Annunities

Discussion in 'Finance' started by Ernest T., Oct 20, 2019.

  1. Ernest T.

    Ernest T. Newly Registered

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    What's your opinion on opening an annuity (indexed), considering these unpredictable times? (Are times ever predictable?)

    Not so sure the FED will lower the rate again. Looks like more QE, but we can't call it that.

    Fixed or Indexed, that is the question.
     
  2. Docbroke

    Docbroke Active Member Past Donor

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    Your annuity choice is based on your circumstances. I have a couple deferred annuities that I use for tax purposes. My opinion is positive, my annuities invest in a balanced fund and the value resets yearly, they can not go down. The trade off is I get less of a return due to the fund structure. I think they are good low risk positions in a portfolio.
     
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  3. Ernest T.

    Ernest T. Newly Registered

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    Thanks for the response. Lets root for a strong stock market to grow your principal.

    I'm wondering about the possible circumstances of an annuity's issuer (ins .co) failing. AIG sticks in my craw.

    I'm not sure my agent was correct when he said "you can recoup $100,000 in case of an ins. bankruptcy."

    Seems to me if the issuing ins. co goes under, so does the annuity holder. (Not like a CD)
     
  4. Docbroke

    Docbroke Active Member Past Donor

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    That is the risk we take with any financial instrument, there is no guarantee.

    However, I believe that annuity companies reduced the percentage payouts in response to poor stock market performance around the financial crises.
     
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  5. pjohns

    pjohns Well-Known Member

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    I have several annuities; and I like them because I can never outlive them. (They are a guarantee for life. No doubt, they are based upon averages; but I hope to outlive those "averages." )

    Oh, I did make one mistake, in purchasing them: I really should have gotten annuities that are indexed to inflation. (Without this indexing, they are really losing purchasing power each year.)
     
    Last edited: Jul 4, 2020

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