Page 23 of 23

Re: The Reason to Quit PP

Posted: Tue Nov 03, 2015 4:16 pm
by Cortopassi
Most people would kill for that $ income in retirement, even without SS or pulling from the PP!  Good for you!

Re: The Reason to Quit PP

Posted: Tue Nov 03, 2015 5:12 pm
by Fred
portart wrote: and SS that will pay 31k a month in two years.
Damn, that's a hell of an SS check. You must have won the SS lottery.  I'm sure you meant either 31k /year, or 3.1k/month.

Re: The Reason to Quit PP

Posted: Sun Nov 15, 2015 7:29 pm
by I Shrugged
portart,

Do you have any concerns about the long term solvency of the annuity company?  In today's environment, that keeps me from considering them.  Although supposedly the math for the company is more about life expectancy than returns.  Sure, sure...

Re: The Reason to Quit PP

Posted: Mon Nov 16, 2015 3:11 am
by mathjak107
most states back them up in one form or another . most  states also require that in order to sell insurance that if asked to take over the client base of an unhealthy company that you do so .

if we didn't see one issue in 2008  i think there are a whole lot of other worrys you can dwell on then losing your money with an insurer .

in fact my health insurer went belly up this month and no problems accept scrambling to find a new one in two weeks time .

we were not even responsible for any bills not paid.

Re: The Reason to Quit PP

Posted: Mon Nov 16, 2015 6:34 am
by barrett
mathjak107 wrote: most states back them up in one form or another . most  states also require that in order to sell insurance that if asked to take over the client base of an unhealthy company that you do so .

if we didn't see one issue in 2008  i think there are a whole lot of other worrys you can dwell on then losing your money with an insurer .

in fact my health insurer went belly up this month and no problems accept scrambling to find a new one in two weeks time .

we were not even responsible for any bills not paid.
I love the idea of a monthly check for life, but "most states" are in bad financial shape. A state guarantee wouldn't really make me feel all that safe. It's not guaranteed that the federal government steps if the states fail to make annuity payments, is it?

MJ, I know you feel that a lot of us posters on here are just too pessimistic, but I really do wonder about how safe annuities are over the long run.

I really am thinking about supplemental income via an annuity for the bridge years until taking SS at 70. It's just that when assessing risk, it seems relatively easy to know what the knowns are in the short term. It's the mid to long term that I would be concerned about. So I don't see annuity mayhem on the horizon for the next couple of years, but I am less clear what things could look like even five to ten years from now.

Re: The Reason to Quit PP

Posted: Mon Nov 16, 2015 6:40 am
by mathjak107
the short term annuity's that are used as  bridge  products carry nooooo mortality credits like lifetime annuity's which sweeten the deal .

there really is little reason to use an annuity for those short term needs vs  cd's .  they pay so little difference .

it is the lifetime annuity's where the big difference makes them worth it . those who die pay for those who live so the rewards are greater .  you get to diversify into dead body's , something you can't invest in , when investing on your you own . you do not get those credits with the short term bridge stuff .

you can diversify and ladder lifetime annuity products using several company's .

if you think anything so bad is going to wipe out all annuity company's then perhaps you shouldn't be investing at all since you have a lot more to worry about in that scenario than an annuity .

even 2008 couldn't make an annuity fail  and i had a money market go bust and break the buck and lost money .. so if an insurer going belly up is a worry like i said you got more to worry about then that .

aig's problems were separate from their insurance end  and did not effect them at all ..

the best annuity ever is just delaying social security .

you can't buy any annuity anywhere for the cost of  the checks you would give up between 62 and 70 .

unless you maximized social security first taking any other annuity may be shooting yourself in the foot value wise .

there is no cola adjusted annuity with survivor benefits you can find that will equal just delaying ss and the associated costs .


the biggest bang for the buck would likely be delaying ss to 70  then at 70 start to ladder spia's .


you can  fund the 8 years of spending  money with  any typical  way you would invest with one caveat .

a little bucket system works well  using cash buckets , bond buckets and an equity bucket  refilling cash in order of the buckets .

i would refrain from using the pp for this role .

in an extended downturn you would  first  spend down  the cash bucket , then  if the down turn continued  , next would be the bond bucket ,then finally some equity's if needed  refilling cash .

you would not want your bonds to be as volatile or even more volatile then your stocks that you are trying not to spend down at a bad time  and have to sell  those volatile bonds at a poor time to raise more cash . a mix of short to intermediate term bonds work just fine and are much less rate sensitive  for this purpose .

this bridge portfolio should be separate from your main investing portfolio just because of the restricted time frames on some of the assets .

don't forget once you spend  down the cash in the pp you need to rebalance possibly selling other assets when all are down to make up more cash .

could be a big difference in how much a mix of short and intermediate term bonds are down if rates rise vs long term treasury's in the short term . .

as always this is my opinion .

