I am beginning to wonder about advice against annunities, because this is the second time in 6 or 7 years I've seen a lot of people lose a lot of money with an traditional IRA. Where I worked many took lump sums as they left and that with their 401 money is their pension and many are seeing their money disappear in months at a rate great than what they earned in a year. A good number opted for annunities and while the others have to look at reduced funds for life, the others are looking at no changes. I cringed thinking of the folks at Indymac, because I know many with rolled over accounts and a news story mentioned the amount of loss possible for those accounts and it's drastic and those people were not fiancial advisors, but workers and didn't know about a 250,000 insured limit. I might be wrong, but I think annunities might be the option for a lot of people.

Annuities can work for someone whose income is high and takes advantage of all other tax deferred savings before investing in an annuity.
The tax issue is one that changes over time and I have no faith that other investments will continue
receiving favorable tax rates with a change in leadership in Washington.

having just retired on may 2nd i chose an investment advisor who took 233,000 and purchased an annuity thru prudential . i was given a bump up of almost 15,000 with a guaranteed income for life of which i got my first check directly deposited in july for close to a thousand . so i am up to 258,000 right off the bat . then the market begins to cave in and gradually in just over 2 months i am back down to my origanal investment. i lost all of my bonus money and am getting really nervous. my advisor claimed my income was guaranteed and would never go down well that remains to be seen and i am a bit nervous to say the least.

J. Skinner says: "I am beginning to wonder about advice against annunities, because this is the second time in 6 or 7 years I've seen a lot of people lose a lot of money with an traditional IRA."

By this do you mean paper losses, as when a holding in equities falls in value during an equity market bear? For, if so, it is critical that you understand that, over at least the last 80 yeras of secular (long time) bear markets, every period of loss has been followed by a period of gain that brings the value of the holdings back to or much higher than the value before the bear started. The only real loss occurs when one sells one's equities after they have lost value. If one holds enough money in constant value instruments, CD's, Bonds and the like to cover enough living expense needs for two or three years, the rest should be in equities to take advantage of their great earning power. Otherwise, and especially in the case of annuities or bonds paying a constant, never increasing income, one will see income constantly eroded by inflation.

Once again, these self proclaimed gurus of finance have only told part of the real story. Annuities are a wonderful choice for pre and post retirement vehicles. Set aside the tax deferral and look at the other benefits... guarantee of principal, guarantee of interest, opportunity for lifetime income meaning you can never run out of money. Fixed index annuities offer the opportunity to share in the growth of the market and never give any back when the market declines. No up front costs and good liquidity. You can only get a guaranteed income from a guaranteed product. Variable annuities are a different story, with expenses and the risk that fixed annuities do not have. Mr. Solin doesn't speak to the ongoing cost of owning stocks and mutual funds and paying a fund manager whether one makes money or not. I wonder why?

I have TIAA-CREF which does guarantee a certain income. The RA portion is 100% annuity and the SRA (supplemental) can be transferred out over 8 years. RA is presently at 6% and the SRA is at 5.25. So I might now be making a killing I am safer than most.

I wonder where you get your information from that annuities are high cost investments. I myself offer a several annuities from several companies as well as mutuals. All the mutuals I offer come with annual fees while none of the annuities do. In fact I strongly promote indexed annuities. Many come with bonuses, no annual fees what so ever, share in market gains with generous caps, protected against any market losses. Yes, there would be panalties for early withdrawals in excess of the 10% per year, but arn't retirement accounts for retirement? I find annuities a very good investestment option.

While it is true that you can lose money in "Variable" annuities because your money is usually invested in the market where you travel with the ups and downs--on the other hand "NOBODY" in the history of annuities back to Roman times has ever lost a dime in 'GRAs'(guaranteed return annuities) which can be linked to the S&P indices or several other indices but a person will never take a loss--in a bad year they make nothing but will not suffer the loss--in a good year they will share in the gain--not bad sharing in the gain and not worrying about taking a loss.. That 80 year returns in the market baloney--who's got 80years to save? So get real---mutual funds are another joke, who's ever made a killing off mutuals?--no-one! Most mutuals the return is @ 4% in a good year and guess what the return is when you take into account all the fees attached--why pay a broker for the privilege of losing your money for you! Investment 'gurus' are always bashing annuities and conveniently not telling anyone about GRAs because they know that if truth be known no-one would put their hard-earned money at risk! I for one do not care to take 'ANY' kind of loss and so GRAs are for me!

This guy wrote a book and made money????????

Now if you look at "old school" annuities I agree but the newer annuities with "GUARANTEES" in regards to income and accumulation (without annuitization) this guy must be semi-retarded why would you want to do a ROTH that is not sheltered with some guarantee. Look at it this way if you were retiring this year how could you? ROTH's are phenomenal investment vehicle but please tell me if the market is down when you go to get your money (retire) where is the benefit of a tax free vehicle...The way I see it if you can get a 7% compounding interest rate on your income stream "GUARANTEED" do the math every 10 years roughly your income stream doubles with NO market risk...I hope this guy did his research but he probably didn't thats why he is on AOL not google.....LOL

cman,
Are you saying that a fixed index annuity will yield 7% compounding interest rate on your income stream "GUARANTEED"?
I live on an IRA (lump sum) and also am very concerned about my losses. Been looking at index annuities for six months but still haven't made up my mind.

