Retirement advice
- Thread starter dja4260
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Originally Posted by skyactiv
RED ALERT on the annuity. Salesmen/saleswomen at non fiduciary firms love to push them as they are usually the highest paying commission products they can sale.
They also have the highest complaints of any investment fund according to many state attorney generals.
This!
I sure don't know everything but it sure seems like this isn't anything you can't handle on your own. I'm a firm believer in Vanguard (as others have stated). I am a cop in NY and have for 18 years invested about 8k on average in deferred comp sole in Vanguard Wellington. Yes, not exciting but since the depression era its returned about 7%. My rate of return has been 7.3% on that. BUT the expense ratio is so dirt cheap you really end up doing well.
I have a friend who recently fired her broker. Shes loaded. This guy slayed her profits over the last 12 years with his fees. She ended up with a 4% return that should have been much higher. She's now diversified in 3 different Vanguard accounts.
RED ALERT on the annuity. Salesmen/saleswomen at non fiduciary firms love to push them as they are usually the highest paying commission products they can sale.
They also have the highest complaints of any investment fund according to many state attorney generals.
This!
I sure don't know everything but it sure seems like this isn't anything you can't handle on your own. I'm a firm believer in Vanguard (as others have stated). I am a cop in NY and have for 18 years invested about 8k on average in deferred comp sole in Vanguard Wellington. Yes, not exciting but since the depression era its returned about 7%. My rate of return has been 7.3% on that. BUT the expense ratio is so dirt cheap you really end up doing well.
I have a friend who recently fired her broker. Shes loaded. This guy slayed her profits over the last 12 years with his fees. She ended up with a 4% return that should have been much higher. She's now diversified in 3 different Vanguard accounts.
Originally Posted by OILJUNKIE
Thanks for that clip. It's all David Spade can do to keep from cracking up.
It's a classic, there's a few other down by the river ones also but that first one was the best. He smashed the table accidentally, it wasn't in the script that's why everyone was shocked but he kept going on with the skit. I think David said that in rehearsal he wasn't as outrageous swinging his arms so he couldn't stop laughing when he did it live.
Thanks for that clip. It's all David Spade can do to keep from cracking up.
It's a classic, there's a few other down by the river ones also but that first one was the best. He smashed the table accidentally, it wasn't in the script that's why everyone was shocked but he kept going on with the skit. I think David said that in rehearsal he wasn't as outrageous swinging his arms so he couldn't stop laughing when he did it live.
Originally Posted by dja4260
I have a retirement planner but would still like to get some feedback.
I currently have:
-Years in a state-funded education retirement system, which will get a set amount, for life, upon retirement
-Pay into Social Security, I'll collect benefits upon retirement
-Life insurance policy that I can cash out at a determined age
My wife has:
-Years in a state-funded education retirement system, which will get a set amount, for life, upon retirement
-Pay into Social Security, Collect benefits upon retirement
-Roth IRA
My wife and I are moving funds from another state-funded retirement system. The years of service will not transfer cleanly into the state where we reside. My wife will have $25,000 PRE-tax, and I will have $22,000 PRE-tax.
If we move the funds into an IRA or Annuity, it's my understanding that we won't be taxed at the 20% rate.
Thoughts on what you would do with this money?
Does your situation fall under "WEP" for Social Security?
https://www.ssa.gov/planners/retire/wep-chart.html
I have a retirement planner but would still like to get some feedback.
I currently have:
-Years in a state-funded education retirement system, which will get a set amount, for life, upon retirement
-Pay into Social Security, I'll collect benefits upon retirement
-Life insurance policy that I can cash out at a determined age
My wife has:
-Years in a state-funded education retirement system, which will get a set amount, for life, upon retirement
-Pay into Social Security, Collect benefits upon retirement
-Roth IRA
My wife and I are moving funds from another state-funded retirement system. The years of service will not transfer cleanly into the state where we reside. My wife will have $25,000 PRE-tax, and I will have $22,000 PRE-tax.
If we move the funds into an IRA or Annuity, it's my understanding that we won't be taxed at the 20% rate.