Re: The Reason to Quit PP

Posted: Mon Nov 16, 2015 11:53 am
by I Shrugged
Long term ZIRP is arguably more toxic to insurance companies than would be a market crash.

Re: The Reason to Quit PP

Posted: Mon Nov 16, 2015 1:18 pm
by mathjak107
annuity's count on dead body's mostly . they are not rate sensitive  unless they commit suicide because of them .

Re: The Reason to Quit PP

Posted: Wed Jan 22, 2020 10:12 pm
by vnatale
mathjak107 wrote:
Mon Nov 16, 2015 6:40 am
the short term annuity's that are used as  bridge  products carry nooooo mortality credits like lifetime annuity's which sweeten the deal .

there really is little reason to use an annuity for those short term needs vs  cd's .  they pay so little difference .

it is the lifetime annuity's where the big difference makes them worth it . those who die pay for those who live so the rewards are greater .  you get to diversify into dead body's , something you can't invest in , when investing on your you own . you do not get those credits with the short term bridge stuff .

you can diversify and ladder lifetime annuity products using several company's .

if you think anything so bad is going to wipe out all annuity company's then perhaps you shouldn't be investing at all since you have a lot more to worry about in that scenario than an annuity .

even 2008 couldn't make an annuity fail  and i had a money market go bust and break the buck and lost money .. so if an insurer going belly up is a worry like i said you got more to worry about then that .

aig's problems were separate from their insurance end  and did not effect them at all ..

the best annuity ever is just delaying social security .

you can't buy any annuity anywhere for the cost of  the checks you would give up between 62 and 70 .

unless you maximized social security first taking any other annuity may be shooting yourself in the foot value wise .

there is no cola adjusted annuity with survivor benefits you can find that will equal just delaying ss and the associated costs .


the biggest bang for the buck would likely be delaying ss to 70  then at 70 start to ladder spia's .


you can  fund the 8 years of spending  money with  any typical  way you would invest with one caveat .

a little bucket system works well  using cash buckets , bond buckets and an equity bucket  refilling cash in order of the buckets .

i would refrain from using the pp for this role .

in an extended downturn you would  first  spend down  the cash bucket , then  if the down turn continued  , next would be the bond bucket ,then finally some equity's if needed  refilling cash .

you would not want your bonds to be as volatile or even more volatile then your stocks that you are trying not to spend down at a bad time  and have to sell  those volatile bonds at a poor time to raise more cash . a mix of short to intermediate term bonds work just fine and are much less rate sensitive  for this purpose .

this bridge portfolio should be separate from your main investing portfolio just because of the restricted time frames on some of the assets .

don't forget once you spend  down the cash in the pp you need to rebalance possibly selling other assets when all are down to make up more cash .

could be a big difference in how much a mix of short and intermediate term bonds are down if rates rise vs long term treasury's in the short term . .

as always this is my opinion .
Now that you are so much closer to 70 is this STILL your plan?

"at 70 start to ladder spia's"

Vinny

Re: The Reason to Quit PP

Posted: Thu Jan 23, 2020 3:42 am
by mathjak107
actually , interesting question ....

first off , for someone who wants to buy an annuity i would never recommend you buy an annuity product without first delaying ss since there is no annuity product available that pays as much , is cola adjusted or passes to a spouse .

having said that , at this point i have no interest in buying an annuity .

i delayed ss to 65 and not 70 even though i retired at 61 . ...

two reasons .

reason 1- my wife could not get her spousal adder of 4500 a year added to her benefit until i filed . that spousal adder , plus all the checks we were not getting for me , plus the fact we were spending down invested assets or money that could be invested if we took ss , break even was more than 22 years out and the odds favored our investments in a balanced portfolio doing better than the longevity odds of waiting until one in a couple sees 90 to equal the same average return .

so delaying vs taking it early are just simply do you want more market and interest rate risk or more longevity risk. they both can come out the same potentially .

there is a lot you are giving up when you delay to 70 if you are investing or could invest the money you are living on .

despite intentions to delay longer , when you are spending your money down in a big bull market and mr ss check is banging on the door going take me , mentally it is hard to say no .

reason two is that i still work one day a week teaching my craft which is industrial motor controls and variable frequency drives and until i was 65 i made to much to file earlier .

there are special income caps for the year you will be full retirement age that allow you 3x the income so at 65 i could file and give nothing back.

but i still think delaying ss to 70 and then laddering spias is the way to do it , if someone wants an annuity product .

at this point in time we did well enough that my wife is comfortable with our finances as they stand