I would rather put my money in a multi year guarantee annuity paying anywhere from 5 - 6% guaranteed per year, than in an indexed annuity with the hopes of earning 6% if I'm lucky.
Most agents won't do this though, because they don't want to work for 2 - 4% commission when they can get 5 - 10%.
Posted: Fri Jan 02, 2009 12:10 am Post Subject:
victor27s wrote:
I would rather put my money in a multi year guarantee annuity paying anywhere from 5 - 6% guaranteed per year, than in an indexed annuity with the hopes of earning 6% if I'm lucky.
The annualized average index annuity return for the five years ending 30 September 2008 was 5.57%.
Most agents won't do this though, because they don't want to work for 2 - 4% commission when they can get 5 - 10%.
The facts are...REGARDLESS...whether the agent commission was 2%, 10% or something in between...THE CLIENT EARNED, on average 5% to 6% per year.
Remember the operative word above is AVERAGE.
victor27s.... are you aware of the Monthly Point to Point Annual Sum Strategy?
In an up cycle it's hard to beat, see actual statement below:
16.54% is not too bad! With all principal and past gain SAFE and sound.
Posted: Fri Jan 02, 2009 12:44 am Post Subject:
Add up 12 months of S&P index % change and divide by 12. Cap the positive months at x%, no cap on negative months. This strategy has a very high upside potential, but over the long run annual point to points tend to outperform from all the historical data that I have seen. You can always cherry pick certain periods where the monthly cap strategy looks great, but on average it tends to underperform the annual point to point strategy, again this is just based on studies I have seen and historicals I have run.
I'm in the minority among agents on favoring fixed annnuities over indexed annuities. I just feel that when fixed annuity rates are as high as they are now 6%, they are a better option. Now, when they were a low as they were earlier in the year 4%, I preferred the index annuity.
All in all, I think Aviva's index annuities are solid. I WANT TO MAKE IT CLEAR THAT I AM NOT BASHING INDEX ANNUITIES or GARY. Anyone who has an indexed annuity with Aviva, I think is in a good position.
Posted: Fri Jan 02, 2009 11:45 am Post Subject:
Victor, I agree.
The mathematical point I was attempting to make is over a 5 or 10 year period fixed annuities of whatever form will ALL average about the same.
Of course, as we all know, sometimes it's not what you gain that's important it's what you don't lose.
Posted: Wed Mar 11, 2009 03:57 am Post Subject:
I can't tell you how many clients I have done financial planning for that have lost nearly half of their retirement savings because of point in time risk. Investing and saving for retirement when you're 30 and actually maintaining your retirement are two very different things. I also see too many clients with 80-90% in company stock...one word...ENRON!
Posted: Wed Mar 11, 2009 02:09 pm Post Subject:
I'll never understand people 'playing' up to the minute...IMO when you are within 10 years of retirement, time to look for safety with the vast majority of your money....when you get to a certain age there is NO time left to make up for a large loss...so many family and friends of ours have lost nearly all of their (401 type retirement) money because they didn't get out of the high risk areas when the tide started turning...and all have said, they now have to put off/ move back their original retirement time, because they ''have to wait for this to turn around'' and get their money back. :roll: :roll: I just don't get it...and some (brothers and sisters) we nearly begged them to move their money starting last summer (we headed for cover a year ago this month)...but they just kept thinking it wouldn't last....it's so sad really....now they just set waiting for a wind fall i guess... :? You can 'play' the high risk game (IMO we did) when you are in the 20's and 30's but by the time mid fourtys come a knocking a prudent person should start to consider CYOA... :wink:
Posted: Thu Jan 01, 2009 08:23 pm Post Subject:
I would rather put my money in a multi year guarantee annuity paying anywhere from 5 - 6% guaranteed per year, than in an indexed annuity with the hopes of earning 6% if I'm lucky.
Most agents won't do this though, because they don't want to work for 2 - 4% commission when they can get 5 - 10%.
Posted: Fri Jan 02, 2009 12:10 am Post Subject:
victor27s wrote:
I would rather put my money in a multi year guarantee annuity paying anywhere from 5 - 6% guaranteed per year, than in an indexed annuity with the hopes of earning 6% if I'm lucky.
The annualized average index annuity return for the five years ending 30 September 2008 was 5.57%.
See THIS LINK at the very bottom of the page.
Most agents won't do this though, because they don't want to work for 2 - 4% commission when they can get 5 - 10%.
The facts are...REGARDLESS...whether the agent commission was 2%, 10% or something in between...THE CLIENT EARNED, on average 5% to 6% per year.
Remember the operative word above is AVERAGE.
victor27s.... are you aware of the Monthly Point to Point Annual Sum Strategy?
In an up cycle it's hard to beat, see actual statement below:
16.54% is not too bad! With all principal and past gain SAFE and sound.
Posted: Fri Jan 02, 2009 12:44 am Post Subject:
Add up 12 months of S&P index % change and divide by 12. Cap the positive months at x%, no cap on negative months. This strategy has a very high upside potential, but over the long run annual point to points tend to outperform from all the historical data that I have seen. You can always cherry pick certain periods where the monthly cap strategy looks great, but on average it tends to underperform the annual point to point strategy, again this is just based on studies I have seen and historicals I have run.
I'm in the minority among agents on favoring fixed annnuities over indexed annuities. I just feel that when fixed annuity rates are as high as they are now 6%, they are a better option. Now, when they were a low as they were earlier in the year 4%, I preferred the index annuity.
All in all, I think Aviva's index annuities are solid. I WANT TO MAKE IT CLEAR THAT I AM NOT BASHING INDEX ANNUITIES or GARY. Anyone who has an indexed annuity with Aviva, I think is in a good position.
Posted: Fri Jan 02, 2009 11:45 am Post Subject:
Victor, I agree.
The mathematical point I was attempting to make is over a 5 or 10 year period fixed annuities of whatever form will ALL average about the same.
Of course, as we all know, sometimes it's not what you gain that's important it's what you don't lose.
Posted: Wed Mar 11, 2009 03:57 am Post Subject:
I can't tell you how many clients I have done financial planning for that have lost nearly half of their retirement savings because of point in time risk. Investing and saving for retirement when you're 30 and actually maintaining your retirement are two very different things. I also see too many clients with 80-90% in company stock...one word...ENRON!
Posted: Wed Mar 11, 2009 02:09 pm Post Subject:
I'll never understand people 'playing' up to the minute...IMO when you are within 10 years of retirement, time to look for safety with the vast majority of your money....when you get to a certain age there is NO time left to make up for a large loss...so many family and friends of ours have lost nearly all of their (401 type retirement) money because they didn't get out of the high risk areas when the tide started turning...and all have said, they now have to put off/ move back their original retirement time, because they ''have to wait for this to turn around'' and get their money back. :roll: :roll: I just don't get it...and some (brothers and sisters) we nearly begged them to move their money starting last summer (we headed for cover a year ago this month)...but they just kept thinking it wouldn't last....it's so sad really....now they just set waiting for a wind fall i guess... :? You can 'play' the high risk game (IMO we did) when you are in the 20's and 30's but by the time mid fourtys come a knocking a prudent person should start to consider CYOA... :wink:
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