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manaboutown
09-02-2023, 04:01 PM
I just happened upon this incredibly researched and well written book. Although it is slightly dated (2012) it was an eye opener for me and I have been around the block a few times during which I was kicked to the curb upon occasion. Although I survived and even thrived a lot of good luck was involved.

The title of the book is "Pound Foolish", its author Helaine Olen.

One caveat: It is written from a woman's perspective; the author leans to the left and is strongly opinionated. So, take what you like and leave the rest.

"Desperation, fear and insecurity can be a salesperson’s best friend. Ms. Olen learns how lucrative it is to sell financial services to the elderly, many of them terrified of outliving their savings. A 2009 AARP survey found that nearly one in 10 people over 55, or about 5.9 million Americans, had attended a free financial seminar in the last three years.

At the World MoneyShow, an annual event in Orlando, 80 percent of attendees were over 55. The author writes that “a panicked baby boomer is their best customer.”"

From: ‘Pound Foolish’ Eyes Problems of Personal Finance Advice - The New York Times (https://www.nytimes.com/2012/12/30/business/pound-foolish-eyes-problems-of-personal-finance-advice.html)

Boomer
09-02-2023, 10:14 PM
Hey, man……

Thanks for the book review. I just now ordered it. Good reviews. Even though the book has been around for a while, it sounds like the premise is more current than ever.


BUT can you explain why being written from a woman’s perspective is, according to you, a caveat.

AND there is nothing wrong with a little leaning. The extremes ( notice the plural) are what’s doing us in.

SO? Women can’t have strong opinions, but men can?

wow…….

Boomer

manaboutown
09-02-2023, 10:33 PM
I found much valuable factual information in her book and chose to ignore her peripheral obviously incorrect unsupportable biases thrown in here and there. The bulk of her book is highly informative. I read the book for what it revealed about questionable, sometimes contemptible, practices within the industry, and there are many.

Stu from NYC
09-03-2023, 05:28 AM
After going to a number of these financial seminars will say the majority would trust not quite as far as I can throw them.

Have picked up some info but no way do I trust them especially after they tell me their backrounds.

Caymus
09-03-2023, 06:29 AM
I found much valuable factual information in her book and chose to ignore her peripheral obviously incorrect unsupportable biases thrown in here and there. The bulk of her book is highly informative. I read the book for what it revealed about questionable, sometimes contemptible, practices within the industry, and there are many.

I reserved it from a library I can access. It is only available as an audiobook. The plus is if it is boring it will help me sleep.:laugh:

Two Bills
09-03-2023, 07:41 AM
Hey, man……

Thanks for the book review. I just now ordered it. Good reviews. Even though the book has been around for a while, it sounds like the premise is more current than ever.


BUT can you explain why being written from a woman’s perspective is, according to you, a caveat.

AND there is nothing wrong with a little leaning. The extremes ( notice the plural) are what’s doing us in.

SO? Women can’t have strong opinions, but men can?

wow…….

Boomer

:1rotfl: "You tell'em Lady!!" :boxing2:

UsuallyLurking
09-03-2023, 08:35 AM
Funny enough I started reading it for the second time yesterday. It seems more relevant now that I've moved to The Villages.

manaboutown
09-03-2023, 08:39 AM
Hey, man……

Thanks for the book review. I just now ordered it. Good reviews. Even though the book has been around for a while, it sounds like the premise is more current than ever.


BUT can you explain why being written from a woman’s perspective is, according to you, a caveat.

AND there is nothing wrong with a little leaning. The extremes ( notice the plural) are what’s doing us in.

SO? Women can’t have strong opinions, but men can?

wow…….

Boomer

Boomer, I respect your opinions and am dying to hear what you think of the book after you read it.

Again, I found it quite insightful and learned much about how the various components of this multifaceted industry operate and how "financial advisors" of every stripe profit, many handsomely. Ultimately the clientele pay for those large beautiful insurance company headquarters buildings and posh Wall Street operations, just as they do for casinos.

Having been a real estate investor since I was in my teens I found her background study of Robert Kiyosaki, the "Rich Dad Poor Dad" author, revealing. No, I won't spoil it for you. She wrote Robert Allen, the author of "Nothing Down", had been a missionary before becoming a real estate investor which is a little misleading. He is a Mormon and had done spent two years in Tahiti as a missionary, but it had not been his profession. She did not write anything about Mark O. Haroldsen, another real estate investment book author, whom I have met ("How to Wake up the Financial Genius Inside You"). Based on my personal experience the techniques espoused by Allen and Haroldsen can work out fine and dandy!

manaboutown
09-03-2023, 08:56 AM
After going to a number of these financial seminars will say the majority would trust not quite as far as I can throw them.

