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The company where I worked bought all pensioners an annuity that pays exactly what we were receiving from our pensions and then terminated the pension program. It has been working for a year and a half now with no problems.
Anyone know anything about them? I have been advised to put my meager savings or at least part of it into an annuity. But I have to admit I don't really understand how they work. I did ask a nice investment counselor but nice or not nice he probably has his own agenda since he sells them for a living.
I would venture to say except for spia’s few really understand their variable or index linked annuity. In fact most have no clue how even whole life works. They think the cash value pertains to some investment made on their behalf with excess funds
My mother didn't understand anything about finance. She had a lousy stock broker. She lost quite a bit of money. She took her money out and put it in a Fidelity annuity.
She didn't loss any more money and she had a steady income.
If you are market savvy, you could probably get a better return. For my mother, it was perfect.
I would venture to say except for spia’s few really understand their variable or index linked annuity. In fact most have no clue how even whole life works. They think the cash value pertains to some investment made on their behalf with excess funds
There isn't all that much to understand. There are only two kinds of annuities really: fixed and variable.
Fixed annuities are what the name says: fixed. You get a specified amount of money every month, for a specified number of years, or as long as you live, based on the initial premium. You obviously get more money if you pay a larger premium, or if you delay the annuity payments for many years. Obviously, the major part of it is the return of your own money, but you do get something extra, and that extra is more than you get as an interest from a bank CD. For a life annuity, you can get a LOT extra if you live very long. It is best suitable for single retirees, ie, not a good way to leave money to someone else.
Variable annuities are a theft. They really should be outlawed.
All one needs to know is whether you are signing up for a fixed amount every month, or the amount allegedly grows with time. If it is fixed, that is fine. If it is supposed to "grow" (as indexed to inflation, or share of profit, or any other way), forget it, because it WILL NOT grow (due to management fees that are greater than inflation or share of profit). If one is basing retirement largely on annuities, one should get several FIXED annuity policies that start paying out at later times (to compensate for inflation), NOT a variable or inflation-indexed annuity.
As I said, I have been more than happy with my fixed annuities, both immediate and delayed, that I got from the US companies (two of them are paying already, the others will be starting in the future). What I wanted to say is that I was tricked by a major, "reputable" Swiss insurance company into getting a delayed VARIABLE annuity (because "variable" is not mentioned anywhere in the phenomenally deceptively worded contract), and not only that, but they have been providing annual account statements that look as though the accounts contain much more money than I'll ever get.
Matjak is shocked that anyone would get any financial products outside the US, but some of us (such as I) immigrated into the US long ago, plus also in today's global conditions a lot of people do have their life spread over more than one country - it is not rare. Also, there are people whose savings in the US are legally at risk of seizure, due either to a risky profession (I mentioned medicine) or the divorce laws, and people like that have looked into Switzerland for centuries, because nobody can freeze or garnish your money if it is parked there. While it does not probably pertain to any tremendous number of regulars on this forum, all kinds of people worldwide do search the internet info for "Swiss annuities". I hope this forum/thread will come up in their search, and they will be warned NOT to get an annuity from a Swiss company because of a high likelihood of the above described deceptive practices. And I am not even talking about any shady little rinky dinky company, but a major Swiss insurer. Do not get any kind of Swiss annuity. DO NOT get it, no matter what.
And in the US, do not get a variable annuity. Get FIXED annuities only, from reputable US insurance companies, through a reputable broker. I already mentioned the annuity broker that I used repeatedly over the past 15 years, and I have been highly satisfied with them.
There isn't all that much to understand. There are only two kinds of annuities really: fixed and variable.
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if you think there is not much to understand in annuities then you put your own understanding of them in to question because variable and index linked annuities are big part of the annuity world like em or not ... variable annuities and index linked annuities can be extremely complex and very difficult to understand , hence my comment . .
in fact there are bond index linked fix income annuities that can be a mother to understand exactly what you are getting to the layman ..i have broken them down here a few times to expose why .
the only simple ones with nothing to look at under the hood are plain old immediate annuities (spia's).
if you think there is not much to understand in annuities then you put your own understanding of them in to question because variable and index linked annuities are big part of the annuity world like em or not ... variable annuities and index linked annuities can be extremely complex and very difficult to understand , hence my comment . .
in fact there are bond index linked fix income annuities that can be a mother to understand exactly what you are getting to the layman ..i have broken them down here a few times to expose why .
the only simple ones with nothing to look at under the hood are plain old immediate annuities (spia's).
Delayed fixed annuities give you way more money than the immediate ones, for the same premium, though. Again, with fixed annuities, there is only one thing to look for: the amount of monthly payment that you'll receive. This amount has to be fixed and guaranteed. There should be no possibility for this amount to vary or grow. As long as the amount that you'll get every month is fixed in cement, the annuity is solid.
Delayed fixed annuities give you way more money than the immediate ones, for the same premium, though. Again, with fixed annuities, there is only one thing to look for: the amount of monthly payment that you'll receive. This amount has to be fixed and guaranteed. There should be no possibility for this amount to vary or grow. As long as the amount that you'll get every month is fixed in cement, the annuity is solid.
they are basically the same as immediate ... delaying works out a bit better then deferred does ....you are paying expenses all along with deferred only to collect down the road .. with immediate you are not , you pay based on that time frame down the road ...
if you basically use fixed annuities as longevity annuities which kick in very late in life they can be very very cheap because the odds are you stand less of a chance of seeing a dime ... but they can help an underfunded retirement since you can plan to say 80 with your own money and if still alive let the longevity annuity kick in .
What’s the difference between delayed fixed annuities vs differed annuities. They seem like the same to me. All I know is it’s best for a male toget SPIA at close to age 80 to get longevity credit. I might do it for some of my husband’s IRA. But females don’t get the same kind of credit because we live longer.
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