A High Income Strategy for a Retirement Portfolio
- Thread starter jodistrict
- Start date
Been involved in VAs for 20 years and never heard of this. Who has such a product and guarantee?
If you are looking for 6%, then there are also some other things you can consider. But always talk to a professional in the field of your choice before taking the leap of faith...
Don't forget about taxliens, franchising, investing in business of your local community, lending money backed up with security items like art, oldtimers, gold, and so on. You will sleep beter and be more assured that you will get your returns, then investing in paper assets alone...
Don't forget about taxliens, franchising, investing in business of your local community, lending money backed up with security items like art, oldtimers, gold, and so on. You will sleep beter and be more assured that you will get your returns, then investing in paper assets alone...
ING, Manulife, American Skandia, Metlife, Pac Life, etc. Until a year ago, Pac Life offered one with 10% guaranteed for 10 years.
Google GRIB (Guaranteed Retirement Income Benefit) and GRIP (Guaranteed Retirement Income Program). Generally you'll find that the best contracts offered a minimum 5% return. If the sub account performance is higher, you lock in the higher number with annual step ups (some offer quarterly).
These products are always changing so I am not up on current GRIBs and GRIPs. But over the years I've been in VA's that offered 5, 6, 7 and the aforementioned 10%. I even rolled one into a 3% 1 year CD in Jan '08 to get out of the way of the GFC.
Forgive any errors in terminology since I'm not in the business.
A read over a few Google listings... looks like they're talking about "life only" annuity rates. That is, your income is guaranteed for "life", but if you die after the first payment, that's it. Not the same as "10% guaranteed return"..
Considering the yield on bonds, I doubt it's possible for any insurance company to "guarantee" anywhere near 10% return.
There are lots of misconceptions out there right now as all retiree's are searching for income. The new variable annuities "guarantee" you lifetime "withdrawals" of 7% annually not annuitizing (which is what your referring to) The withdrawals come out of your investment account of mutual funds. The guarantee 7% growth is for "income purposes only". Which means no matter what your investments do your guaranteed withdrawal amount will increase by 7% a year (as long as you don't take withdrawals). Let's say you put in 100k and wait 10 years then regardless of the investment performance you will be able to take 14k a year for life. Should you die 1 year after taking withdrawals then your beneficiaries will receive the value of your investments minus 14k. In the old days when you annuitized your beneficiaries would receive 0.
Btw the 10% is calculated as simple interest... Not compounded. So they double your money "for income purposes only"
annuities are a scam. i have a friend who has a 6% guaranteed for life annuity through morgan stanley. the problem is they nickle and dime you. after fees,insurance ect his net is 3%. not so hot.
another point annuities are only as secure as the company selling them. they are not guaranteed like fdic. lehman had a lot of guaranteed products out. how are they doing now?
Well I can't comment of the product your referring to but it sounds like you and your friend don't or didn't understand what he bought. insurance is not only guaranteed by the company but by the state's guarantee fund which all insurers pay into. Never had an annuity company default on their products (yet). They just get sold to another company.
i understand it just fine. they use deceptive advertising to suck in customers who are looking for security and they nickle and dime them with fees while allowing no escape. he bought it against my advice.