Posted: Wed Oct 08, 2008 10:08 am Post subject: Traditional Fixed Annuities and FIXED Indexed Annuities
Traditional Fixed Annuities and FIXED Indexed Annuities
AND
the value of NOTlosing principal and what type of impossible stock market returns one would have to get to just stay even with a SAFE investment that's just limping along at 5% per year.
A couple of pictures are worth a few thousands words:
_________________ Gary Spicuzza, *SAFE
Copyright 1956.
No rights reserved.
*Self Appointed Financial Expert
A picture is worth a thousands words but I swear there is soo mch that goes along with the stock world that I would have to take classes at a beginners level.
fixed annuity isn't as good as an indexed annuity and doesn't have the income potential of a variable annuity but yes it is very safe
But sometimes safety costs you money on the other end
And in the end what would you rather have much more money or a little bit because you played it safe
Even though the stock market fluctuates rapidly it has stayed pretty consistent in the way of it will make it's combacks and when it does those people who didn't play it safe with a standard annuity are going to have some great retirements and a lot of money to pass on
Even though the stock market fluctuates rapidly it has stayed pretty consistent in the way of it will make it's combacks and when it does those people who didn't play it safe with a standard annuity are going to have some great retirements and a lot of money to pass on
sorry, but if they don't lose most or all of it by then... _________________ Have you been helped by a poster? Do you want to show your appreciation? YOU CAN !! Just simply click on the donate button and send them some coin!
Even though the stock market fluctuates rapidly it has stayed pretty consistent in the way of it will make it's combacks and when it does those people who didn't play it safe with a standard annuity are going to have some great retirements and a lot of money to pass on
FarmAHam the stock market is a big boyz game. It's the big c a s i n o at the corner of Wall and Broad. If you're not the dealer, the numbers runner or the owner you're the loser, the playa, and you've just been played AGAIN.
Most people are exactly upside down when it comes to investing in stocks and mutual funds.
They're also not very good at math.
Baby Boomers who were approaching retirement age (62-65) will NEVER make back their losses of the past two weeks and this week is not over.
Stock broker wheeler dealers laugh in our face at the 2% or 3% minimum guranteed interest that's paid on fixed annuities and absurdly claim how that doesn't even keep up with inflation.
How well does a 25% to 37% loss of principal keep up with inflation?
A 25% loss of principal in one year will require a 47% gain the following year to just keep even with a SAFE investment that's just limping along at 5% per year. _________________ Gary Spicuzza, *SAFE
Copyright 1956.
No rights reserved.
*Self Appointed Financial Expert
Gary, I think you put it well when you referred to it a s a gambling establishment. If a person was investing his/her 401k is there a way that any further money taken from their pay can be put into another area like fixed annuities or does it have to keep going into the selections you made/
Also is this a bad time to call a stock broker and change your plan? This stuff is soo confusing
A Fixed Annuity or FIXED Indexed Annuity is a place to put your money after you've made your money.
It is a SAFE money savings instrument.
As far as investing in an annuity most companies have a minimum premium of $10,000 some are as low as $5,000 and others are as high as $25,000 with higher interest and bonus paid on contracts with minimum premiums above $75,000.
So you can see it's not the type of financial instrument that you can put $25 per week into and doesn't lend itself very well within a 401k while you are saving the money. You transfer the money out of the market when you're tired of being played.
My hat's off to CNBC for their article:
Take Steps To Avoid Outliving Your Nest Egg
By Shelly K. Schwartz
Click HERE.
Quote:
"The smartest thing an individual can do is buy an inflation indexedannuity that covers your basic living expenses,"
These contracts typically credit 6% to the Income Account Value regardless whether the market is up or down and regardless whether indexed interest is paid or not and the monthly payout is guaranteed based on age between 6% to 8% for the lifetime of the annuitant. _________________ Gary Spicuzza, *SAFE
Copyright 1956.
No rights reserved.
*Self Appointed Financial Expert
Thanks for the link I am going to check it out. I don't think we have our money in the right place because in two weeks we lost almost $1000. Gonna have to call the stock agent and see what the best move is before we lose it all.
fire, most 401k you can change both your contribution and the other money is and goes...and generally you can do this on line....personally as i've said we have all of ours contributions and what's in there in fixed/safe areas for now with this economy and market doing what it's doing...check out your web site for this...some of them charge you if you call and talk with a broker. _________________ Have you been helped by a poster? Do you want to show your appreciation? YOU CAN !! Just simply click on the donate button and send them some coin!
We really can't change the amount we contribute because in order for the company to match us we have to invest 5% of hubbys pay. It really adds up. I tried to understand all that stuff on the web site but it looks so confusing. I am afraid of making a wrong move. I know are stock isn't scattered between investments. A good three fourths are in 2035 retirement fund.
I will see if they charge but is that on top of the monthly charge we already pay I wonder?
Also, just to add a math perspective since I just went over this with my daughter because her company just implemented a 401k plan.
If you set aside $25 dollars per week and if your employer matches the $25, you just made 100% on your money. Now you have $50 dollars.
A great company benefit!
Now if you were invested 100% in a fixed saving instrument with no risk of loss even at 3% you would actually be making 6% on your money.
I'm talking about the money you have put in, your $25.00
6% of $25 dollars is $1.50
But you're in the fixed instrument that's only paying 3% with no risk of loss of principal. True, but your employer kicked in another $25.00.
3% of $50 dollars is $1.50
You made the $1.50 and on your money that equals 6%!
Now if I could absolutely guarantee you 6% growth on your money would you bother risking one penny with the day traders playing stocks like a flee market swap meet?
Of course not.
Most people DO NOT do what I've just laid out.
Understanding 4th grade math is essential to making money. _________________ Gary Spicuzza, *SAFE
Copyright 1956.
No rights reserved.
*Self Appointed Financial Expert
Okay so far getting the math thing. Now don't laugh but what is considered a "fixed savings instrument". You know comapnies offer 401k's to their workers but alot of us really don't understand the whole industry. Before I would just look to see if the amount was going up.
Also is there a way to learn more about how to understand all this..books,online ANYTHING?
No one can possibly advise you on your 401k without knowing what your options are and the best source of information should be the broker that services that account.
Most 401ks have some sort of fixed savings instrument that pay a guaranteed known rate of return without the risk of losing principal. Whether it's a CD, or a govenment bond or municiple bond.
Checking to see if your balance goes up doesn't mean you're making money. If you put in $25 and your employer puts in $25 and if at the end of the month your balance went up by $35 dollars....you lost money.
Like I said above this is 4th grade math.
You're not up $35.
You're down $15.
There are many people who just figure their losses based on what they put in only. In my example above your not up 40%, you are actually down 30% on the total contribution for that month.
If your hubby's employer matches up to 5% I'd put 5% in. Now you've made 100% on your money and I'd (meaning me personally) would protect every penny of that from any loss. _________________ Gary Spicuzza, *SAFE
Copyright 1956.
No rights reserved.
*Self Appointed Financial Expert
I sold an Indexed Annuity to a client last year and her annual review came up in June. By that time the market did not do well and she basically did not make any money. She was a bit dissapointed but was satisfied that she did not lose any money. Today, I know that she is so happy that she has invested in this Indexed Annuity because the market is way down and her principle will be safe. The only down side is that when the market does well, she will not enjoy the major gains (whenever they return). For her age and income this was the best choice that she could have made.
I hear that people are suppose to hang in there. I do not know how true it is but they are saying if you pull your money now when the market does make a turn you won't have a chance to gain back what you lost. Any truth to that statement?
