Question about annuities...please help

[California Girl]

The absolute last thing to do is to ask a bunch of strangers on a message board. Get professional help.

 

[Madeline]

The Op has, CG, long ago. The rest of us are just bullshitting about investing.

 

[Gadawg73]

A man that waits until late 60s and early 70s in the mid 1980s and then converted their TIAA or CREF investments into annuities with a survivor benefit AND the survivor, the wife, is still living at age 88 and will most likely live another 10 years -then it was a good investment.
Dad did that, died this past May and my mother collects 4K a month until she dies.
But that is the RARE case. I agree 100% that in this market annuities SUCK.

 

[sjay]

So far all you've gotten is that annuities have high fees and that is correct. No one has advised you what to invest in.Here is my advice to you and your parents,first of all pick a large mutual fund company with index funds that have low management fees and no sales commissions. Vanguard or fidelity would be my choices,next comes asset allocation. 25% total index stock fund, 20% international index fund and 15% commodities index fund. For the 40% cash portion I would put 20% into a bond index fund (interm. range) and the other 20% get brokerage CDs tru Vanguard $10,000 for a one-year CD, $10,000 for a two-year CD, 10kfor three yr cd,10k for 4yrcd and 10k for 5 yr cd, that way youhave one CD expire every year and renew it for five years eventually you have five five-year CDs with one expiring every year and you also make a play on interest rates as they go up. The balance of 200k goes in your money market fund and start dollar cost averaging into the four index funds mentioned above. Dollar cost averaging should be done once or twice monthly(automated) to be done in identical increments to be completed in about two years.cost averaging is a huge advantage because you wind up buying fewer expensive shares and more cheaper shares it's like timing the market correctly. Now once the money is all in these funds, other thing is to rebalance, once or twice a year.In other words if a certain fund outperforms you sell shares and buy shares of the other fund or funds that have dropped below their original allocations,you have maintain original allocations this is similar to taking profits( automatically)You have to remember the index funds outperform 80% of your professional brokers and money managers year in year out and you also save a lot of costs involving commisions and management fees.

 

[william the wie]

There are legitimate arguments about allocation fractions but generally sjay has a very good alternative for you, if your parents can and will put it on automatic pilot. The problem with a Browne portfolio, the plain vanilla version being equal portions: cash; precious metals; real estate; bonds and stocks; is that rebalancing sounds stupid. It works quite well but selling winners and buying losers takes discipline most people don't have.

 

[PC_Geek]

Hire a fee-only registered investment adviser. Anybody and everybody else will sell you inferior products like annuities. Hope you didn't make the mistake of locking your money up in an annuity prison. Forbes magazine says "We don’t recommend an allocation to annuities for ANY portion of your portfolio.". The article in Forbes was called "The false promises of annuities and annuity calculators."

 

[Politico]

Wow holy four years old Batman. You don't invest in annuities at 61. Problem solved.