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Old 01-31-2016, 08:51 AM
 
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immediate annuity's are lifetime contracts .

you can get short term contracts called GIC'S but the payouts suck . there are no mortality credits and everyone gets their money back . they are really cd's from an insurance company if you go short term . not worth it in my opinion .

the lifetime are where you get bigger cash flows then you can safely take on your own . those who die pay for those who live .

so imagine you give me a sum of money and i return it to you each year at a flow of 6% a year . you risk running out of money trying to draw 6% on your own .

about 16 years later you got all your money back and now you go on my dime as i pay you as long as you live . but if you die you can pass it to a spouse if a joint annuity . if single then like a pension it dies with you .

but used alone i don't really like them . i like them when used as part of the bond budget in a diversified portfolio . then the rest of the portfolio can run longer without selling equity's off to refill spending money . as well as the sequence risk free income allows you to invest more money more aggressively if you like .

Last edited by mathjak107; 01-31-2016 at 09:01 AM..
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Old 01-31-2016, 07:16 PM
 
Location: Eastern UP of Michigan
1,202 posts, read 682,631 times
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Quote:
Originally Posted by Maple47 View Post
Larry Siegel,

Thank you for explanation. Now I see the idea.
Sorry, I have more questions.
1. All these annuities are not "lifetime", but "term certain", which is 5 years, right?
2. Why is the first annuity payment $1000000, but not 100000 approximately, as the others are? It is ten times larger.
3. I understand your note on 2%, however, due to the laddering I shall get better rate already! Why do I add more rate on the top of this better rate?
I understand the diversifying issue.

The amount you put in is up to you. Sure that some companies have a minimum, but our 1st and at present only SPIA was for 75K. The payout is 319 and some change. We came up with a $$ we wanted to get to help establish a guaranteed income floor when we add SS(sometime in the next 1-2 years) and a small pension I get in 2019). It was also a figure that "repaid" us for the dollars reduced when we arranged a spousal benefit for me from Jims federal pension.


We might do another around age 67 that may be roughly equivilant to the amount of SS that is reduced based on when I ultimately collect SS.


So we had a couple of reasons why we did it.


The hardest part I had was the giving up the control of the money. The last month of so the SPIA has provided a great deal of comfort.
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Old 02-02-2016, 10:52 AM
 
426 posts, read 188,715 times
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Quote:
Originally Posted by mathjak107 View Post
the first to likely die should get the single annuity with life insurance for the spouse to get. . . that way the spouse gets nice tax free insurance unlike the annuity .
Looks good to me - thank you.
Sorry, what kind of life insurance, please: Term, Whole, Universal?
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Old 02-02-2016, 11:11 AM
 
71,584 posts, read 71,751,865 times
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i would use a single premium whole life at this stage
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Old 02-03-2016, 10:09 AM
 
426 posts, read 188,715 times
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Quote:
Originally Posted by JIMANDTHOM View Post
The amount you put in is up to you. Sure that some companies have a minimum, but our 1st and at present only SPIA was for 75K. The payout is 319 and some change. We came up with a $$ we wanted to get to help establish a guaranteed income floor when we add SS(sometime in the next 1-2 years) and a small pension I get in 2019). It was also a figure that "repaid" us for the dollars reduced when we arranged a spousal benefit for me from Jims federal pension.


We might do another around age 67 that may be roughly equivilant to the amount of SS that is reduced based on when I ultimately collect SS.


So we had a couple of reasons why we did it.


The hardest part I had was the giving up the control of the money. The last month of so the SPIA has provided a great deal of comfort.
Sorry, would you explain in details, what happens at age 67, please? Why SS is reduced?
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Old 02-03-2016, 10:17 AM
 
426 posts, read 188,715 times
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Quote:
Originally Posted by mathjak107 View Post
i would use a single premium whole life at this stage
Any recommendation how to get a quote for it properly?
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Old 02-03-2016, 10:32 AM
 
426 posts, read 188,715 times
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Quote:
Originally Posted by mathjak107 View Post
the payout increases by age as well as interest rates if they go up ,.

i would take the money i want to allocate and divided it up over as many as 5 years and just buy each year . i would do this for myself if i did it starting at 70 .
It seems the sequence looks this way:
Age 70 - I buy annuity for $100,000
Age 71 - I buy annuity for $100,000
Age 72 - I buy annuity for $100,000
Age 73 - I buy annuity for $100,000
Age 74 - I buy annuity for $100,000.
Is that correct?
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Old 02-03-2016, 11:26 AM
 
Location: Eastern UP of Michigan
1,202 posts, read 682,631 times
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Quote:
Originally Posted by Maple47 View Post
Sorry, would you explain in details, what happens at age 67, please? Why SS is reduced?


