[Jim1mack]

We bought an Annunity when we retired at age 60. Liked the perpetual guaranteed income that would continue till we expire. We now can take the remaining amount without penalty and add it to our brokerage account. Was tallying the dividends earned in that account which are reinvested. Saw that adding the Annunity amount to those holdings would result in dividends that more than replace the Annunity payments if I took them instead of reinvesting them. Principle would be untouched along with those holdings appreciating long term.

Opinions? What may I be missing?

[JRcorvette]

Your money is safe in an annuity but not so in the Stock Market. Can you afford to suffer a large loss if things go south in the Maret?

[rjm1cc]

Sounds good. Be sure of the income taxes you might incur on cashing in the annuity.
I assume you are picking individual co's and not an ETF index. Thus their ability to pay the dividend has to be watched but the ups and downs in the stock price will not matter and your hires will inherit the stock.

[manaboutown]

The stock market is currently very highly priced so many feel now is far from an optimal time in which to jump in with both feet.

This is evidenced by the Shiller PE ratio which is at 37.27 today - Cringe!!!: Shiller PE Ratio - Multpl

Buffett has been selling huge amounts of AAPL and BAC to lock in capital gains. He has been a net seller of stocks and has built up an enormous cash reserve. This may in part be motivated by looming future tax increases on C corporations. Inflation has been horrible over the last 3+ years as anyone who shops for groceries, purchases gasoline and such will verify. We have been experiencing the worst inflationary period since the late 1970s -No one can predict if, when and how it will end. United States Inflation Rate

I wish I could offer a solution but I have none. All I can say is I have built up my cash reserves to the highest percentage of investable assets they have ever been. I am mostly in T bills but also some AMT free munis.

[Rainger99]

Originally Posted by JRcorvette

Your money is safe in an annuity but not so in the Stock Market. Can you afford to suffer a large loss if things go south in the Maret?

I don’t think it is if they go south. I think it is when they go south!

[Jim1mack]

Nothing more than I already know or have experienced.

[Cuervo]

Since you are retired the goal is to find the safest place to protect the principle.
There is nothing that is 100% safe, but annuities are a fairly good parking space.
You seem to know what you're doing and hopefully you did all your homework.
I'm also in the same position and the first thing I did was tally all my yearly expenses and deducted that from my net income after taxes. Once I realized that I could live comfortably on what the annuity was bringing in whatever was not tied up in the annuity I felt was safe to invest in the stock market.
Each person has to determine what is best for them, just do your homework.

[rsmurano]

If you bought an annuity you already suffered a hit probably close to 10%, so if they let you out, assuming there are no more fees attached, you already paid the fees.
Annuity is the WORSE financial move anybody could make. Most people buy annuities because they don’t know how to invest in the stock market, and when the piranhas hear this, they offer you peanuts in guaranteed withdrawals but hide all the high fees and people think this is heaven.

Don’t let people fool you, we were in a recession 2.5 years ago by the technical standards, and the worst economy and inflation in 40 years, 2.5 years ago and It’s still not good today. Why do you think big investors are selling. 1/2 my holdings are still in money market making over 5%, while the other 1/2 is making a minimum of 35% to 70% with very very low risk and 3% dividends. If I thought the economy was doing great, 100% of my money would be in stocks/funds.

[RoboVil]

Originally Posted by Jim1mack

We bought an Annunity when we retired at age 60. Liked the perpetual guaranteed income that would continue till we expire. We now can take the remaining amount without penalty and add it to our brokerage account. Was tallying the dividends earned in that account which are reinvested. Saw that adding the Annunity amount to those holdings would result in dividends that more than replace the Annunity payments if I took them instead of reinvesting them. Principle would be untouched along with those holdings appreciating long term.

Opinions? What may I be missing?

May want to have some cash in a safe place. Dividend paying stocks will be the safest if there is a drop in the market. The "Buffett Indicator" of market value indicates the market is overvalued and will pull back at some point, probably sooner than later. I would have at least 50% of my investments in cash or similar at this time. Search "Buffett Indicator"

[Rainger99]

Originally Posted by rsmurano

The other 1/2 is making a minimum of 35% to 70% with very very low risk and 3% dividends.

Can you provide some more details on where you are making a minimum of 35 to 70% with very very low risk?

[Desiderata]

Originally Posted by rsmurano

If you bought an annuity you already suffered a hit probably close to 10%, so if they let you out, assuming there are no more fees attached, you already paid the fees.
Annuity is the WORSE financial move anybody could make. Most people buy annuities because they don’t know how to invest in the stock market, and when the piranhas hear this, they offer you peanuts in guaranteed withdrawals but hide all the high fees and people think this is heaven.

Don’t let people fool you, we were in a recession 2.5 years ago by the technical standards, and the worst economy and inflation in 40 years, 2.5 years ago and It’s still not good today. Why do you think big investors are selling. 1/2 my holdings are still in money market making over 5%, while the other 1/2 is making a minimum of 35% to 70% with very very low risk and 3% dividends. If I thought the economy was doing great, 100% of my money would be in stocks/funds.

Please share what you are investing in outside of your money market accounts. Those returns, dividends and level of safety sound very impressive.

[Windguy]

Originally Posted by JRcorvette

Your money is safe in an annuity but not so in the Stock Market. Can you afford to suffer a large loss if things go south in the Maret?

There are two ways to look at risk. There is the risk associated with market volatility and the risk of not having enough to fund your retirement. What I’ve heard is that money you don’t need for 10 years should be invested in the market such that you have enough time to weather a storm. If you invest everything in secure assets, you won’t be able to keep up with inflation.

[Steve]

Originally Posted by Jim1mack

We bought an Annunity when we retired at age 60. Liked the perpetual guaranteed income that would continue till we expire. We now can take the remaining amount without penalty and add it to our brokerage account. Was tallying the dividends earned in that account which are reinvested. Saw that adding the Annunity amount to those holdings would result in dividends that more than replace the Annunity payments if I took them instead of reinvesting them. Principle would be untouched along with those holdings appreciating long term.

Opinions? What may I be missing?

You're missing the fact that it's "annuity", not "annunity".

[retiredguy123]

Originally Posted by Steve

You're missing the fact that it's "annuity", not "annunity".

It's also principal, not principle.

[Robbb]

Originally Posted by rsmurano

If you bought an annuity you already suffered a hit probably close to 10%, so if they let you out, assuming there are no more fees attached, you already paid the fees.
Annuity is the WORSE financial move anybody could make. Most people buy annuities because they don’t know how to invest in the stock market, and when the piranhas hear this, they offer you peanuts in guaranteed withdrawals but hide all the high fees and people think this is heaven.

Don’t let people fool you, we were in a recession 2.5 years ago by the technical standards, and the worst economy and inflation in 40 years, 2.5 years ago and It’s still not good today. Why do you think big investors are selling. 1/2 my holdings are still in money market making over 5%, while the other 1/2 is making a minimum of 35% to 70% with very very low risk and 3% dividends. If I thought the economy was doing great, 100% of my money would be in stocks/funds.

Where are you getting 35 to 70% returns on a very low risk investment?