1. Attention: We have put together a thread with tips and a tutorial video to help with using the new software. Please take a moment to check out the thread here: Trapshooters.com Tutorial & Help Video.
    Dismiss Notice

Market questions

Discussion in 'Politics, Elections & Legislation' started by mirage1, Mar 8, 2009.

Thread Status:
Not open for further replies.
  1. mirage1

    mirage1 Member

    Joined:
    May 16, 2006
    Messages:
    293
    I guess I am in the same predictment as a lot of people right now.
    I was wondering if anyone has any experience-owns
    guaranteed variable annuties?? What is the history-pros and cons??
    Also, is it possible to hire someone to evaluate your portfolio
    that is not selling something-someone who is independent????
    Someone who is looking out for my interests????

    Thanks,
    Joe
     
  2. mirage1

    mirage1 Member

    Joined:
    May 16, 2006
    Messages:
    293
  3. hmb

    hmb Well-Known Member

    Joined:
    Jan 29, 1998
    Messages:
    9,424
    Pat,

    Contributions to an IRA are tax deductable, contributions to a Roth IRA are not. Distributons from an IRA are tax deferred, Distributions from a Roth IRA are usually tax free. HMB
     
  4. grnberetcj

    grnberetcj Active Member

    Joined:
    Jan 29, 1998
    Messages:
    5,680
    Annuities are a gimmick perpurtrated by insurance companies...akin to whole life policies, etc.
     
  5. mirage1

    mirage1 Member

    Joined:
    May 16, 2006
    Messages:
    293
  6. bigdogtx

    bigdogtx Well-Known Member

    Joined:
    Aug 5, 2006
    Messages:
    10,650
    Joe,

    There are fee only advisors. You will pay $1,500 up to have them evaluate your situation and position. They do not provide product solutions, just advice. You will then have to find a provider of the solutions that they recommend in which you want to use.

    VA's are very good for the guaranteed income portion of your portfolio. Most of the annuities sold since 2001 have "Income Riders". These will guarantee an income of a certain percentage of your highest value in your contract. Now here's the "gimmick", this is based on the value at your anniversary or inception, regardless of your current value.

    There is also a death benefit associated with them. Another "gimmick" is that they will pay your beneficiary the anniversary amount or invested amount whichever is greater. Some contracts even had a 5% or higher growth rate annually. So if you invested in October 2007 and died today, with you account down 50% or more, hey your family still got the amount you invested originally.

    VA's have a higher cost than purchasing the mutual funds (in VA's these are called sub-accounts). The higher upfront costs provide the above and other benefits. If you don't need or want these benefits, you should not use VA's for your investment dollars.

    Hope this helps. Jim

    P3AT, I have never seen a VA in which you pay a "fee" to sell unless you are talking "T/C" which has a "surrender charge" on the "c" side. All others that I have seen, after the holding period are free from fees to cash in.
     
  7. warren

    warren Member

    Joined:
    Jan 29, 1998
    Messages:
    948
    Location:
    Fernley, Nevada
    You are the best person to look after your interests, it should be very clear by now that ALL the so called experts don't know night from day. Consider your investments as a business and run it like your life depends on it because it does. The information is out there and it is up to you to dig it out and make your own decisions don't rely on some so called expert. Just an opinion from somebody who has been to the school of hard knocks.

    warren
     
  8. grnberetcj

    grnberetcj Active Member

    Joined:
    Jan 29, 1998
    Messages:
    5,680
    Madoff is/was an "Expert" too!!

    Curt
     
  9. Finprof

    Finprof TS Member

    Joined:
    May 9, 2007
    Messages:
    167
    You can create your own guaranteed variable annuity without an insurance company and insurance agent getting a big fee. The process was described in MONEY magazine two months ago. The "guarantee" is usually after an extended period of holding the instrument, for example, ten years.

    You put the present value of the future guarantee into debt instruments of the same duration and put the rest into an index fund or ETF. YOu will have a gurantee of original principal and will also be sharing in the market return over time.


    Here are two questions to ask:

    1. How much will I get back if I want my money back in two years?

    2. If the S&P 500 doubles over the next 8 years, will my variable annuity also double? Can I take out the money and spend it?

    If anyone mentions a guaranteed variable annuity to me, I run in teh opposite direction.
     
  10. bigdogtx

    bigdogtx Well-Known Member

    Joined:
    Aug 5, 2006
    Messages:
    10,650
    Curt, Madoff was/is a crook/con man
     
  11. Guard Rail

    Guard Rail TS Member

    Joined:
    Jan 3, 2009
    Messages:
    209
    From what I have read about it. If the company you bought it from goes down, your money goes down with the ship. It is not insured. My wife has a 403b, so I have looked into it.