Have picked up some info but no way do I trust them especially after they tell me their backrounds.

Stu, according to the jargon of the industry as disclosed in the book you are a "plate-licker". If I had the time and inclination I would be one, too. Back in the 1970s some developers were converting beachfront motels in the Sarasota area into timeshares. I went from one to the next collecting Eisenhower (40% silver) dollars for showing up and taking their tours. At each place when "the closer" showed up I told him I was only there for the silver dollars. Without exception I collected them at each facility.

Stu from NYC
09-03-2023, 09:41 AM
Stu, according to the jargon of the industry as disclosed in the book you are a "plate-licker". If I had the time and inclination I would be one, too. Back in the 1970s some developers were converting beachfront motels in the Sarasota area into timeshares. I went from one to the next collecting Eisenhower (40% silver) dollars for showing up and taking their tours. At each place when "the closer" showed up I told him I was only there for the silver dollars. Without exception I collected them at each facility.

Interesting.

Years ago when to a few timeshare ones but found they were way to pushy so we stopped going.

Last financial one we went to turned into how great annuities were and how they were so much better than any stock mutual fund could possibly be. Lost me very quickly but was an excellent dinner at a restaurant we had been meaning to try.

Caymus
09-03-2023, 11:02 AM
Interesting.

Years ago when to a few timeshare ones but found they were way to pushy so we stopped going.

Last financial one we went to turned into how great annuities were and how they were so much better than any stock mutual fund could possibly be. Lost me very quickly but was an excellent dinner at a restaurant we had been meaning to try.

Too bad they can't be honest. There are probably times when annuities could be a good pick for certain people.

oneclickplus
09-04-2023, 04:37 AM
I just happened upon this incredibly researched and well written book. Although it is slightly dated (2012) it was an eye opener for me and I have been around the block a few times during which I was kicked to the curb upon occasion. Although I survived and even thrived a lot of good luck was involved.

The title of the book is "Pound Foolish", its author Helaine Olen.

One caveat: It is written from a woman's perspective; the author leans to the left and is strongly opinionated. So, take what you like and leave the rest.

"Desperation, fear and insecurity can be a salesperson’s best friend. Ms. Olen learns how lucrative it is to sell financial services to the elderly, many of them terrified of outliving their savings. A 2009 AARP survey found that nearly one in 10 people over 55, or about 5.9 million Americans, had attended a free financial seminar in the last three years.

At the World MoneyShow, an annual event in Orlando, 80 percent of attendees were over 55. The author writes that “a panicked baby boomer is their best customer.”"

From: ‘Pound Foolish’ Eyes Problems of Personal Finance Advice - The New York Times (https://www.nytimes.com/2012/12/30/business/pound-foolish-eyes-problems-of-personal-finance-advice.html)

Aaah - but times are not what they used to be ... even if one considers 2012 "recent". We are DEEP in uncharted territory. MASSIVE government and personal debt, rise of nations (BRICS, EU, Eurasian Economic Union, ASEAN) and the breakdown of society (WEF, UN, Bilderberg, woke this and that, crime unpunished, elected leaders can't define a "woman", etc). In my opinion, if you plan to live even 5 more years, you better plan for a way to survive when money fails. That's right. The US dollar is being destroyed. It's destruction will be complete in very short order. The massive US debt was only possible when other nations relied on the US dollar. Reliance on the US dollar by other nations is being whittled away almost daily now. Like approaching a cliff, the drop in buying power will be sudden and catastrophic. Once you see it happen, it will be too late to do anything about it. Better to see it now. What will you do when any money you have will not buy what you need? When you can't buy food ... water ... electricity ... What will society look like when money stops working? What will the criminals today do when they have trouble eating? The path we are on is unsustainable. Anything unsustainable will come to an end. No financial advisor or investment group can help you or anyone with this dilemma. No leaders can fix the problems any longer. There aren't enough rich people to tax. We are well past the point of no return. If one thinks things will just go on as they always have, they are mistaken.

