I am an uninformed individual who has seen my small investment get smaller & smaller. the other day I sat in on a presentation of the Allianz MasterDex10 annuity. Here is what was preswnted:
1. We would receive a 10% bonus DAY 1 of our investment. With an additional 12% bonus at the end of year 1.

2. Any additional anounts added in years 2 & 3 will receive a 12% bonus ane the end of those respective years.

3. Now the really good part. The initial investment will DOUBLE at the end of year 8.

This assumes that no funds are taken out during the term of the annuity. Sounds too good to be true right? The brochure lists the following penelties for withdrawal during the contract period as follows starting with year 1:
10%, 10%, 10%, 8.75%, 7.5%, 6.25%, 5%, 3.75%, 2.5%, 1.25%, 0%

We were told that some sort of trust should be set up.

I just read your forum and the agent is comming back today. I know this is real short notice, but I would appreciate knowing what questions I should ask?

Thank you,

Randall

In response to Denny’s post in October, I believe in the KISS principle where in my parent’s situation, they have half of their bulk in GNMA’s for security and interest. The other half is normally in the total market index for growth. At the beginning of the year due to abnormal times, they went to 75% GNMA’s and are quite pleased.

They re-balance the portfolio once a year.

They do have a stock portfolio with quality stocks paying dividends, some individual bond issues as well.

I think that is one of the more sensible ways of managing risk and expense.

Dan

On the right are the “Annuity Salespeople” who are only in the business to make unbelievably obscene amounts of money ripping off seniors by selling them those despicable annuities (especially the “Index” type). And on the Left are the “Financial Advisors” (some even “Certified”) who are only in the business to “help people” (not for the money) by using software to track what has happened in the past 50 years and have much better ways for people that have no risk tolerance, short time horizons and know nothing about investing,…to invest.

So to all of you that fall in either groupe here’s a question: If a prospective client said this to you…what would you recomend?

Hi I’m 69. I have this money still in my company 401k that I need to last for my retirement

I have watched my retirement account make money for everyone but me for the last 10 years. My mutual Fund has been charging me fees each year even when I lose money or they sell losing stocks in my account. In fact since I retired I have seen my account drop 10% in value.

I don’t know anything about investing and according to what I have seen in the last week neither does anyone else.

I want to do a little better than I can in CD’s which I like because they are safe.

I want the money to last me for the rest of my life

I want my kids to receive what ever is left without having to go through probate.

From the post above think this is what most of the greedy “Annuity Salespeople” might say:

Annuities are a save place to keep your money.
You can not lose your principle because it is guaranteed.
You do not need to know anything about investing.
They can do better than your CD’s.
They can pay a minimum interest each year for up to seven or ten years as long as you agree to leave your money in the account for that period of time before you move it.
You can annuitize them and not outlive the income
They by pass probate.

Without giving up any of the above features if you are willing to take the chance that you will receive no interest in a particular year you can also have the option of receive better than the minimum interest in others years.

If you are willing to agree to leave your money in this annuity for seven to 10 years you could also receive an immediate bonus to your account which might help make up for some of the losses your account has experienced.

If this sounds like something that might be interesting to you let me tell you the negatives of these annuities.

What would the “Financial Advisors” say? As I have been i(in the past) a registered rep here’s what I believe the securities people would say:

What would the “Financial Advisors” say? As I have been (in the past) a registered rep here’s what I believe the securities people would say.

I do not have guaranteed products.
You can lose some or all of your investment.

It is your responsibility to make the investment decisions.

Unless your investment is in an IRA type of account you will pay taxes on the profit each year.

We will charge you an annual fee each year based on the value of the account.

We will charge you a sales fee any time you put more money in the account.

We will charge you a sales fee every time we sell some of the account.

Over the last 10 years, the inflation adjusted return on the S&P 500 was -17%.

If you reinvest your dividends it’s better; the inflation-adjusted return was only -2%.

Any Thoughts?

Just find someone you trust!!!

Oh and to John there are so many annuities out there that are linked/i hate that word because they are not actually linked at all they just use the numbers from the various bonds that the insurance carriers purchases,but i do know of one carrier off the top of my head that uses treasury bonds…try Lincoln Benefit life,its a Allstate company.

I have to say one more thing we as insurance agents/advisor’s get a commission for the account we set up ranging from 1% to 10% and rightfully so…..think about the broker getting his money weather you make or lose money not to mention all the fees along the way and taxes….we are safe money people they are risk takers….im not about to have a 60 to 80 year come in my office and put them in a mutual fund or variable annuity.Look where the market is today,i can look at all my clients and assure them they are safe,annuities have never lost a penny,unless the client didnt live up to his contract just like if he didnt with a CD.