[Packer Fan]

Originally Posted by Stu from NYC

Some weeks ago we attended a dinner seminar they put on. They spent the entire hour pushing this.

They made claims that I found unbelievable and when I asked questions he never did answer me.

I would never buy an annuity. There is an old saying, annuities are sold and never purchased.

That qoute comes from AUM advisors who collect 1% of your assets every year and is NOT true. I have never been to a presentation and have bought 2 annuities with income riders as part of my retirement income planning. Last year they were by far the best performing asset I had. Of
Course if you have an advisor and he collects $10,000 out of your account that is SUCH a reasonable commission. You should research and know what you are talking about
Before giving advice
On the internet, but most
People don’t.

[Packer Fan]

OP - as I suspected when I read your post, you got several pages of answers uneducated responses from people who don’t even know
There are MANY different types of annuities and most of the people who answered don’t know the difference between a SPIA, DIA, and a MYGA. I would suggest reading Wade Pfau’s retirement planning guidebook. Also, if you want to actually understand annuities watch Stan the annuity man on YouTube and you will learn a lot. I would not buy an annuity at a chicken dinner. All that being said, the main benefit of most annuities is lifetime income, not filling in a 5 year gap when you retire. Filling in that gap is best done with CDs or bonds. If you want more lifetime income, then look at a SPIA, DIA, or a FIA with a lifetime income rider. I will say I bought a MYGA ladder for 4,5,6,7, and 8 years 3 months ago and locked in 5.4% compound interest for that time period when I could not get 5% from CDs but I am not retiring for a few more years.

[Joe C.]

IMHO ..... give a call to Blackston Financial (they are on Rt. 466 not far from the Morse Blvd. gate) and ask for Travis. He is one of their fiduciary people. I've done well by him for the last six years.

[maistocars]

I have to laugh that there is an ad at the bottom of this page 1 for an 8.5% annuity - very timely to say the least.

[Mlundberg]

My spouse was a senior vice president of a financial firm. She quit her job because she could not live with herself because of the high fees, surrender charges, and unethical behavior of her firm selling annuities.

Buyer be aware. Do not get sucked into the hype.

[manaboutown]

Doesn't Wade Pfau also pitch reverse mortgages?

[Fltpkr]

Originally Posted by retiredguy123

I wouldn't. It is a life insurance contract. Fixed index annuities have high fees and surrender charges. You can achieve better returns by investing the money yourself in a diversified portfolio of stock and bond index funds. I would suggest Vanguard Investments or Fidelity Investments.

I would suggest that you ask the company to send you a copy of the "entire" annuity contract so you can review it before you sign it. They will probably refuse to send it to you.

Post your question to the Bogleheads Forum for additional views from some pretty savvy folks. They tend to be fans of Vanguard, but you will definitely get additional input, which is good before making such a financial decision.

[Lottoguy]

If you need immediate income then go with a immediate annunity. Mass Mutual is highest rated.

[Boomer]

Originally Posted by Mazjaz

My wife just retired and won’t take Social Security for 5 years. I am considering replacing her income with a Fixed Indexed Annuity with West Financial Group. Has anyone used them or have a fixed indexed annuity they would recommend for immediate income? I am 66.

I have always been very careful around those guys who want to buy you dinner first.........

That being said, I get that you want to fill in the income gap between your wife's retirement and her Social Security. Depending on how much income you need to generate, there is a chance that maybe it could be done with solid dividend paying stocks. By solid, I mean that their dividend is highly likely to remain sustainable, and not only that, but the dividend has a long history of increasing annually.

For a start, you could look up Dividend Aristocrats and Dividend Kings. The Aristocrats have increased their dividend annually for at least 25 consecutive years. The Kings have a record of at least 50 consecutive years of dividend increases.

You will recognize a lot of the companies on these lists. Very few of them will take you on a rocket ride, but if you can pick them up at a good price, you might find that holding them can give you a steady stream of income (with annual raises) while the stock price goes up and down -- but the whole time, the stock is paying you to wait. The percentage of the dividend increase will depend on how the year has gone, but these companies do not want to lose their status as dividend stocks, so you will probably always get some kind of raise. And hold them long enough and the stock price will likely go up a bunch. (Of course, any company, no matter how big and supposedly solid, can end up cutting the dividend. GE is an example of what can happen.)