No, An indexed annuity does not promise you a 7% compound return. It does promise you no market losses though. It also promises you market share on the upside. Many also offer you bonuses. I have seen as high as 20 percent. Ofcoarse the higher the bonus the longer the surrender period and also some annuities with bonuses will require you to annuitize your funds for at least a given number of years, but not all. Going back to the 7% return, yes it can happen, in favorable maket conditions. The good thing is that you never have to worry about market losses. Just make sure the annuities you are considering also have an annual reset. If your annuity does not have an annual reset, when ever the market losses you will not lose a dime, but the following year before you share on any market gains the index has to surpass the previous high mark. However, with an annual reset what ever the gains are for this year( no matter how bad of a year the market had the previous year) you share in those gains. So , if you think about it since the markets are terribly down these past few years, when the market does begin to recover you will be able to share in those big gains that are sure to come. To be able to share the most of the gains make sure the annuity you consider also has as high as possible caps. That can be tricky because there are many ways you can set up your market gains, They can be annual, monthly, and daily. And than you can also use averaging on those. It does get complicated. Just look into the details of the crediting methods employed. A very important issue with annuities is suitability. Make sure the annuity is suitable for you. If you are in your 40;s and 50's, maybe even in your early 60's and in good health you can go with longer surrender periods. However, if you are older or in poor health you should go with an immidiate annuity or a short surrender period at most.

You may be wondering how I know these things. Well, I do offer both mutuals and annuities. Mostly I stick to annuities. If you have any questions just post me and I will respond.

You may be wondering where I get my information. I know these things because I offer many types of annuities to my clients.

Darn it!

Sorry about the last section where I repeat myself!
A phone call came in and disrupted my train of thought!

I have to agree, fixed index annuities are the best way to go in this present economic condition. What most Americans do not realize is that there has been permeant damage done to the economy.

Fixed Index Annuities cannot be argued again as it would could against logic. There is a "absolute" guarantee of NO LOSS when the market is down, and a guarantee of gain when it is up. While on the other hand 401 ks, Mutual Funds, etc., are the total opposite. Don't listen to these self proclaimed gurus who make money off there books, and secret contracts with high powered firms that specialize in mutual funds etc. THESE PEOPLE ARE CORPORATE AMERICAN CROOKS. For example everyone loves Susie and all her books. What people fail to realize is that she has numerous agreement with FICO and other organizations that seek to deceive the American people, and make them enslaved in numerous ways in relation to finances etc. It is a very deceptive system that is designed to make some rich at the sacrifice of families. SO BE CAREFUL, and stick to what is safe and guaranteed!

>> it is critical that you understand that, over at least the last 80 years of secular (long time) bear markets, every period of loss has been followed by a period of gain that brings the value of the holdings back to or much higher than the value before the bear started.>>

That would be great if we all had 80 yrs to live :) It may also be critical to note the flat 1973-83 decade where stocks earned zero--plus the very rare occurrence of two bear markets in the last 7 years, with this one showing things not occurring since 1929-35. Raising the pct in fixed income doesn't seem like a bad idea.

I have been in the financial services business since 1970 - for you to blast Index annuities indicates you have your own agenda....my clients year to date DID NOT LOSE 15% in the broad market; and when the "Bull" returns they start from there not down 15, 20% or more - Unfortunately you have many cohorts trashing Index annuities, including many Broker Dealers who are "P.O" since a significant number of their clients have moved to FIA'S and they don't get a "haircut" from any of their advisors - plus big brother regulatory sees the opportunity for revenue as well - I am not a big producer having been in management most of my career but I still (on paper) am proud to say my clients did not LOSE 1.500,000 (15% OF THEIR
RETIREMENT ACCOUNT). LIKE ANY FINANCIAL PRODUCT, THE FIA CAN BE AN EXCELLENT FIT WHEN A PROPER FACT FIND AND ANALYSIS IS COMPLETED = Morale of the story - trash FIA'S, well then, follow the money trail!!!!!!!!!!!

ok annuities are not good for everyone but they do play an important part once you've accumulated savings.... it is a way to distribute money... if you have maxed out your 401k or ira and want to save more for retirement it is a tax deferred vehicle , what's wrong with that?
many people retired this dec 2007 and have lost a lot of principal but people who had money in annuities who have certain guarantees didn't loose money on paper and can get income off of their contract values , what's wrong with that instead of suffering a loss in their 401k or ira and have just lost that money in their mutual funds with no way to guarantee or protect you from losses or even guarantee a percentage of income ..

learn about the new annuities they are different than the older contracts..

I have investments in both the stock market and annuities and annuities are far superior. The stock market is run by a group of crooks that pay for advanced information and you are the sucker.
These so called experts have close ties to wall street and will tell you anything that produces a buck for them.
How many are in prison as we speak?

I am 70 yrs and because of the beating I've taken in the market I'm kind of timid to go ahead and put 250k into anything . Ive talked with various advisers and they all say that I should with variations put 100k into a fixed annuity and another100k into avariable annuity . Ladder 30k and put 20k into a money market to keep it fluid for the rainy days. Many moons ago I did not like annuitys, mainly because what people told me of what had and how they affectived them. Can someone say what's best

I am shocked by the fact that this jack ass puts annuities down. Has anybody heard about the GLI (Guaranteed Lifetime Income Annuities)??? this is a great product for lifetime guaranteed income!!! How great would it be to put a portion of your life savings in this product and have the piece of mind and most important the guarantee that you can pay your bills for the rest of your life!!!!! im sorry, but this is powerfull unlike the markets inconsistancy. Has anybody thought about how much retirement would last withdrawing as little as 4 or 5 percent a year? minus the market loss and inflation? You have not only used up withdrawls but the market has just taken a huge chunk on top of that. Now how much have you really lost Mr. and Mrs retiree??? its scary isnt it? Now during accumulation most of your money should be in a deversified portfolio but it is still necesary to offset your losses during a down market with a fixed rate of return.

I have an AIG Flexible Premium Deferred Annuity, purchased through Wells Fargo. Does anyone know if these annuities are insured?