Thoughts on what you would do with this money?
Does your situation fall under "WEP" for Social Security?
https://www.ssa.gov/planners/retire/wep-chart.html
With respect to an annuity, the new retirement laws going through Congress would allow a person to buy an annuity with their 401K at retirement. People want a fixed income per month when they retire, not take out 4% per year and hope it lasts until I croak. Now this could be being pushed by insurance companies who sell annuities or maybe they will offer low frills annuities. Unsure.
And I work for a company that sells annuities. But in IT. To me widgets and insurance are the same. It's IT.
And I work for a company that sells annuities. But in IT. To me widgets and insurance are the same. It's IT.
Originally Posted by Imp4
Hey OP, you do realize that exactly zero people on this board (including me) are in a position to provide you with sound financial advise, right?!?
Speak for yourself.
There are several people on this board who have a net worth in the seven figure range. I know of some whose retirement accounts alone exceed the seven figure threshold.
I bet those members would have some insight into how to manage money in a retirement account.
Hey OP, you do realize that exactly zero people on this board (including me) are in a position to provide you with sound financial advise, right?!?
Speak for yourself.
There are several people on this board who have a net worth in the seven figure range. I know of some whose retirement accounts alone exceed the seven figure threshold.
I bet those members would have some insight into how to manage money in a retirement account.
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4WD
$50 site donor 2024
Agree - I read along and compare that to what I'm hearing from folks who have taken the leap - and knowing guys who went back to work when some of the details were missed - or they put a lump sum in the wrong hands.
I don't see where this subject is much different from others - if your business card reads Major Roce, CFP®, AIF® - please say so - otherwise we just assume you are trying to help each other with what you have run across in life.
I don't see where this subject is much different from others - if your business card reads Major Roce, CFP®, AIF® - please say so - otherwise we just assume you are trying to help each other with what you have run across in life.
Originally Posted by dja4260
I have a retirement planner but would still like to get some feedback.
I currently have:
-Years in a state-funded education retirement system, which will get a set amount, for life, upon retirement
-Pay into Social Security, I'll collect benefits upon retirement
-Life insurance policy that I can cash out at a determined age
My wife has:
-Years in a state-funded education retirement system, which will get a set amount, for life, upon retirement
-Pay into Social Security, Collect benefits upon retirement
-Roth IRA
My wife and I are moving funds from another state-funded retirement system. The years of service will not transfer cleanly into the state where we reside. My wife will have $25,000 PRE-tax, and I will have $22,000 PRE-tax.
If we move the funds into an IRA or Annuity, it's my understanding that we won't be taxed at the 20% rate.
Thoughts on what you would do with this money?
I would do a direct rollover to an IRA.
It's not so much that you're taxed at 20%, it's that they must withhold 20% if you take possession of the money at all.
The withholding hoses you. Because if you don't deposit the entire amount (in other words, add the 20% back in using your own funds) then you DO pay taxes AND penalties on the "distribution".
But when the money goes directly from fiduciary to fiduciary, there is no withholding, and no risk of the above trap.
Roth IRAs have particular contribution and income requirements. You may not be able to roll this over to a Roth.
But a traditional IRA is a good option.
Vanguard is an excellent company. Choose a fund for your IRA (you will each need one, retirement assets are individual) that matches your risk tolerance and asset allocation plan (which should be the first thing that your advisor determines).
In considering your risk tolerance and asset allocation, be certain to include your pensions, which, for all intents and purposes, are fixed income assets in your total portfolio.
Annuities are fraught with risk. They make great sales commissions for the company and salesperson. They are impossible to get out of. They make some sense, if the terms are good, and they frequently are not, for people seeking fixed income in retirement.
I would not recommend one as you already have substantial fixed income.
It would help if you disclosed the percentages of your portfolio, or relative value, of your pensions. Your present asset allocation is opaque, as is your age, intended retirement age, and risk tolerance. All of those would influence my recommendation.
I have a retirement planner but would still like to get some feedback.