Eg_cruz
09-04-2023, 05:11 AM
Too bad they can't be honest. There are probably times when annuities could be a good pick for certain people.
Agree

golfing eagles
09-04-2023, 05:13 AM
Aaah - but times are not what they used to be ... even if one considers 2012 "recent". We are DEEP in uncharted territory. MASSIVE government and personal debt, rise of nations (BRICS, EU, Eurasian Economic Union, ASEAN) and the breakdown of society (WEF, UN, Bilderberg, woke this and that, crime unpunished, elected leaders can't define a "woman", etc). In my opinion, if you plan to live even 5 more years, you better plan for a way to survive when money fails. That's right. The US dollar is being destroyed. It's destruction will be complete in very short order. The massive US debt was only possible when other nations relied on the US dollar. Reliance on the US dollar by other nations is being whittled away almost daily now. Like approaching a cliff, the drop in buying power will be sudden and catastrophic. Once you see it happen, it will be too late to do anything about it. Better to see it now. What will you do when any money you have will not buy what you need? When you can't buy food ... water ... electricity ... What will society look like when money stops working? What will the criminals today do when they have trouble eating? The path we are on is unsustainable. Anything unsustainable will come to an end. No financial advisor or investment group can help you or anyone with this dilemma. No leaders can fix the problems any longer. There aren't enough rich people to tax. We are well past the point of no return. If one thinks things will just go on as they always have, they are mistaken.

Thank you, Nostradamus. Or maybe America will wake up and get rid of the tax and spend idiots.

Stu from NYC
09-04-2023, 05:23 AM
Too bad they can't be honest. There are probably times when annuities could be a good pick for certain people.

They think they can make more money this way sad.

PersonOfInterest
09-04-2023, 05:35 AM
Aaah - but times are not what they used to be ... even if one considers 2012 "recent". We are DEEP in uncharted territory. MASSIVE government and personal debt, rise of nations (BRICS, EU, Eurasian Economic Union, ASEAN) and the breakdown of society (WEF, UN, Bilderberg, woke this and that, crime unpunished, elected leaders can't define a "woman", etc). In my opinion, if you plan to live even 5 more years, you better plan for a way to survive when money fails. That's right. The US dollar is being destroyed. It's destruction will be complete in very short order. The massive US debt was only possible when other nations relied on the US dollar. Reliance on the US dollar by other nations is being whittled away almost daily now. Like approaching a cliff, the drop in buying power will be sudden and catastrophic. Once you see it happen, it will be too late to do anything about it. Better to see it now. What will you do when any money you have will not buy what you need? When you can't buy food ... water ... electricity ... What will society look like when money stops working? What will the criminals today do when they have trouble eating? The path we are on is unsustainable. Anything unsustainable will come to an end. No financial advisor or investment group can help you or anyone with this dilemma. No leaders can fix the problems any longer. There aren't enough rich people to tax. We are well past the point of no return. If one thinks things will just go on as they always have, they are mistaken.


We are destined for destruction. We are doomed!

Which will come first, the collapse of our monetary system or Rapture?

MidWestIA
09-04-2023, 05:42 AM
HHMMmm you mean like BEFORE Trump your financial people had to be a fiduciary and not sell you crap for a big commission but then Trump quietly changed that so they do NOT have to be a fiduciary now? Those tv ads make sense now otherwise why do they even need to say that?

rsmurano
09-04-2023, 05:56 AM
You think the only vulnerable people are the elderly? Far from it. I’ve seen this for decades. If you go to a financial advisor/broker dumb founded, you are screwed! This goes for most things in life too, but it can really sting in the financial arena. Why do you think the term “fiduciary” has come up so much lately?

“A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties. Typically, a fiduciary prudently takes care of money or other assets for another person.”

Most people have no idea on what loaded funds are, what their fund expenses/fees are, or their tax consequences are when they go get help so they don’t know if what they have is good for them or good for the advisor.

This goes for asking somebody their advice on their advisor/broker if they are any good. If you don’t know the basics, nobody is going to know how that are actually doing. Why do you think annuities are so popular? People think that making X money for the rest of their life from an annuity is a good thing, but in reality, these people are losing money over the long run with an annuity compared to investing in broad index funds and holding them for the long term.

Caymus
09-04-2023, 06:52 AM
You think the only vulnerable people are the elderly? Far from it. I’ve seen this for decades. If you go to a financial advisor/broker dumb founded, you are screwed! This goes for most things in life too, but it can really sting in the financial arena. Why do you think the term “fiduciary” has come up so much lately?