Probably didn't explain well. I am going to take SS at 63-64. So my SS will be reduced from full $$ at age 66 to a couple hundred less $$ per month at 63 or 64. So I am thinking about buying another SPIA at age 66-67 to cover the difference.
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Old 02-03-2016, 12:06 PM
 
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the best deal ever is delaying ss . you can't buy any inflation adjusted annuity that can compete with what you get by delaying ss for the amount of money you give up taking.

it would never pay to take ss and then buy an annuity to replace what you give up . it would cost much more to get an inflation adjusted one .
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Old 02-03-2016, 12:36 PM
 
426 posts, read 188,715 times
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Quote:
Originally Posted by LTCShop View Post
Your rates with a company can go up dramatically over a period of a few years.

Robyn, you live in Florida. Most things have improved over the past 20 years, including long-term care insurance. Long-term care policies that are available for sale today have much different rules and regulations than policies that were sold years ago.

Most of the policies that have had premium increases have been policies that were sold before the "Rate Stability Regulation" was approved in that state.

Florida passed their “Rate Stability Regulation” in January 2003 and it became effective for all policies purchased after February 28th, 2003. Nearly all of the premium increases on Florida LTC policies have been on policies purchased BEFORE March 1st, 2003.

Everyone who has purchased a long-term care insurance policy approved by the state of Florida since March 1st, 2003 is protected by these strict rules regarding rate increases.

13 insurance companies sell nearly all of the long-term care policies in Florida. Of these top 13 companies, only one of those 13 companies has had a rate increase on policies sold since March 1st, 2003. The other 12 have not had any rate increases on any of the policies they’ve sold since the regulation took effect.

Long-Term Care Insurance Rate Increases Florida


Your insurer can go out of business.

As a lawyer, you should know that this rarely happens with large insurance companies, especially large mutual insurance companies. "National States" (the one company you were able to find that went bankrupt after the mortgage crisis) was never a strong company. To suggest that companies like Mutual of Omaha, Mass Mutual, New York Life, Transamerica, are likely to go out of business in our lifetimes, is ludicrous. You're smarter than that.

And your reference to AIG "needing a bail out" is flat wrong. When AIG needed a bailout, it was NOT the AIG insurance companies that went bankrupt. The AIG insurance companies NEVER needed a bailout. The non-regulated part of AIG that sold non-regulated credit default swaps needed the bailout from the federal government. AIG ended up selling many of its insurance companies (which were all very profitable) in order to pay back all of the “bailout money” plus a profit for the federal government of about $22 billion.

https://goo.gl/7aDgq7 (Read the Big Short, if you haven't already).



Also - LTC insurance usually pays a specific dollar amount of benefits which is usually less than those who spend the most on LTC will spend

So? If I have an LTCi policy that pays $200 per day and my care costs $250 per day, it was a good thing to own the LTCi policy. I'd rather withdraw only $50 per day from my savings to make up the difference, rather than the full $250 per day. Wouldn't you?




and it is pretty easy to get the same benefits from a personal investment account as opposed to buying the insurance if one starts fairly early.

If I knew that I (or my wife) was going to need surgery 10 years from now, I wouldn't own medical insurance, Robyn. I would save the $18,000 per year I pay in medical insurance premiums and invest it. And then when I got cancer or needed that open heart surgery, the money would be there and I'd pay it.

The problem is that I don't know when it will happen. That's why I pay those exorbitant medical insurance premiums every month.

The same is true with long term care. You think that long term care insurance is insurance for a "future event" that is decades away. Mathjak sees it as something that could happen at anytime. And so do I.

Suggesting to the OP to invest for her long term care expenses is assuming that nothing is going to happen to her or her hubbie for decades.

For about $90 per month per person, they could each have over a half million in LTCi benefits from one of the oldest insurance companies in the country. (hint: the company was founded during the Civil War).
And, it's a company that has NEVER had any premium increases on any of their LTCi policyholders.



You're obviously very intelligent. I suspect that your bias against LTC insurance is based upon reading headlines and not understanding the substance.
LTCShop,
Where do I go for LTC insurance, please? I suppose there are several companies to compare.
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