I currently have:
-Years in a state-funded education retirement system, which will get a set amount, for life, upon retirement
-Pay into Social Security, I'll collect benefits upon retirement
-Life insurance policy that I can cash out at a determined age
My wife has:
-Years in a state-funded education retirement system, which will get a set amount, for life, upon retirement
-Pay into Social Security, Collect benefits upon retirement
-Roth IRA
My wife and I are moving funds from another state-funded retirement system. The years of service will not transfer cleanly into the state where we reside. My wife will have $25,000 PRE-tax, and I will have $22,000 PRE-tax.
If we move the funds into an IRA or Annuity, it's my understanding that we won't be taxed at the 20% rate.
Thoughts on what you would do with this money?
I would do a direct rollover to an IRA.
It's not so much that you're taxed at 20%, it's that they must withhold 20% if you take possession of the money at all.
The withholding hoses you. Because if you don't deposit the entire amount (in other words, add the 20% back in using your own funds) then you DO pay taxes AND penalties on the "distribution".
But when the money goes directly from fiduciary to fiduciary, there is no withholding, and no risk of the above trap.
Roth IRAs have particular contribution and income requirements. You may not be able to roll this over to a Roth.
But a traditional IRA is a good option.
Vanguard is an excellent company. Choose a fund for your IRA (you will each need one, retirement assets are individual) that matches your risk tolerance and asset allocation plan (which should be the first thing that your advisor determines).
In considering your risk tolerance and asset allocation, be certain to include your pensions, which, for all intents and purposes, are fixed income assets in your total portfolio.
Annuities are fraught with risk. They make great sales commissions for the company and salesperson. They are impossible to get out of. They make some sense, if the terms are good, and they frequently are not, for people seeking fixed income in retirement.
I would not recommend one as you already have substantial fixed income.
It would help if you disclosed the percentages of your portfolio, or relative value, of your pensions. Your present asset allocation is opaque, as is your age, intended retirement age, and risk tolerance. All of those would influence my recommendation.
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Originally Posted by Astro14
Originally Posted by dja4260
I have a retirement planner but would still like to get some feedback.
I currently have:
-Years in a state-funded education retirement system, which will get a set amount, for life, upon retirement
-Pay into Social Security, I'll collect benefits upon retirement
-Life insurance policy that I can cash out at a determined age
My wife has:
-Years in a state-funded education retirement system, which will get a set amount, for life, upon retirement
-Pay into Social Security, Collect benefits upon retirement
-Roth IRA
My wife and I are moving funds from another state-funded retirement system. The years of service will not transfer cleanly into the state where we reside. My wife will have $25,000 PRE-tax, and I will have $22,000 PRE-tax.
If we move the funds into an IRA or Annuity, it's my understanding that we won't be taxed at the 20% rate.
Thoughts on what you would do with this money?
I would do a direct rollover to an IRA.
It's not so much that you're taxed at 20%, it's that they must withhold 20% if you take possession of the money at all.
The withholding hoses you. Because if you don't deposit the entire amount (in other words, add the 20% back in using your own funds) then you DO pay taxes AND penalties on the "distribution".
But when the money goes directly from fiduciary to fiduciary, there is no withholding, and no risk of the above trap.
Roth IRAs have particular contribution and income requirements. You may not be able to roll this over to a Roth.
But a traditional IRA is a good option.
Vanguard is an excellent company. Choose a fund for your IRA (you will each need one, retirement assets are individual) that matches your risk tolerance and asset allocation plan (which should be the first thing that your advisor determines).
In considering your risk tolerance and asset allocation, be certain to include your pensions, which, for all intents and purposes, are fixed income assets in your total portfolio.
Annuities are fraught with risk. They make great sales commissions for the company and salesperson. They are impossible to get out of. They make some sense, if the terms are good, and they frequently are not, for people seeking fixed income in retirement.
I would not recommend one as you already have substantial fixed income.
It would help if you disclosed the percentages of your portfolio, or relative value, of your pensions. Your present asset allocation is opaque, as is your age, intended retirement age, and risk tolerance. All of those would influence my recommendation.
