[Bobcuse]

I am now in my early 70's and do not want to risk my money anymore in the market. I am looking for an experienced financial consultant/advisor who would review a proposal I have for a combination of fixed annuities (including some with hybrid features) which looks like what I would want to provide security and income without huge fees and severely restricting surrender charges. Obviously I would pay a consultation fee but I need an expert opinion other than the financial advisor who is recommending this plan to help me thoroughly understand the pros and cons of this package. If anyone knows a good person who could do this I would appreciate some names. Thank you.

[l2ridehd]

This does not answer your question, but there is only one person who benefits from an annuity and that is the sales person selling them. You should only consider an annuity if you are so undisciplined with money management that you always go the wrong way, buy high and sell low. Annuities bring no added value to the buyer. Only to the seller.

You say you want to avoid market risk and yet your willing to put everything into a single insurance company? To me that is a major risk. Even if you buy three different ones from three different companies you are still at a very risk position. At least with stocks and bonds you can buy total market funds and be spread across many thousands of companies.

I would strongly suggest you are moving into a much higher risk position. Remember even AIG failed except for a government bail out. Doubt that will happen again.

[dewilson58]

Been a financial person my entire life. Have avoided annuities my entire life. Just my opinion. For stability, I prefer a dividend paying utility. Just my opinion.

[kellyjam]

In your early 70's? I have 4 letters for you C A S H. Capital preservation is the name of the game. Interest rates will rise again and you can get into FDIC insured CD's. My In-Laws are in their late 80's and Vanguard says their portfolio should be 76% stocks and 22% bonds. Ridiculous but true.

[Northstar]

Originally Posted by kellyjam

In your early 70's? I have 4 letters for you C A S H. Capital preservation is the name of the game. Interest rates will rise again and you can get into FDIC insured CD's. My In-Laws are in their late 80's and Vanguard says their portfolio should be 76% stocks and 22% bonds. Ridiculous but true.

I'm a Boglehead, and I would think they would be more like 80% bonds and 20% stocks .

[rjm1cc]

Try calling CPA Firms and ask for someone that is in the financial planning section.

[tommy steam]

Go on line and look for a fee only advisor. You will see there are several in the area. Talk with them and find one who you are comfortable with. They will charge you an hourly rate.

[billethkid]

check with your bank who may have an investment group in their srvices offered. They do not get a commission on what they recommend.

I would suggest asking about fixed income investments which have reasonable returns (3-5%) and less risk than regular stocks.

If your bank does not have a service Wells Fargo does.

btk

[Bobcuse]

Originally Posted by l2ridehd

This does not answer your question, but there is only one person who benefits from an annuity and that is the sales person selling them. You should only consider an annuity if you are so undisciplined with money management that you always go the wrong way, buy high and sell low. Annuities bring no added value to the buyer. Only to the seller.

You say you want to avoid market risk and yet your willing to put everything into a single insurance company? To me that is a major risk. Even if you buy three different ones from three different companies you are still at a very risk position. At least with stocks and bonds you can buy total market funds and be spread across many thousands of companies.

I would strongly suggest you are moving into a much higher risk position. Remember even AIG failed except for a government bail out. Doubt that will happen again.

You are correct; it didn't answer my question. I am considering annuities but I do not consider myself as an undisciplined investor whatsoever. I have had a fee based financial advisor who managed my money for the past 10 years and I have done okay in the market, but I do not want to live with the volatility any longer in today's markets. That's a personal choice.

Regarding your comments about risk in insurance companies, research is always a prerequisite before doing any investing. Baron's had a great article about the top 50 annuities and insuance companies. Federal law requires insurance companies to establish reserves for annuity contracts and those reserves are audited regularly. AIG went bankrupt but those who had annuities with AIG DID NOT LOSE ANYTHING.

I have not decided to go the annuity route but am doing my homework based on facts and professional advice from experts other than the firm who is trying to sell me these products. I am asking for suggestions if anyone has worked with someone local.

[luvmagic2]

I use Ameriprise Financial...big company out of Minneapolis used to be owned by American Express but was sold off. Financial planner is Coert Van Vorhees...352-350-2397...office is in Southern Trace.

[kellyjam]

Originally Posted by Northstar

I'm a Boglehead, and I would think they would be more like 80% bonds and 20% stocks .