You would need to understand things like payout ratio and ex div dates, and date of record -- but that's not hard. Of course, you must keep an eye on the companies, all by yourself. Some people think that is fun. (Such people are often considered freaks if they are women of a certain age. (sigh))

Bigger is not always better with dividends, but if you can catch a good stock that has been pounded some, that can be a really good thing to do. The other thing to keep in mind is as the dividend increases, the percentage of your initial investment starts looking like an even better return.

But making up one's own "mutual" fund is not for everybody. There are lots of mutual funds and ETFs that will do it for you.

(Reinvesting dividends can be a good thing to do, if income is not needed. That is what Warren Buffett does with Berk.)

Another bonus of being a boring, old-fashioned, buy-and-hold, dividend investor is that in taxable accounts, dividend income gets friendlier treatment.

This is not for everybody. It is creating your own little stock fund, over which you have total control and pay no fees. This means you are responsible for all the decisions to buy or sell and not just if, but when. Some people do not like that. But they do like buying into a big fund, so they do that. And some do both.

This might not be for you, but I do have a suggestion that could help. There is a half-hour show called WealthTrack with Conseulo Mack. Each week on PBS, she interviews a big deal financial person. (I record the show and then decide if I am interested in the topic.) But it is also on the internet.

Give wealthtrack.com a Google, scroll, and find the April 7th interview with Christine Benz, who is the Director of Personal Finance for Morningstar. The title of the episode is "Retirement Blind Spots and How to Fix Them." (It is Part 2 of 2. I did not watch the first one yet. But that could help you, too.) She quickly mentions annuities and does not totally slam them -- but does not seem to be a fan of them either. You will find lots of good info in the interview.

There is a lot to know about annuities. I think they are too complicated and seem to grow surprising arms and legs. But some annuities seem to work for some people.

Don't leap too soon. Do a little homework. Find your options. You might be really glad you decided against an annuity.

One more thing: Take a good look at CDs, FDIC-insured and call protected, available through Fidelity and other big houses. They are paying over 5% now for the first time in many years.

Do your homework -- and Good Luck.

Boomer

[Rwirish]

This does not produce a guaranteed income stream and can be subject to significant market declines. Many financial advisors will suggest some “safe” funds be allocated to an annuity product.

[Eg_cruz]

Originally Posted by Joe C.

IMHO ..... give a call to Blackston Financial (they are on Rt. 466 not far from the Morse Blvd. gate) and ask for Travis. He is one of their fiduciary people. I've done well by him for the last six years.

I would ran from them, caught them in lies

[manaboutown]

Originally Posted by Rwirish

This does not produce a guaranteed income stream and can be subject to significant market declines. Many financial advisors will suggest some “safe” funds be allocated to an annuity product.

Especially those making fat commissions on annuity products.

[Stu from NYC]

Originally Posted by manaboutown

Especially those making fat commissions on annuity products.

And they are structured so you cannot get out of them to quickly giving the rep larger commissions.

[lindaelane]

I found Mr. West to be poorly informed. For instance, he told me to "sell in May and go away" - that old, disproven chestnut.

Do not buy a financial product from the first person you talk to.

If you need 5 years worth of income, why are you looking at a fixed index annuity? You can get a single premium immediate annuity that pays for five years and returns your principle. It is a "sure thing". CDs and money markets will see their income go down as interest rates decrease - a 5 year CD won't pay what a 5-year annuity will.

Anyway, that is just a taste. There is a lot to learn about annuities before you purchase one. Please speak with multiple financial advisors and make sure anyone you speak with is a fiduciary. If they are not a fiduciary, run - they are not obligated to act in your best interest, and instead can do whatever makes them the most money - if they are not a fiduciary.

[Stu from NYC]

Originally Posted by lindaelane

I found Mr. West to be poorly informed. For instance, he told me to "sell in May and go away" - that old, disproven chestnut.

Do not buy a financial product from the first person you talk to.

West Financial is very informed. They just tell you what is best for them. He told us to avoid the stock market and go into annuities.

His motto was basically Stock market leads to losses while annuities makes money

Even told us Warren Buffet is a fan of annuities