Comments on: Variable Annuities with Living Benefits http://gotoretirement.com/2009/09/variable-annuity-living-benefit/?utm_source=rss&utm_medium=rss&utm_campaign=variable-annuity-living-benefit A Baby Boomer's Journey from Retirement Planning to Retirement Living Mon, 21 May 2012 17:39:02 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Monty Morton http://gotoretirement.com/2009/09/variable-annuity-living-benefit/comment-page-1/#comment-1593 Monty Morton Wed, 16 Sep 2009 15:41:57 +0000 http://gotoretirement.com/?p=3655#comment-1593 Scott's advice, although well intentioned, is just plain poor. The VA's with the Guaranteed Income Benefit, if truly understood, irrespective of the fees, have Guaranteed 'Set Points' that guarantee an amount for income purposes, and that 'set point' can never fall below it's original point; witness the market fall of 2008. Yes, Scott makes a good point about an immediate annuity. However, what if an individual had their money in the market, lost principal, then went out to purchase an immediate annuity? So what? Scott loses sight of that very important point. To fully understand all the 'finer points' of these contracts would take more than this space allows, and certainly there are some "gotchas" in these new VA's, but to say they are not appropriate, is giving poor advice. They are not appropriate for everyone, and certainly useful for some. Scott’s advice, although well intentioned, is just plain poor. The VA’s with the Guaranteed Income Benefit, if truly understood, irrespective of the fees, have Guaranteed ‘Set Points’ that guarantee an amount for income purposes, and that ‘set point’ can never fall below it’s original point; witness the market fall of 2008.

Yes, Scott makes a good point about an immediate annuity. However, what if an individual had their money in the market, lost principal, then went out to purchase an immediate annuity? So what? Scott loses sight of that very important point.

To fully understand all the ‘finer points’ of these contracts would take more than this space allows, and certainly there are some “gotchas” in these new VA’s, but to say they are not appropriate, is giving poor advice. They are not appropriate for everyone, and certainly useful for some.

]]> By: Ray Buckner http://gotoretirement.com/2009/09/variable-annuity-living-benefit/comment-page-1/#comment-1546 Ray Buckner Mon, 07 Sep 2009 22:18:37 +0000 http://gotoretirement.com/?p=3655#comment-1546 Although I am a bit leery of the fees associated with variable annuities, the article does not present a fair apples-to-apples comparison between immediate annuities and variable annuities. Immediate annuities are just that. Payments begin immediately, and the annuitant loses control of their money. Payments are fixed for life (unless a rider is added). Variable annuities are meant to be a long-term investment, and should be sold as such. So, the comparison listed above by Scott Burns is not a fair one, as the two products have two different objectives. If a person purchases a variable annuity and waits ten years to begin 5% withdrawals, their monthly payout would be significantly higher than the $417 in the comparison. The bottom line, if income is needed immediately, than the immediate annuity is the way to go. If a person has time to let their money grow, then a variable annuity with living benefits is a good way to go. Although I am a bit leery of the fees associated with variable annuities, the article does not present a fair apples-to-apples comparison between immediate annuities and variable annuities.
Immediate annuities are just that. Payments begin immediately, and the annuitant loses control of their money. Payments are fixed for life (unless a rider is added).
Variable annuities are meant to be a long-term investment, and should be sold as such. So, the comparison listed above by Scott Burns is not a fair one, as the two products have two different objectives. If a person purchases a variable annuity and waits ten years to begin 5% withdrawals, their monthly payout would be significantly higher than the $417 in the comparison.
The bottom line, if income is needed immediately, than the immediate annuity is the way to go. If a person has time to let their money grow, then a variable annuity with living benefits is a good way to go.

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