Comments on: Variable Annuities Overview http://moneysmartlife.com/variable-annuities-overview/ Money Tips for a Better Life Sat, 20 Mar 2010 00:29:02 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: Anonymous http://moneysmartlife.com/variable-annuities-overview/comment-page-1/#comment-169511 Anonymous Sun, 03 Jan 2010 23:48:52 +0000 http://moneysmartlife.com/?p=2595#comment-169511 wooo hooo wooo hooo

]]> By: Bonnie http://moneysmartlife.com/variable-annuities-overview/comment-page-1/#comment-165163 Bonnie Fri, 30 Oct 2009 09:47:48 +0000 http://moneysmartlife.com/?p=2595#comment-165163 Joe, you're confusing equity-indexed annuities with variable annuities. Also, to do a true comparison of various VAs, you have to run illustrations assuming a zero percent rate of return. That'll show you the effect of fees on different VA products. Victor, the only financial advisors glossing over fees are those that want to lose their license. With VA guaranteed income riders, you're paying a fee (often close to 1% nowadays) to insure a portion of your retirement assets and guarantee that you won't outlive the income derived from that account, without having to annuitize and also with the potential to benefit from market gains. There are no guarantees without paying for the insurance (i.e. annuity rider) on the assets. Otherwise, you'd have a plain old mutual fund, which is fine for younger investors, but may not cut it for the 70% of people retiring without a traditional pension. Simply recall 2008 and the many retirees who were forced to go back to work because the income used for essential expenses came from non-guaranteed sources (i.e. other than pensions, social security, and annuities). Joe, you’re confusing equity-indexed annuities with variable annuities. Also, to do a true comparison of various VAs, you have to run illustrations assuming a zero percent rate of return. That’ll show you the effect of fees on different VA products.

Victor, the only financial advisors glossing over fees are those that want to lose their license. With VA guaranteed income riders, you’re paying a fee (often close to 1% nowadays) to insure a portion of your retirement assets and guarantee that you won’t outlive the income derived from that account, without having to annuitize and also with the potential to benefit from market gains. There are no guarantees without paying for the insurance (i.e. annuity rider) on the assets. Otherwise, you’d have a plain old mutual fund, which is fine for younger investors, but may not cut it for the 70% of people retiring without a traditional pension. Simply recall 2008 and the many retirees who were forced to go back to work because the income used for essential expenses came from non-guaranteed sources (i.e. other than pensions, social security, and annuities).

]]> By: Victor http://moneysmartlife.com/variable-annuities-overview/comment-page-1/#comment-165075 Victor Thu, 29 Oct 2009 17:43:21 +0000 http://moneysmartlife.com/?p=2595#comment-165075 Joe, You are absolutely correct. This product is good in the RIGHT spot for the RIGHT person. As a financial advisor, I watched other professionals pitch these and hang their hat on that "guarantee." Those fees are usually glossed over. For some people, the fee won't matter because they want to feel safe and know that income will be there. Joe, You are absolutely correct. This product is good in the RIGHT spot for the RIGHT person. As a financial advisor, I watched other professionals pitch these and hang their hat on that “guarantee.”

Those fees are usually glossed over. For some people, the fee won’t matter because they want to feel safe and know that income will be there.

]]> By: JoeTaxpayer http://moneysmartlife.com/variable-annuities-overview/comment-page-1/#comment-164944 JoeTaxpayer Thu, 29 Oct 2009 01:51:10 +0000 http://moneysmartlife.com/?p=2595#comment-164944 I've sifted through the prospectus of many a variable annuity, and not found one worth my time. The 5% or market return must have a catch, it's usually not the full market return but either a fraction, maybe 75%, or a cap, say 10%. In the end, there's some comfort in feeling you'll never have a negative year, but over time the fees eat you up. I'd love to see a link to a VA that someone is wiling to recommend, and see an analysis of how it would perform over time. Joe I’ve sifted through the prospectus of many a variable annuity, and not found one worth my time. The 5% or market return must have a catch, it’s usually not the full market return but either a fraction, maybe 75%, or a cap, say 10%. In the end, there’s some comfort in feeling you’ll never have a negative year, but over time the fees eat you up.

I’d love to see a link to a VA that someone is wiling to recommend, and see an analysis of how it would perform over time.
Joe

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