I'm 34, my wife is 32. We have zero debt except a 15 year mortgage of $141,000. We will have that paid off when we're 49 at the latest. The house is currently valued at 400k. I will net $5k monthly, my wife will net 3k monthly through our pension when I'm 62 years old until we or I die. Than we will get 80% of the spouses amount. I have a "whole life insurance policy", that I can draw from at any time and will be worth 59k when I'm 60 years old. I have 18k worth of stock and my wifes IRA that has 10k in it. My wife and I will also be eligible to collect SS which is another monthly 3k through their estimator.
We have two kids that will have college expenses. We have accounts set up for them that should cover at least 1/2 of college for each.
After speaking with my advisor, I think I'm going to put my wifes 22k in her IRA and my 18k in an annunity. My advisor is running the numbers and we're going to reconvene in a week. I hope this is helpful
Originally Posted by dja4260
I have a retirement planner but would still like to get some feedback.
I currently have:
-Years in a state-funded education retirement system, which will get a set amount, for life, upon retirement
-Pay into Social Security, I'll collect benefits upon retirement
-Life insurance policy that I can cash out at a determined age
My wife has:
-Years in a state-funded education retirement system, which will get a set amount, for life, upon retirement
-Pay into Social Security, Collect benefits upon retirement
-Roth IRA
My wife and I are moving funds from another state-funded retirement system. The years of service will not transfer cleanly into the state where we reside. My wife will have $25,000 PRE-tax, and I will have $22,000 PRE-tax.
If we move the funds into an IRA or Annuity, it's my understanding that we won't be taxed at the 20% rate.
Thoughts on what you would do with this money?
I would do a direct rollover to an IRA.
It's not so much that you're taxed at 20%, it's that they must withhold 20% if you take possession of the money at all.
The withholding hoses you. Because if you don't deposit the entire amount (in other words, add the 20% back in using your own funds) then you DO pay taxes AND penalties on the "distribution".
But when the money goes directly from fiduciary to fiduciary, there is no withholding, and no risk of the above trap.
Roth IRAs have particular contribution and income requirements. You may not be able to roll this over to a Roth.
But a traditional IRA is a good option.
Vanguard is an excellent company. Choose a fund for your IRA (you will each need one, retirement assets are individual) that matches your risk tolerance and asset allocation plan (which should be the first thing that your advisor determines).
In considering your risk tolerance and asset allocation, be certain to include your pensions, which, for all intents and purposes, are fixed income assets in your total portfolio.
Annuities are fraught with risk. They make great sales commissions for the company and salesperson. They are impossible to get out of. They make some sense, if the terms are good, and they frequently are not, for people seeking fixed income in retirement.
I would not recommend one as you already have substantial fixed income.
It would help if you disclosed the percentages of your portfolio, or relative value, of your pensions. Your present asset allocation is opaque, as is your age, intended retirement age, and risk tolerance. All of those would influence my recommendation.
I'm 34, my wife is 32. We have zero debt except a 15 year mortgage of $141,000. We will have that paid off when we're 49 at the latest. The house is currently valued at 400k. I will net $5k monthly, my wife will net 3k monthly through our pension when I'm 62 years old until we or I die. Than we will get 80% of the spouses amount. I have a "whole life insurance policy", that I can draw from at any time and will be worth 59k when I'm 60 years old. I have 18k worth of stock and my wifes IRA that has 10k in it. My wife and I will also be eligible to collect SS which is another monthly 3k through their estimator.
We have two kids that will have college expenses. We have accounts set up for them that should cover at least 1/2 of college for each.
After speaking with my advisor, I think I'm going to put my wifes 22k in her IRA and my 18k in an annunity. My advisor is running the numbers and we're going to reconvene in a week. I hope this is helpful
Good paying dividend stocks are your friend when you're retired.
OP is fairly young.... so ultra conservative investments are a BIG no no.
Be aggressive with some high quality ETFs.
OP is fairly young.... so ultra conservative investments are a BIG no no.
Be aggressive with some high quality ETFs.
If I may suggest;
Don't let your advisor handle all of your money. You are still young and have a lot of time ahead. Invest a portion of money on your own. This can be done very easily through a mutual fund or a ETF. A broad based index is a great way to start. Also start to educate yourself on the subject. There are many sources online to help you.