“A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties. Typically, a fiduciary prudently takes care of money or other assets for another person.”

Most people have no idea on what loaded funds are, what their fund expenses/fees are, or their tax consequences are when they go get help so they don’t know if what they have is good for them or good for the advisor.

This goes for asking somebody their advice on their advisor/broker if they are any good. If you don’t know the basics, nobody is going to know how that are actually doing. Why do you think annuities are so popular? People think that making X money for the rest of their life from an annuity is a good thing, but in reality, these people are losing money over the long run with an annuity compared to investing in broad index funds and holding them for the long term.


From what I am researching annuities are not all created equal. For me an immediate fixed income annuity could be beneficial to me in the future when I reach the RMD age.

Robbb
09-04-2023, 07:01 AM
From what I am researching annuities are not all created equal. For me an immediate fixed income annuity could be beneficial to me in the future when I reach the RMD age.

How? Annuities are taxed as ordinary income, capital gains and dividends are taxed at a much lower rate, between 0 and 20%. So how would an annuity be beneficial when you reach RMD. In fact what does RMD have to do with it at all??

Stu from NYC
09-04-2023, 07:38 AM
From what I am researching annuities are not all created equal. For me an immediate fixed income annuity could be beneficial to me in the future when I reach the RMD age.

If you have a ways to go to reach retirement age, I believe a better way is a basket of good no load mutual funds. Compare history with what an annuity is offering.

An old saying is annuities are never bought they are sold.

Also what does this have to do with RMD?

Caymus
09-04-2023, 07:58 AM
If you have a ways to go to reach retirement age, I believe a better way is a basket of good no load mutual funds. Compare history with what an annuity is offering.

An old saying is annuities are never bought they are sold.

Also what does this have to do with RMD?


The vast majority is in ETF's and index funds, the balance is in treasuries. From what I read the payout from a qualified annuity also satisfies the RMD for that account.

I have about 8 years to research.:):)

petsetc
09-04-2023, 08:01 AM
And as always;

My addition to investment advice - take time to read Paul Merriman’s 3 FREE ebooks.
1. First-Time Investor
2. 101 Investment Decisions
3. Get Smart or Get Screwed (read this first!)

Found at paulmerriman.com

Also on his site are recommended portfolios for using Vanguard, Fidelity, T.Rowe Price or Schwab for DYI'ers. Much good info, ignore the puffery and sales pitches.

Also, if you want to know too much about annuities, listen to Stan The Annuity Man® | Brutally Honest Facts About Annuities podcasts.

Podcast - Have Fun With Annuities(R) | The Annuity Man (https://www.stantheannuityman.com/fun-with-annuities-podcast)

Last recommendation is FIRECalc: A different kind of retirement calculator (http://www.firecalc.com) , a Monte Carlo simulation of your future.

FWIW

bp243
09-04-2023, 09:13 AM
Hey, man……

Thanks for the book review. I just now ordered it. Good reviews. Even though the book has been around for a while, it sounds like the premise is more current than ever.


BUT can you explain why being written from a woman’s perspective is, according to you, a caveat.

AND there is nothing wrong with a little leaning. The extremes ( notice the plural) are what’s doing us in.

SO? Women can’t have strong opinions, but men can?

wow…….

Boomer

Thank you, Boomer! I'm wondering the same thing.

mntlblok
09-04-2023, 09:20 AM
And as always;

My addition to investment advice - take time to read Paul Merriman’s 3 FREE ebooks.
1. First-Time Investor
2. 101 Investment Decisions
3. Get Smart or Get Screwed (read this first!)

Found at paulmerriman.com

Also on his site are recommended portfolios for using Vanguard, Fidelity, T.Rowe Price or Schwab for DYI'ers. Much good info, ignore the puffery and sales pitches.

Also, if you want to know too much about annuities, listen to Stan The Annuity Man® | Brutally Honest Facts About Annuities podcasts.

Podcast - Have Fun With Annuities(R) | The Annuity Man (https://www.stantheannuityman.com/fun-with-annuities-podcast)

Last recommendation is FIRECalc: A different kind of retirement calculator (http://www.firecalc.com) , a Monte Carlo simulation of your future.

FWIW

Couple of thoughts come to mind. A basket of funds *may* continue to outperform. Have even heard that past performance might not guarantee same in the future.

