Cortopassi wrote: ↑Fri Sep 23, 2022 7:55 pm
They pay you back a ratio of interest and your principal.
Two main things I like about them:
1) Nearly risk free. Get from an A+ or better insurer (like New York Life, Mutual of Omaha, etc)
2) They pay for life + joint spouse life + cash refund and many other varieties.
Vinny, look at: https://www.immediateannuities.com/ for immediate ballpark quotes.
Just like the PP -- I am not necessarily looking for growth. As I near retirement, I am looking for safety, and money that won't run out, and not subject to the vagaries of the market.
I'd feel much more comfort at, say, 80, with a few checks coming in per month vs. biting my nails because the latest Fed chairperson has just raised interest rates and tanked the market, for example.
Does this apply? https://tonyisola.com/2015/12/annuities ... %20annuity.
I would never consider A+ insurers to be nearly risk free. Far from being as risk free as U.S. Treasuries, which would collapse far later than would issues by A+ insurers.
You ARE investing in a form of bond by those insurers. When you buy a bond from a company you relying solely on their continuing credit-worthiness to get what they promise you. Same as an annuity issued by an insurer. Is there really any differnce?
Also, see this (written my one of my personal financial Mount Rushmore people - William Bernstein):
https://blog.betterfinancialeducation.c ... long-term/
"The first booklet, “The Ages of the Investor,” looks at the sequence of market returns.
– There are two different kinds of risk: 1) Savings Sequence Risk
– The sequence of returns does matter when investing periodically and does NOT matter with lump sums when invested. “That is, with a lump sum, a particularly good or bad sequence of returns will not affect your final result one bit.”
– Younger savers want volatility to get more exposure to buy low opportunities.
– Second kind of savings risk: 2) Very Low Equity Returns
– Mitigated by periodic investing
-Thus … challenge is to recognize (prediction isn’t possible) when situation changes from the first (normal) to the second kind (bad state of the world)
– Fear of the second kind of risk tends to make annuities popular for retirees. However, these come with “four large disadvantages: 1) Do not allow for emergency withdrawals, 2) have to give up ownership, 3) profit needs reduces payouts; profit needs help avoid, don’t prevent 4) insurance companies may not survive the very same systemic crisis that leads to annuity popularity (and state guarantee funds may be inadequate in the same situation as well due to low returns)."