Don't let your advisor handle all of your money. You are still young and have a lot of time ahead. Invest a portion of money on your own. This can be done very easily through a mutual fund or a ETF. A broad based index is a great way to start. Also start to educate yourself on the subject. There are many sources online to help you.
Originally Posted by dja4260
I'm 34, my wife is 32. We have zero debt except a 15 year mortgage of $141,000. We will have that paid off when we're 49 at the latest. The house is currently valued at 400k. I will net $5k monthly, my wife will net 3k monthly through our pension when I'm 62 years old until we or I die. Than we will get 80% of the spouses amount. I have a "whole life insurance policy", that I can draw from at any time and will be worth 59k when I'm 60 years old. I have 18k worth of stock and my wifes IRA that has 10k in it. My wife and I will also be eligible to collect SS which is another monthly 3k through their estimator.
We have two kids that will have college expenses. We have accounts set up for them that should cover at least 1/2 of college for each.
After speaking with my advisor, I think I'm going to put my wifes 22k in her IRA and my 18k in an annunity. My advisor is running the numbers and we're going to reconvene in a week. I hope this is helpful
With that info, I would definitely skip the annuity. Way too young. But before you do that, how about some more info on the annuity? What are the fees and interest rates and what kind of commission is your advisor getting? What's the name of the annuity?
The main problem I have with them is their limited growth relative to your age. The S&P 500 is up 17.5% year to date and has averaged almost 14% over the last 10 years and about 10% over the last 30. I don't think you annuity will do anything like that.
I'm 34, my wife is 32. We have zero debt except a 15 year mortgage of $141,000. We will have that paid off when we're 49 at the latest. The house is currently valued at 400k. I will net $5k monthly, my wife will net 3k monthly through our pension when I'm 62 years old until we or I die. Than we will get 80% of the spouses amount. I have a "whole life insurance policy", that I can draw from at any time and will be worth 59k when I'm 60 years old. I have 18k worth of stock and my wifes IRA that has 10k in it. My wife and I will also be eligible to collect SS which is another monthly 3k through their estimator.
We have two kids that will have college expenses. We have accounts set up for them that should cover at least 1/2 of college for each.
After speaking with my advisor, I think I'm going to put my wifes 22k in her IRA and my 18k in an annunity. My advisor is running the numbers and we're going to reconvene in a week. I hope this is helpful
With that info, I would definitely skip the annuity. Way too young. But before you do that, how about some more info on the annuity? What are the fees and interest rates and what kind of commission is your advisor getting? What's the name of the annuity?
The main problem I have with them is their limited growth relative to your age. The S&P 500 is up 17.5% year to date and has averaged almost 14% over the last 10 years and about 10% over the last 30. I don't think you annuity will do anything like that.
You ask for advice, but then will not listen to it. The fact you have a whole life policy tells me that you are susceptible to salesman pitches that are not in your best interests.
Most of the people on this thread have advised against an annuity. In your situation with $11k a month (your numbers) already coming in when you retire, an annuity makes no sense whatsoever.
You do not have a financial advisor. You have a salesman who is taking you to the cleaners for his own gain. There is no scenario, with the numbers you presented, where an annuity is in your best interest.
Most of the people on this thread have advised against an annuity. In your situation with $11k a month (your numbers) already coming in when you retire, an annuity makes no sense whatsoever.
You do not have a financial advisor. You have a salesman who is taking you to the cleaners for his own gain. There is no scenario, with the numbers you presented, where an annuity is in your best interest.
Originally Posted by ArrestMeRedZ
You ask for advice, but then will not listen to it. The fact you have a whole life policy tells me that you are susceptible to salesman pitches that are not in your best interests.
Most of the people on this thread have advised against an annuity. In your situation with $11k a month (your numbers) already coming in when you retire, an annuity makes no sense whatsoever.
You do not have a financial advisor. You have a salesman who is taking you to the cleaners for his own gain. There is no scenario, with the numbers you presented, where an annuity is in your best interest.