Only recently learnt who invented that Monte Carlo thing. The third guy in the pic was also rather brainy. Not sure I know how to get the pic to show up, though, as it doesn't show in "preview". . .
Log into Facebook | Facebook (https://www.facebook.com/AtomicHeritageFoundation/photos/john-von-neumann-richard-feynman-and-stanislaus-ulam-at-los-alamos-during-the-ma/1377273712333426/?paipv=0&eav=AfZCr6rqmytHGm9qsbPUM4O7rDKu5mUEtXC2mTQYa0fUdO YOSu5BBiR2OGume_EO1to&_rdr)

https://www.facebook.com/AtomicHeritageFoundation/photos/john-von-neumann-richard-feynman-and-stanislaus-ulam-at-los-alamos-during-the-ma/1377273712333426/?paipv=0&eav=AfZCr6rqmytHGm9qsbPUM4O7rDKu5mUEtXC2mTQYa0fUdO YOSu5BBiR2OGume_EO1to&_rdr

manaboutown
09-04-2023, 09:20 AM
Thank you, Boomer! I'm wondering the same thing.

Then read the book. The answers to your questions are evident within its pages.

Pugchief
09-04-2023, 02:04 PM
Too bad they can't be honest. There are probably times when annuities could be a good pick for certain people.

The only people those annuities are a good pick for is the guys selling them.

Pugchief
09-04-2023, 02:05 PM
Or maybe America will wake up and get rid of the tax and spend idiots.

That would be lovely, but I wouldn't hold my breath....

Robbb
09-04-2023, 02:47 PM
The vast majority is in ETF's and index funds, the balance is in treasuries. From what I read the payout from a qualified annuity also satisfies the RMD for that account.

I have about 8 years to research.:):)

Yea keep looking into that, I have never heard that an annuity would satisfy an RMD. Unless your advisor is saying you should hold an annuity in a tax deferred account. If that was the case I would get another advisor.

Stu from NYC
09-04-2023, 03:08 PM
Yea keep looking into that, I have never heard that an annuity would satisfy an RMD. Unless your advisor is saying you should hold an annuity in a tax deferred account. If that was the case I would get another advisor.

I do believe that you take funds out of an IRA and 401 to satisfy an annuity. Something is rotten in Denmark as my friend Hamlet used to say

llaran
09-04-2023, 03:11 PM
Too bad they can't be honest. There are probably times when annuities could be a good pick for certain people.

is it a good idea to cancel an annuity?

Stu from NYC
09-04-2023, 04:42 PM
is it a good idea to cancel an annuity?

Read your contract first or have someone like a lawyer do so.

Topspinmo
09-04-2023, 04:45 PM
:1rotfl: "You tell'em Lady!!" :boxing2:


Proved women has strong opinions:eclipsee_gold_cup:

Topspinmo
09-04-2023, 04:47 PM
I fine if you got money somebody going to try to steal it? Financial institutions is high in my list.:D

Caymus
09-04-2023, 04:58 PM
I fine if you got money somebody going to try to steal it? Financial institutions is high in my list.:D

Speaking of stealing. I notice that Jim Cramer of CNBC is selling a 3 month "Club" subscription for $79.99.

kkingston57
09-04-2023, 05:01 PM
Thank you, Nostradamus. Or maybe America will wake up and get rid of the tax and spend idiots.

Not going to happen. With gerry mandering all we have is far left and far right politicians.

kkingston57
09-04-2023, 05:05 PM
If you have a ways to go to reach retirement age, I believe a better way is a basket of good no load mutual funds. Compare history with what an annuity is offering.

An old saying is annuities are never bought they are sold.

Also what does this have to do with RMD?

To answer your question, Nothing. RMD is a requirement to pay deferred taxes. Another financial industry created by our lawmakers.

manaboutown
09-04-2023, 05:08 PM
Speaking of stealing. I notice that Jim Cramer of CNBC is selling a 3 month "Club" subscription for $79.99.

The author discusses him in the book. She wrote that as soon as Cramer recommends a stock it briefly rises, say over a day or two. Then it sinks back to where it was or even lower. She suggested it may be a good tactic to short his recommendations during their brief rise. lol.

Stu from NYC
09-04-2023, 06:18 PM
To answer your question, Nothing. RMD is a requirement to pay deferred taxes. Another financial industry created by our lawmakers.

RMD's to people like me who never worked for a company with a pension is awesome.

Boomer
09-14-2023, 08:13 AM
I am loving this book.

