Thoughts on buying Annuities for Retirement income...

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LMCane
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7:54a, 1/17/23
anyone use an annuity?

I have always heard most investors frown on this as not worth the cost- but it seems like a good idea to diversify and have a guaranteed income stream along with all the other income streams for retirement.
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Cyp0111
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In reply to LMCane • 8:07a, 1/17/23
Sure, but couldn't you construct something similar without the significant cost to do so with annuities?
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Harkrider 93
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8:26a, 1/17/23
AG
You can do this on your own at a fraction of the cost, but you can't guarantee anything.

The annuity company charges a fee to guarantee your income. If you need that to sleep at night, then it is worth it. Only you will know if it is worth it to you.
As the waves roll, the eagle will fly to the setting sun.
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QuantumNoodle
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8:31a, 1/17/23
Immediate annuities are the only kind of annuity I would consider, and then, only in good health and well into retirement, as only one part of a portfolio of different income streams.

This article is great, and unbiased.
https://www.morningstar.com/articles/1088012/do-you-need-an-annuity-for-retirement-income

And this youtube channel is very informative:
https://www.youtube.com/@StanTheAnnuityMan



Be careful when asking about annuities on the internet as insurance salespeople tend to weasel their way into the discussion.
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OldArmyCT
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10:04a, 1/17/23
AG
If you get yourself a good collection of high quality dividend paying stocks you should do better. And with today's depressed prices you may even make money. Annuity salespeople may try to upsell you and don't always understand what they're selling. And if on listening to their pitch they start talking life insurance as a retirement vehicle, run away.
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LMCane
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In reply to QuantumNoodle • 11:14a, 1/17/23
RockOn said:
Immediate annuities are the only kind of annuity I would consider, and then, only in good health and well into retirement, as only one part of a portfolio of different income streams.

This article is great, and unbiased.
https://www.morningstar.com/articles/1088012/do-you-need-an-annuity-for-retirement-income

And this youtube channel is very informative:
https://www.youtube.com/@StanTheAnnuityMan



Be careful when asking about annuities on the internet as insurance salespeople tend to weasel their way into the discussion.
fantastic advice I will check it out.

I have always heard it is never a good thing to buy annuities, but if there is a way to get a relatively inexpensive one with guaranteed lifetime income stream each month that would be pretty great to add to the portfolio

especially the way things have been the last two years
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fka ftc
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12:42p, 1/17/23
Just my personal anecdotal, but the only time annuities have come up in our financial plannings was as part of a way to defer some comp in a defined benefit plan, Only then it was 'okay' because the tax savings were greater than the fees and restrictions and at the time I had no other ways to reduce taxable income.

Some people like the piece of mind and the repetitiveness of the "check" arriving each month, regardless of market. But that comes with a cost.
"The absence of the word accountability is not the same as wanting no accountability" -unknown

"You can never go wrong by staying silent if there is nothing apt to say" -Walter Isaacson
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DanTanna86
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2:44p, 1/17/23
AG
Don't do it.

DT
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Baby Billy
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5:38p, 1/17/23
AG
Very rarely have I met a client that likes their annuity. They're using counting down the days till there's no surrender charge and they can get access to their money
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fka ftc
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In reply to Baby Billy • 5:39p, 1/17/23
Bizarro Jerry said:
Very rarely have I met a client that likes their annuity. They're using counting down the days till there's no surrender charge and they can get access to their money
I had to unwind mine due to tax law changes (in my favor, but still "cost" me). On top of surrender charges, I then had to pay fees to dissolve the plan and then lawyer and actuarial charges for them to determine the amount of surrender charge and net proceeds to me. A ****ing mess.
"The absence of the word accountability is not the same as wanting no accountability" -unknown

"You can never go wrong by staying silent if there is nothing apt to say" -Walter Isaacson
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QuantumNoodle
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7:34a, 1/18/23
Just don't do this...

https://texags.com/forums/57/topics/3323348
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rathAG05
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In reply to QuantumNoodle • 10:58a, 1/18/23
AG
RockOn said:
Just don't do this...

https://texags.com/forums/57/topics/3323348


Annuities aren't all bad. The problem is that they can be sold by insurance reps that are more interested in earning a commission than doing what's best for you. There is a lot of research that's shows that annuities, used properly during retirement, with guaranteed lifetime withdrawal benefits, increases your insured income and takes pressure off your invested assets.