    BK
     
  12. bigdogtx

    bigdogtx Well-Known Member

    Joined:
    Aug 5, 2006
    Messages:
    10,650
    BK, what is "insured" today?

    To lose your monies in a VA, all the subaccount companies within the VA would have to have no value and this theoretically could happen. The insurance company issuing the contract only has the death benefit and income guarantees at risk with them based upon their claims paying ability.
     
  13. grnberetcj

    grnberetcj Active Member

    Joined:
    Jan 29, 1998
    Messages:
    5,680
    bigdog...yeppers...I forgot to add that also!! problem is: He's not alone and they walk among us.

    Curt
     
  14. bigdogtx

    bigdogtx Well-Known Member

    Joined:
    Aug 5, 2006
    Messages:
    10,650
    Curt, you are right, but not all are crooks or con men. When the public is getting 30% above all other managers,,,,something is WRONG,,,,the old addage of "If it is too good to be true, it usually is" really holds in his case. There are no "secrets" in investing that let you outdo everyone else,,,,long term,,,,most of his "investors" found this out!!!!
     
  15. racer

    racer TS Member

    Joined:
    Jan 29, 1998
    Messages:
    541
    Just a thought Joe- if you have an attorney, ask who his/her CPA is. The attorney's and the CPA's will generally be cautious in who they recomend for money manager types. Dan
     
  16. bigdogtx

    bigdogtx Well-Known Member

    Joined:
    Aug 5, 2006
    Messages:
    10,650
    Finprof, I need some clarification on your post.

    "You can create your own guaranteed variable annuity without an insurance company and insurance agent getting a big fee. The process was described in MONEY magazine two months ago. The "guarantee" is usually after an extended period of holding the instrument, for example, ten years.

    You put the present value of the future guarantee into debt instruments of the same duration and put the rest into an index fund or ETF. YOu will have a gurantee of original principal and will also be sharing in the market return over time."

    I couldn't find the article, could you assist me? Which guarantee in the VA are they suggesting be put into the debt instruments? Income or death benefit? I would assume you are referring to government bonds as the debt instruments, since that is the only debt instrument I know of to "guarantee" principal, but I am not sure. Thanks.

    "Here are two questions to ask:

    1. How much will I get back if I want my money back in two years?"

    It would depend on the performance of the underlying subaccounts.

    "2. If the S&P 500 doubles over the next 8 years, will my variable annuity also double? Can I take out the money and spend it?"

    If you invested in only an S&P subaccount,,,,you would get the return of the S&P subaccount, less the fees of the VA.

    Another question you may want to ask is, "If the market goes down, how much will I get and how much would my heirs get?"
     
  17. dmarbell

    dmarbell Active Member

    Joined:
    Aug 26, 2006
    Messages:
    1,572
    Make sure everyone reading or responding to this thread understands the differences between a variable annuity and a fixed annuity. There are fixed annuities on the market today which do not decrease in value. They are tied to, but not invested in, the S&P 500 for example. They are called "fixed index annuities," and the old terminology was "equity index annuities." Their returns will "vary" with the change in the S&P 500, but will not go down in value. Money put into these products does not go into the market. They have no "fees," because the return is fixed, although it can change. Some have guarantees, in the form of riders, on the account value, death benefit, and/or income benefit.

    Variable annuities have subaccounts, which invests the money in the market. Their account values can go up or down, depending on the investments. There are fees that are taken from the account, including fees for administration of the annuity and fees for administration of the subaccounts. Variable annuities can have guarantees, in the form of riders, on the account value, death benefit, and/or income benefit.

    The riders on fixed or variable annuities have a cost, which is a percentage of the account value.

    Annuities are also tax deferred. Most fixed and variable annuities have deferred surrender charges.

    Note that guarantees on any annuity depends on the financial strength of the issuing company. There are some guarantees in the form of state guaranty funds, which vary from state to state.

    A friend and client of mine invested with a large, nationally-known money management firm in 2001. His account balance is 41% of it's high value, and about 50% of his original investment. He put a smaller amount into a fixed index annuity about the same time, and it's value, before surrender charges, is 133% of his original purchase.

    Danny
     
  18. Bruce Specht

    Bruce Specht Well-Known Member

    Joined:
    Jan 29, 1998
    Messages:
    5,055
    Location:
    Near but not in chicago
    My fater in-law (rest his soul) was in the inusrance business as an accountant. His advise was ," by term life if anything and nothing else, all the rest of the policies are meant to produce large sums of money for the companies". ANuuities, whole life all those "savings plans policies are not doing you as the owner any good at all.
     
  19. mirage1

    mirage1 Member

    Joined:
    May 16, 2006
    Messages:
    293
    You guys are good-I am always amazed at the info
    on this site.
    Joe
     
Thread Status:
Not open for further replies.