Film at 11.

Boomer

retiredguy123
09-14-2023, 08:38 AM
The vast majority is in ETF's and index funds, the balance is in treasuries. From what I read the payout from a qualified annuity also satisfies the RMD for that account.

I have about 8 years to research.:):)
Not sure what you mean by "satisfying an RMD". When you take money from a tax deferred account for the RMD, it is taxable income. As far as I know, the only way to avoid paying income tax is to transfer the money directly from the tax deferred account to a charity.

retiredguy123
09-14-2023, 08:40 AM
Read your contract first or have someone like a lawyer do so.
Or a team of lawyers.

retiredguy123
09-14-2023, 08:41 AM
The book is available as a Kindle book for $12.99.

Toymeister
09-14-2023, 10:04 AM
I give the book a score of three out of ten.

It is dated by eleven years. It covers some of the financial gurus long gone. One was popular in the 1930s and died thirty years ago. It fails to cover the bad advice of some gurus. For example she briefly covers Dave Ramsey but doesn't mention the recommendations that he gives to high load but funds by agents which pay him a referral fee or that 12% annual return touted by Ramsey isn't realistic.

There are better books.

Caymus
09-24-2023, 10:13 AM
I recently finished the audiobook version (free to me). It does contain useful information which is somewhat dated after 10 plus years. I was somewhat amused that she was against almost everybody (even Elmo from Sesame Street). I may have missed the parts where she offered positive actions. That may be due to me using the audio version.

Stu from NYC
09-24-2023, 10:40 AM
I recently finished the audiobook version (free to me). It does contain useful information which is somewhat dated after 10 plus years. I was somewhat amused that she was against almost everybody (even Elmo from Sesame Street������). I may have missed the parts where she offered positive actions. That may be due to me using the audio version.

Does not like Elmo? Wow. Wonder what she thinks of Bert and Ernie?

manaboutown
09-24-2023, 11:15 AM
Does not like Elmo? Wow. Wonder what she thinks of Bert and Ernie?

She does not like prop 13 in California which saved numerous people from losing their homes. She wants it repealed so California can collect even more tax money to burn.

Stu from NYC
09-24-2023, 12:37 PM
She does not like prop 13 in California which saved numerous people from losing their homes. She wants it repealed so California can collect even more tax money to burn.

I will never look at Elmo in the same way ever again

Boomer
09-25-2023, 08:43 AM
. . .

Dusty_Star
09-25-2023, 12:06 PM
I give the book a score of three out of ten.

It is dated by eleven years. It covers some of the financial gurus long gone. One was popular in the 1930s and died thirty years ago. It fails to cover the bad advice of some gurus. For example she briefly covers Dave Ramsey but doesn't mention the recommendations that he gives to high load but funds by agents which pay him a referral fee or that 12% annual return touted by Ramsey isn't realistic.

There are better books.

Do you have recommendations for those better books?

CoachKandSportsguy
09-25-2023, 11:18 PM
Yea keep looking into that, I have never heard that an annuity would satisfy an RMD. Unless your advisor is saying you should hold an annuity in a tax deferred account. If that was the case I would get another advisor.

A qualified Annuity is an annuity inside a qualified account, like TIAACREF's 403(b) annuities, key word qualified. .

However, after cashing out my mom's TIAA annuities, I would stay far away from them. . I actually don't particularly like TIAA/CREF either, with their limited offerings, and one of the two primary offerings being an annuity

but YMMV

Caymus
09-26-2023, 02:27 AM
How? Annuities are taxed as ordinary income, capital gains and dividends are taxed at a much lower rate, between 0 and 20%. So how would an annuity be beneficial when you reach RMD. In fact what does RMD have to do with it at all??

I am considering the pros/cons of a qualified fixed immediate annuity when (or if:jester:) I reach RMD age.

This article from 2017 indicates that it covers the RMD for that portion of the IRA. As I age, I will want more $ in guaranteed income and less in equities.

RMD Tips: When Your IRA Holds an Annuity | Kiplinger (https://www.kiplinger.com/article/retirement/t045-c000-s004-rmd-tips-when-your-ira-holds-an-annuity.html)

Toymeister
09-26-2023, 06:28 AM
Do you have recommendations for those better books?

In general any of the "for dummies" books, such as "Personal finance for Dummies"

"A random walk down wall street", in specific

Let's see if others have sugestions\recommendations.