I appreciate your feedback. My advisor is putting together numbers. That is all.
When I opened the whole life policy, I felt that it fit our needs. My wife receives a set amount if I die, and I can cash it out at any time without penalty. I can withdraw the funds in it tomorrow and do with it what I please.
My financial advisor is a personal friend. Not that it doesn't mean that I wouldn't explore my options.
You ask for advice, but then will not listen to it. The fact you have a whole life policy tells me that you are susceptible to salesman pitches that are not in your best interests.
Most of the people on this thread have advised against an annuity. In your situation with $11k a month (your numbers) already coming in when you retire, an annuity makes no sense whatsoever.
You do not have a financial advisor. You have a salesman who is taking you to the cleaners for his own gain. There is no scenario, with the numbers you presented, where an annuity is in your best interest.
I appreciate your feedback. My advisor is putting together numbers. That is all.
When I opened the whole life policy, I felt that it fit our needs. My wife receives a set amount if I die, and I can cash it out at any time without penalty. I can withdraw the funds in it tomorrow and do with it what I please.
My financial advisor is a personal friend. Not that it doesn't mean that I wouldn't explore my options.
Sam_Julier
$50 Site Donor 2024
No annuities. No fee based accounts. Never ever. It's not necessary, it benefits someone else and not you.
Maximize your IRA and 401k contributions.
Pay off your house as soon as you can. Debt is not your friend.
Open a Vanguard account. Purchase index funds. I prefer the following mix:
25% REIT Index
10% International Total Stock Index
30% Total Bond Index
45% Total Stock Market Index
This asset allocation works well for us. I'm retired. My wife works at Yale University. We own our home.
And as soon as my wife retires we will leave Connecticut.
Sam
Maximize your IRA and 401k contributions.
Pay off your house as soon as you can. Debt is not your friend.
Open a Vanguard account. Purchase index funds. I prefer the following mix:
25% REIT Index
10% International Total Stock Index
30% Total Bond Index
45% Total Stock Market Index
This asset allocation works well for us. I'm retired. My wife works at Yale University. We own our home.
And as soon as my wife retires we will leave Connecticut.
Sam
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A few weathly folks I've met always recommended high quality ETFs and mutual funds with super low fees (expense ratios).
Fidelity, Vanguard, Schwab, TDameritrade, etc.... you can build a great portfolio very easily.
Avoid becoming a landlord and have renters giving you stress.
Fidelity, Vanguard, Schwab, TDameritrade, etc.... you can build a great portfolio very easily.
Avoid becoming a landlord and have renters giving you stress.
I am a low expense ratio index investor in the preponderance of our portfolio.
One read of this book (Common Sense on Mutual Funds by John Bogle) was all I needed to become convinced of the merit of that approach:
https://www.amazon.com/dp/B00338060K/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1
That said, risk tolerance matters, as discussed in my PM.
Perhaps with a bit of reading, the increased understanding will change your risk tolerance...allowing for a better approach to long term investing...
One read of this book (Common Sense on Mutual Funds by John Bogle) was all I needed to become convinced of the merit of that approach:
https://www.amazon.com/dp/B00338060K/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1
That said, risk tolerance matters, as discussed in my PM.
Perhaps with a bit of reading, the increased understanding will change your risk tolerance...allowing for a better approach to long term investing...
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Originally Posted by dja4260
I appreciate your feedback. My advisor is putting together numbers. That is all.
When I opened the whole life policy, I felt that it fit our needs. My wife receives a set amount if I die, and I can cash it out at any time without penalty. I can withdraw the funds in it tomorrow and do with it what I please.
My financial advisor is a personal friend. Not that it doesn't mean that I wouldn't explore my options.
As I asked before, post specifically which annuity it is and what whole life policy you have. Whole life in general is hated by most people. There's a saying that goes buy term and invest the rest. You'd have to do your own analysis or ask for it from your adviser. Basically a term policy is cheaper and if just paid the lower premium for the term policy and basically dollar cost averaged into a mutual fund, your returns would be greater than just the whole life policy. That's why most people hate them. They usually have pretty good commission rates for whoever is selling them and the returns are more limited than just being able to buy any mutual fund you want with the rest of your funds. With the higher growth, once you reach the end of the term, you have enough assets where you don't need the life insurance component anymore. Of course when you invest the rest of the funds, you can always cash out or do whatever you want with it. I just opened a margin account on my mutual funds and have it handy to use as a line of credit if needed. You can't do that with a whole life policy.
