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 Posted: Sun Jan 24, 2010 1:45 pm Post subject: Pls show me the comparison of life insurance pension schemes |
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| comparison between life insurance and mutual funds |
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drahul
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| Posted: Mon Jan 25, 2010 12:35 am Post subject: |
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| Comparison in what way? |
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BNTRS
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Pirate91
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| Posted: Thu Jan 28, 2010 11:12 am Post subject: |
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Hi drahul
What kind of a comparison are you looking for? Mutual funds and life insurance are completely 2 different products and different in nature. I hope you can specify your query.
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sil
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| Posted: Sun Feb 07, 2010 6:57 pm Post subject: |
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Pension option #1 Invest your pension into a mutual fund and take a chance of losing all your money and have to re-enter the work force at an advanced age. (It's called a Wal-Mart Greeter) BNTRS recommends this strategy.
Pension option #2 Invest your pension into an immediate annuity with a life only payout. (this would guarantee an income for the rest of your life). You could also take a portion of this income to pay for a life insurance policy that would re-insure your original investment. For example: If you had 100K and received 1000 per month from the immediate annuity you could take 300 per month and re-insure the original 100k for your heirs such as a spouse. (This strategy is called Pension Maximization)
** Disclaimer: Assuming you are insurable with a favorable rating. Also there are several settlement options such as 10 yr. Certain and life and so on.....
Not all insurance companies are created equal so shop around.
Pension option #3 Invest in a fixed indexed annuity with an income rider. Beware of the risky Variable annuity!
Remember this is your RETIREMENT money! Don't play games with it! Think how bad you will feel if the stock market robs you of your golden years.
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Fan of Gary
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| Posted: Sun Feb 07, 2010 10:35 pm Post subject: |
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Nope actually I would tell anyone with a pension to leave the money in the pension, and I think almost every case where the advisor suggests a rollover there is malpractice going on.
Taking the money out of the pension opens the money and income stream up to massive liability it otherwise would be immune to.
And your definition of a pension max is incorrect. I would advocate a real pension max to someone; it is usually the best way to maximize benefits. The true pension max is taking the life only option on a pension payout and using the difference between the life only and joint option to buy life insurance, it has nothing to do with a SPIA--someone who wants to be so critical all the time really should understand this. |
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BNTRS
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| Posted: Mon Feb 08, 2010 1:22 am Post subject: |
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| Quote: | | Nope actually I would tell anyone with a pension to leave the money in the pension, and I think almost every case where the advisor suggests a rollover there is malpractice going on. |
Please explain. I've certainly done this before. There was no malpractice and it was in the client's best interest. |
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InsuranceExpert
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| Posted: Mon Feb 08, 2010 1:49 pm Post subject: |
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BNTRS who the hell said anything about a spouse. My definition of pension max is right on! In the question it poses a single person. Don't make things up just so that it fits your answer. Also to leave the money in the pension is not smart. Now you are opening your client up to someone else making decisions for them. Their are times when it makes sense to leave the pension where it is but to say it is malpractice to move it? Go practice law some place else.
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Fan of Gary
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| Posted: Mon Feb 08, 2010 10:17 pm Post subject: |
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| Quote: | BNTRS who the hell said anything about a spouse. My definition of pension max is right on! In the question it poses a single person. Don't make things up just so that it fits your answer. Also to leave the money in the pension is not smart. Now you are opening your client up to someone else making decisions for them. Their are times when it makes sense to leave the pension where it is but to say it is malpractice to move it? Go practice law some place else.
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Actually BNTRSs definition of Pension Max it right on. If there is no spouse then you can't do pension max. What you are talking about is just comparing a SPIA using the lump sum option of the pension to the lifetime payout. This is a prudent thing to do and is something I always recommend my agents do, but it is not "Pension Max".
Also I recommend not being quite as combative. Most of us are adults here and we all make mistakes from time to time....even myself. A lively discussion is one thing, but there is no reason to fight. |
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Marpol
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| Posted: Tue Feb 09, 2010 2:35 am Post subject: |
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| Removing money from a pension opens it up to creditor claims and liability. Inside funds inside a pension and income streams from pension are not subject to creditor claims or liability. That's why I'd rather leave the money where it is. Placing it in a SPIA opens up liability, and pension funds are guaranteed to a degree much higher than an SPIA in any states guarantee fund. |
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BNTRS
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| Posted: Thu Feb 11, 2010 6:27 am Post subject: |
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BNTRS' advice is sound. If the pension is a defined benefit plan, taking a lump sum option will erode the value of the fund compared to a lifetime income option. If not directly rolled over into an IRA or qualified annuity, or rolled within 60 days of receipt of the funds, it will also be subject to income taxation in the year of distribution. That would probably result in a bump to the highest marginal tax rate for most persons. Ouch!
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MaxHerr
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