Selling annuities?

[RunTrade]

Quote from vhehn:

...but for the vast majority of people should avoid them.

curious to your reasoning.


My prediction is since the baby-boomer group is about to enter retirement that there will be a larger marketplace for these types of vehicles. I agree to what I the reasoning of "you would be better off buying T-bills, bonds, or whatnot", but the vast majority of people (especially those entering and in retirement) do not have the know-how to do such things and/or would prefer a fixed monthly income-stream (tax deferred) for the rest of their lives.

IMO i think that annuities will be more demanded when the B.B. retire....especially with the conercens of an unsustainable social security(which I believe will be in the news frequently in the near future)

 

[dac8555]

i used to be a retail broker at a big firm. I sold them...awsome commissions becuse they are an insurance product. I got like $7k of a 100k annuity one time. I know a broker that grossed over 700k (about $350 take home) per year on some jackson life annuity. Look, if you want to make money and really be in control of your future...sell. I still sell, only my clients are huge banks and broker.dealers...much more preferable to cold calling, seminars or knocking on doors.

dont be a shiester...tell the truth, be a good person, divulge the risks and it is fine. YOu have to call 100 people per day, make 25 contacts, and set appointments with about 5 per day in order to make 200k+. there is lots of competition. it is VERY hard your first couple of years, but you get to know lots more people than being in front of a monitor all day. just like trading, the hardest part is mental.

If you sell anuities, focus on that..and nothing else.

There is lots of money out there...go get it.

 

[birdman]

It's 6 years later in this thread - does anyone have additional insight into "Annuities" in mid 2011 or is it pretty much the same?

I have an appointment with Edward Jones to consider buying annuities.

 

[Scataphagos]

Quote from birdman:

It's 6 years later in this thread - does anyone have additional insight into "Annuities" in mid 2011 or is it pretty much the same?

I have an appointment with Edward Jones to consider buying annuities.

Are you looking to defer income for several/many years or looking to buy an income stream today?

 

[birdman]

Quote from Scataphagos:

Are you looking to defer income for several/many years or looking to buy an income stream today?

Defer to 5 years out minimum when i will turn 60.

I have a handful of employees and will leave someone in charge when i retire, so i will probably always have more coming in than i need, just thinking about something to do with excess that draws about 1.25% at the banks.

 

[Scataphagos]

Quote from birdman:

Defer to 5 years out minimum when i will turn 60.

I have a handful of employees and will leave someone in charge when i retire, so i will probably always have more coming in than i need, just thinking about something to do with excess that draws about 1.25% at the banks.

During the investment period, the traditional ways the insurance company makes money (while giving you a base guaranteed return) is in some form of bonds. Bond yields are low right now, so hard to get a good return.

Also there are "variable" annuities which invest in stocks and bonds mostly, but their principle is variable too... that is, can decline in value.

Coupled with significantly high annuity fees, loads, and CDSCs usually, you'll be hard-pressed to net a satisfactory return without taking the risk of the stock market in a variable portfolio.

In other words... annuities generally are not all that good of a deal for YOU, regardless of the salesman's shine.

About 20 years ago, I was involved with Nationwide's Variable Annuity... basically, a family of mutual funds with an annuity wrapper for tax deferral. I was one of the early "market timers" in mutual funds... but by about 2000, the fund managers got tired of timers like me moving the money around... and so we all got banned in one form or another from making exchanges for clients. The sub-funds decided they wanted only B&H investors after all.

 

[birdman]

Thanks for your comments and insight, they were helpful. It's always good to get more than one view.

Thanks again,
birdman

 

[trader29]

Birdman,

checkout this weeks cover story on www.Barrons.com

 

[yobo]

With today's market environment, variable annuities are actually an interesting alternatives to bonds. There are products out there that pay a guaranteed 6% income yeild off your initial investment with 10% income raises every year if you hold the annuity for ten years.

You can therefore take advantage of the low equity prices with a balanced portfolio and have upside on your portfolio and potential income at retirement.

For example, you buy a $500,000 VA with a 6% income guarantee at purchase and invest the money in a 70/30 equity/fixed income split. In ten years, you are guaranteed a 10% rise annually on your 6% plus have additional upside if the portfolio increases in value. If the portfolio declines, it doesn't matter because your income is still guaranteed and if you have step up values, you can catch the rises in portfolio values during volitle up and down markets.

Try buying a bond with a 6% yeild that guarantees 10% upside each year. Plus unlimited upside if the portfolio increases in value. Current yeild on a ten year T-bond is less than 3% today. Makes you think doesn't it?

I'm not advocating putting all your eggs in one basket, but to have it be a piece of your retirement plan in order to guarantee income when you retire, makes a lot of sense. At least I think so.

Risk and volitility is free but guarantees cost money. Just my two cents.

 

[Scataphagos]

Quote from yobo:

With today's market environment, variable annuities are actually an interesting alternatives to bonds. There are products out there that pay a guaranteed 6% income yeild off your initial investment with 10% income raises every year if you hold the annuity for ten years.

You can therefore take advantage of the low equity prices with a balanced portfolio and have upside on your portfolio and potential income at retirement.

For example, you buy a $500,000 VA with a 6% income guarantee at purchase and invest the money in a 70/30 equity/fixed income split. In ten years, you are guaranteed a 10% rise annually on your 6% plus have additional upside if the portfolio increases in value. If the portfolio declines, it doesn't matter because your income is still guaranteed and if you have step up values, you can catch the rises in portfolio values during volitle up and down markets.

Try buying a bond with a 6% yeild that guarantees 10% upside each year. Plus unlimited upside if the portfolio increases in value. Current yeild on a ten year T-bond is less than 3% today. Makes you think doesn't it?

I'm not advocating putting all your eggs in one basket, but to have it be a piece of your retirement plan in order to guarantee income when you retire, makes a lot of sense. At least I think so.

Risk and volitility is free but guarantees cost money. Just my two cents.

Sounds like a "lot of guarantee" under current market conditions which seem unable to support. Sort of a "too good to be true" situation.

Insurance companies are normally very conservative... promising/guaranteeing significantly less than they're confident they can make.

Makes you wonder... if their guarantees are so high, How desperate/aggressive are they about acquiring capital and what are they doing with the money? What risk does that pose to the annuity investor? (Any guarantee is only as good as the company behind it.)

Years ago, some company offered a 14% guarantee interest rate for 1 year on an annuity... Sounded GREAT. Many of us jumped on it to sell to our customers.

After the 1 year, the company didn't honor cash redemptions. Everybody eventually got their money out after about a year delay and the intervention of the insurance commissioner's office.

.02