As for the other poster with bonds in their mix, probably appropriate for someone who is older, for someone who is 32, they've got a long time horizon and can be much more aggressive with stocks.
Originally Posted by Mr Nice
Avoid becoming a landlord and have renters giving you stress.
Been a landlord for 10+ years. Doesn't really stress me out. It probably does for some other people though. Just depends on the person, some can handle it, some cant. I never really hear from my landlord friends how stressed they are about it. Some that I know that sold recently have made some pretty good gains. There's always pros and cons to any endeavor.
I appreciate your feedback. My advisor is putting together numbers. That is all.
When I opened the whole life policy, I felt that it fit our needs. My wife receives a set amount if I die, and I can cash it out at any time without penalty. I can withdraw the funds in it tomorrow and do with it what I please.
My financial advisor is a personal friend. Not that it doesn't mean that I wouldn't explore my options.
As I asked before, post specifically which annuity it is and what whole life policy you have. Whole life in general is hated by most people. There's a saying that goes buy term and invest the rest. You'd have to do your own analysis or ask for it from your adviser. Basically a term policy is cheaper and if just paid the lower premium for the term policy and basically dollar cost averaged into a mutual fund, your returns would be greater than just the whole life policy. That's why most people hate them. They usually have pretty good commission rates for whoever is selling them and the returns are more limited than just being able to buy any mutual fund you want with the rest of your funds. With the higher growth, once you reach the end of the term, you have enough assets where you don't need the life insurance component anymore. Of course when you invest the rest of the funds, you can always cash out or do whatever you want with it. I just opened a margin account on my mutual funds and have it handy to use as a line of credit if needed. You can't do that with a whole life policy.
As for the other poster with bonds in their mix, probably appropriate for someone who is older, for someone who is 32, they've got a long time horizon and can be much more aggressive with stocks.
Originally Posted by Mr Nice
Avoid becoming a landlord and have renters giving you stress.
Been a landlord for 10+ years. Doesn't really stress me out. It probably does for some other people though. Just depends on the person, some can handle it, some cant. I never really hear from my landlord friends how stressed they are about it. Some that I know that sold recently have made some pretty good gains. There's always pros and cons to any endeavor.
The overriding factor in this is probably understanding what you're investing in and I don't know if the personal friend advisor is a double edge sword or not in this situation...but annuities are inherently ( and purposely ) complicated beyond not being appropriate for the majority of people vs. other options....especially at age 34. For example, if any annuity you're considering contains a surrender charge where you can't can't get out of it for 7-8 years without an outrageous percentage of it as a penalty, then I wouldn't invest in it to begin with, etc. Does the idea cross your friend's mind..." It's only 18K, he won't hate me for that"...LOL
I'd consider this a suggestion thread with the crux of it being that whatever you get into, you fully understand its drawbacks, restrictions, pros/cons, and how those impact your situation if you change your mind. With annuities, that can be very difficult when these folks are commission-based versus being a fee-based advisor where at least a fiduciary duty can mean something. ...not to mention the typical performance difference versus what a couple in their 30s could do on their own over 30 plus years. IMO, any "guarantees" associated with annuities are greatly discounted in that long a time line possibly to the point of irrelevance.
I'd consider this a suggestion thread with the crux of it being that whatever you get into, you fully understand its drawbacks, restrictions, pros/cons, and how those impact your situation if you change your mind. With annuities, that can be very difficult when these folks are commission-based versus being a fee-based advisor where at least a fiduciary duty can mean something. ...not to mention the typical performance difference versus what a couple in their 30s could do on their own over 30 plus years. IMO, any "guarantees" associated with annuities are greatly discounted in that long a time line possibly to the point of irrelevance.
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