Re: New Member with a couple questions....
Ozarkharleyguy,
All Midland Life does is invest your assets in various funds - just like you would do in TSP or a rollover IRA. The only benefit to you is that they have a longer time horizon than you so they can potentially weather out a longer drawdown. If the drawdown on the investments Midland Life makes with your money lasts longer than expected you will find out what the 'guarantee' means.
You are paying for a gimmicky life insurance policy. You are paying for the 'service'. Why replace a tax advantaged investment account with a tax advantaged life insurance policy with a high fee investment account attached to it? Why not put the assets in something like the LIncome or L2020. The LIncome fund only lost 5% in 2008 and recovered that in less than a year. Your fees are then less than 0.2%.
A 3% return is slightly less than the 3.1% average rate of inflation. Like Burro, I think we will snap up in inflation and you will lose money every minute it is in a 3% account. If you already had the annuity income streaming your way to pay for the Winnebago gas would you be happy? Gas is $4 a gallon in Kalefornea.
Finally, I would keep my money liquid and free. Like the 60's. What happens if your CSRS pension doesn't keep up with expenses or gets cut? What happens if the Chinese stop funding our annual deficit and your Social Security gets cut. What if President Clinton changes the tax code on Social Security - a Clinton did it once, another can do it again!!!
I would bucketize. An annuity like this could be used in Bucket 1 (cash requirement for 5 - 7 years).
Lookin' up at the 'G Fund'!!!
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