Stu from NYC
09-26-2023, 07:26 AM
I am considering the pros/cons of a qualified fixed immediate annuity when (or if:jester:) I reach RMD age.

This article from 2017 indicates that it covers the RMD for that portion of the IRA. As I age, I will want more $ in guaranteed income and less in equities.

RMD Tips: When Your IRA Holds an Annuity | Kiplinger (https://www.kiplinger.com/article/retirement/t045-c000-s004-rmd-tips-when-your-ira-holds-an-annuity.html)

My question is why would you even want an annuity in your portfolio. Do not like the idea of losing control of our funds. Look at surrender charges if you need money early.

CoachKandSportsguy
09-26-2023, 03:56 PM
I am considering the pros/cons of a qualified fixed immediate annuity when (or if :jester:) I reach RMD age. This article from 2017 indicates that it covers the RMD for that portion of the IRA. As I age, I will want more $ in guaranteed income and less in equities.



Ok, let's do this!

Single IRA, no other qualified accounts, lets just use round numbers, and decent size ones for effects:

$1,000,000 IRA . .
Spend $600,000 on a fixed immediate annuity, which is excluded from the RMD. .
And then you calculate and distribute the RMD on the remaining $400,000, correct?

The $400,000 can last your lifetime if you don't have any large medical bills, and you aren't frivolous spending your savings during retirement. . but lets say you use the non annuity all up by the time of your death, medical, etc.

Scenario A: you have a $600,000 +/- value remaining in the IRA. . uncertain as to the exact amount based upon annuity details, but its just for discussion. The $600,000 goes to your W, if she is alive, and it continues for your W, tax free.

Scenario B: $600,000 in the IRA and your W has pre-deceased you. . the $600,000 goes to your beneficiaries, say three children, just as an example. They then can't use the annuity as a shelter, and must take the distributions over X amount of time and are paying an increased tax bracket on that income.

Scenario C:
You don't put the $600,000 in the annuity, and money comes out via RMD. Assuming that you don't need the money to live on, as you wouldn't have had the same amount with the annuity, then you pay your taxes and put the money back into investments for zero inheritance tax when distributed to your three children, but depending upon the circumstances, you might pay up to some ungawdly amount for medical insurance, through means testing. not sure of the amount, all depends on a host of items

Scenario D:
You put all the money into the qualified annuity and now only take out the RMD amount to stay below the large increase in medical costs resulting from means testing.. . So you pay the least amount of taxes and the least amount for health insurance, and you keep the most wealth in the IRA (wealth maximization)

the downside is that the 1M gets distributed to your children and they pay taxes and potentially increased health insurance on their distribution at the increased incremental tax rate. . so they don't get tax minimization strategy

So scenario D is you live efficiently, but your beneficiaries may get a huge hit, and even more so if they are retired and on means tested health insurance.. . So the balance point is who and when and how much is the tax hit. The optimizer says to take out more earlier and reinvest it, and then there may be little / no income tax when its used as well as when passed to children with no state estate or inheritance tax and very high limit on federal estate tax. tax minimization strategy (example assumption). You can put it into a ROTH to avoid taxes, but you don't have to if you invest tax efficiently and don't use much of it unless needed for medical expenses.

I am not a tax professional, i am a finance professional who tries to look at the future investments, cash flows and tax impacts of money decisions, and tries to maximize wealth and cash flows through future decision making processes, regardless of what has happened in the past, that would be an accountant's job, dealing with the past.

comments / disagreements welcome

Caymus
09-27-2023, 06:38 AM
Do you have recommendations for those better books?

Her book is mainly a critique of the investment advisor industry (especially the Gurus). I am not aware if equivalent non dated books are available. In the distant past I have read two (now ancient) books: "Where are the Customer's Yachts" and "Reminiscences of a Stock Operator". They cover somewhat different topics.

Or, are you interested in books that cover investment strategies?

manaboutown
09-27-2023, 08:22 AM
Her book is mainly a critique of the investment advisor industry (especially the Gurus). I am not aware if equivalent non dated books are available. In the distant past I have read two (now ancient) books: "Where are the Customer's Yachts" and "Reminiscences of a Stock Operator". They cover somewhat different topics.

Or, are you interested in books that cover investment strategies?

Another book from back in the day is "Confessions of a Stockbroker" by 'Brutus'. John D. Spooner (http://johndspooner.com/books/confessions-of-a-stockbroker/)