Most people do not understand why they own them and how they work. That's a black eye for the industry for sure, but they are not all bad. It all goes back to your risk tolerance. If having a steady stream of income for life is a priority and you don't want to own a rental property, it can make sense.

I've counseled a lot of couples out of annuities, and I've also recommended annuities where it makes sense. It's never a one size fits all scenario.
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fka ftc
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In reply to rathAG05 • 11:02a, 1/18/23
Bingo and well said. They are just one tool in the arsenal of retirement wealth planning.
"The absence of the word accountability is not the same as wanting no accountability" -unknown

"You can never go wrong by staying silent if there is nothing apt to say" -Walter Isaacson
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LMCane
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In reply to QuantumNoodle • 11:50a, 1/18/23
RockOn said:
Just don't do this...

https://texags.com/forums/57/topics/3323348
meaning don't do what the Original Poster did who was celebrating his annuity?
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LMCane
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In reply to rathAG05 • 11:52a, 1/18/23
rathAG05 said:
RockOn said:
Just don't do this...

https://texags.com/forums/57/topics/3323348


Annuities aren't all bad. The problem is that they can be sold by insurance reps that are more interested in earning a commission than doing what's best for you. There is a lot of research that's shows that annuities, used properly during retirement, with guaranteed lifetime withdrawal benefits, increases your insured income and takes pressure off your invested assets.

Most people do not understand why they own them and how they work. That's a black eye for the industry for sure, but they are not all bad. It all goes back to your risk tolerance. If having a steady stream of income for life is a priority and you don't want to own a rental property, it can make sense.

I've counseled a lot of couples out of annuities, and I've also recommended annuities where it makes sense. It's never a one size fits all scenario.
I'm 52

it sounds like you are stating not to buy one until well into retirement planning?
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rathAG05
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1:04p, 1/18/23
AG
If you are interested in an annuity contract solely for the income guarantee, I wouldn't really consider looking at your options until you are within 10 years of retirement. And keep in mind that you are penalized if you withdraw from an annuity contract before the age of 59.5.

If you are seriously considering one, I would not purchase through and insurance rep. Not sure if you have an FA or are a DIY type of individual, but you really want to get sound counsel on your entire plan to help determine the type of annuity and amount to put in it.
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fka ftc
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In reply to rathAG05 • 1:07p, 1/18/23
rathAG05 said:
If you are interested in an annuity contract solely for the income guarantee, I wouldn't really consider looking at your options until you are within 10 years of retirement. And keep in mind that you are penalized if you withdraw from an annuity contract before the age of 59.5.

If you are seriously considering one, I would not purchase through and insurance rep. Not sure if you have an FA or are a DIY type of individual, but you really want to get sound counsel on your entire plan to help determine the type of annuity and amount to put in it.
Pretty sure at some point you have to pay the insurance rep or at least the underwriter.
"The absence of the word accountability is not the same as wanting no accountability" -unknown

"You can never go wrong by staying silent if there is nothing apt to say" -Walter Isaacson
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rathAG05
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In reply to fka ftc • 1:24p, 1/18/23
AG
Well, my point was simply that buying an annuity from someone that understands your entire financial picture and objectives is much better than buying from an insurance rep that is looking at you as a commission.
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fka ftc
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In reply to rathAG05 • 2:43p, 1/18/23
100% agree. Just pointing out the fees on fees.

I cannot imagine buying an annuity without being well counseled by a financial advisor or being very well read on your own.
"The absence of the word accountability is not the same as wanting no accountability" -unknown

"You can never go wrong by staying silent if there is nothing apt to say" -Walter Isaacson
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AugustusGloop
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6:30p, 1/18/23
AG
I agree with rathag there are benefits for the right person. Yes they are freaking expensive. They do have no commission annuities that can be put in wrapped accounts (fee based accounts) but they still have crazy internal costs not including the wrap fee. As long as they are sold properly they are amazing products. If they are sold incorrectly they can be disastrous.
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