You would think they would but they didn't. All hail the Stock Market regardless of age. lol

[rubicon]

kellyjam: I am not challenging your veracity concerning the recommendation from Vanguard for the high stock/low bond split for investors in their 80's. It may have been they dealt with an inexperienced employee; albeit Vanguard management must take the hit. I just do not feel that the entire company should be dismissed because of this one employee.

I pushed for a high stock/ low bond split and my Vanguard rep spent a very long time reminding me that at my age I might want to reconsider. He reminded me that my risk adversity seem to be related to a 21 year old rather than a retired guy....However my goals focus on leaving my nest egg to my kids. Therefore taxes are the main problem for me

Having said that with the Fed's central planning our economy and the continuing qe's and bond buying the bond market is also a perilous undertaking these days.

I also would not invest in an annuity because the trade off between security vis a vis return is skewed to the insurance company favor. Again if it buys peace of mind for an investor well then it may be the investment tool for them

It all comes down to how risk adverse we are as investors


Personal Best Regards:

[paperclip202]

Originally Posted by Bobcuse

I am now in my early 70's and do not want to risk my money anymore in the market. I am looking for an experienced financial consultant/advisor who would review a proposal I have for a combination of fixed annuities (including some with hybrid features) which looks like what I would want to provide security and income without huge fees and severely restricting surrender charges. Obviously I would pay a consultation fee but I need an expert opinion other than the financial advisor who is recommending this plan to help me thoroughly understand the pros and cons of this package. If anyone knows a good person who could do this I would appreciate some names. Thank you.

I just helped a friend analyze his variable annuity with AXA. I was shocked to find out how expensive it is:

Here are the details.
- 7 year surrender charge with a max surrender of 10% first year and declines.
- Typically the longer the surrender charge and higher the % surrender, the more you pay in commissions. Vanguard, USAA and TD Ameritrade have no commission products with no surrender charges. These products can still have expensive fees.
- Outside of the high commissions, the main problem is high fees.
- I strongly suggest that you have your salesperson fully explain all of your yearly fees for an insurance product. Get it in writing in a formal letter and have them sign it! These insurance products are typically very complex and this complexity favors the Insurance company, not you as an investor.
- MENA expense (mortality and administrative) = 1.3% per year
- 6% guaranteed income benefit (GMIB) = .8% per year
- Death benefit (GMDB) = .8% per year
- Underlying investment operating expenses = 1% per year
- Advisor charging a "management fee" = 1.2% per year
Total yearly expenses = 5.1% per year.
It is really hard for your investment to grow if you are paying 5.1% per year in fees! It's still hard to grow your investment if you are paying 2%+ in total fees.

Personally, I think you are better off using low cost mutual funds like Vanguard or Dimensional Funds and having a very conservative allocation so you can sleep at night.

Good luck.

[rjm1cc]

Originally Posted by Bobcuse

I am now in my early 70's and do not want to risk my money anymore in the market. I am looking for an experienced financial consultant/advisor who would review a proposal I have for a combination of fixed annuities (including some with hybrid features) which looks like what I would want to provide security and income without huge fees and severely restricting surrender charges. Obviously I would pay a consultation fee but I need an expert opinion other than the financial advisor who is recommending this plan to help me thoroughly understand the pros and cons of this package. If anyone knows a good person who could do this I would appreciate some names. Thank you.

This maybe of interest. The author does research so searching his work may help.

Lifetime Expected Income Breakeven Comparison between SPIAs and Managed Portfolios by Larry R. Frank, John B. Mitchell, Wade D. Pfau :: SSRN
Lifetime Expected Income Breakeven Comparison between SPIAs and Managed Portfolios

[RayinPenn]

Sounds to me that you are looking for something that doesn't exist - a risk free paying investment.

Your government has been printing money at an unprecedented pace and kept interest rates incredibly low. ... Many believe an inflation tidal wave is on the horizon; I cant guarantee anything buy I can tell you my pool of dividend paying stocks has not disappointed.

I don't worry about the daily ups and downs I just invest and let time do its magic. The problem isn't the stock market - the problem is you are fretting about silly ups and downs. You have seen many over the years the one thing they have in common is they pass.