life. He's a great guy and I love him but honestly there's something wrong with a system, like the one in my state, where life and auto and home insurance premiums go up-up-up and pay claims less-less-less (you have to fight to get them to pay at all), while their "agents" aka salesmen and saleswomen are raking in the money by the barrel. Good lord, it's unreal how much money he makes. He doesn't get commissions from us, we comparison-shop so usually take our business elsewhere. He's a good sport about it. We suspect he makes a hunk of his money from commissions and fees on annuities, one more reason we distrust those.

I have a nephew whom I also love dearly and he makes an obscene amount of money selling medical devices to doctors and hospitals. Don't even get me started on that, you don't want to know and that's a topic for another thread somewhere. ( I was shocked to learn these salespeople routinely put on scrubs and sit in on actual surgeries to train the docs to use the devices.)
Ah yes, the medical device career. I too have another relative who does that (SIL) and obscene is surely the word. If I were a patient facing surgery I would have it in writing to keep the moochers OUT of the gallery and far far away from my surgery, for sure.

A fast buck seems to be the career choice for younger people in my family anyway. Doesn't matter that it isn't always in the other person's best interests at all. Sad...
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Old 01-20-2015, 08:24 AM
 
Location: CT
3,461 posts, read 1,859,653 times
Reputation: 4614
To the OP, you say you don't understand investing and you're relying on other people's advice. So here's some more advice, you don't need to understand investing, what you really need to figure out is, what is your risk tolerance? Then you need to figure out how much money you think yo are going to need to make it to the end, we don't have a crystal ball to know everything but you have to take your best guess. Now, you know what you have, and you know what you need. From your thread, (if you don't have much money to invest) you seem to be very conservative and don't have a high tolerance for risk so maybe go with an annuity if it gets you to where you need to be. If you can tolerate a little more risk, go with mutual funds, if you want to get greedy for a higher return then go with a good mixed index fund like S&P 500. Don't make it more complicated than it has to be, if your personality is conservative, stay conservative. Good luck!
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Old 01-20-2015, 10:26 AM
 
Location: Near a river
16,042 posts, read 18,997,544 times
Reputation: 15649
On my way today to check out the senior center gym , I'm stopping at BN to get Money for Life by Steve Vernon. I checked it out on Amazon by "looking inside" and it looks possibly good.
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