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Thread: The Great Annuity Rip-Off

  1. #13

    Default Re: The Great Annuity Rip-Off

    Quote Originally Posted by GarySpicuzza View Post
    ChemEng, tell me something, "OTHER" than the Surrender Charge schedule, what's the "other" negative feature in a FIXED annuity contract.
    You are the sale person for these products and you want me to tell you what the negative is? Alrighty then...

    That aside, Ill bite. The obvious negative feature for fixed annuities (and any other annuity for that matter) is reduced value for years that markets exceed the fixed return rate. Another negative is the increased cost for the product when compared to other similar products (VPGFX, VPGDX, and VPDFX for example) that are MUCH cheaper.

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  3. #14

    Default Re: The Great Annuity Rip-Off

    ChemEng wrote:
    The obvious negative feature for fixed annuities (and any other annuity for that matter) is reduced value for years that markets exceed the fixed return rate.
    Traditional Fixed Annuities and Fixed Indexed Annuities ARE NOT INVESTMENTS. They are safe money savings instruments much like a bank CD in that respect. To compare money saved in a fixed annuity with money invested in stocks and mutual funds is apples and oranges.

    Allow me to re-write your statement to make my point and let's see if anyone would ever write or compare or say the following:

    The obvious negative feature for bank CDs (and any other CD for that matter) is reduced value for years that markets exceed the fixed return rate.

    The obvious negative feature for Treasury Bonds (and any other bond for that matter) is reduced value for years that markets exceed the fixed return rate.

    The obvious negative feature for bank savings accounts (and any other savings for that matter) is reduced value for years that markets exceed the fixed return rate.

    Get my point?

    By the way, you didn't point out the "other" negative feature in a fixed annuity (aside from the Surrender Charge schedule), you simply compared a SAFE money savings instrument to at risk investment money.

    Another negative is the increased cost for the product when compared to other similar products (VPGFX, VPGDX, and VPDFX for example) that are MUCH cheaper.
    There is ZERO costs in a FIXED ANNUITY.
    In dollars and cents that would be written $0.00.

    What has been confused here are costs in VARIABLE ANNUITIES (about 3% per year) with FIXED annuities (0% per year) then compared the non-comparables with mutual funds or stocks.

    A Variable Annuity is a bloated pig with lip stick SOLD by the Series 7 Registered Representative crowd who HAD to obtain an insurance license to be able to sell that product. They are the classic day traders playing stocks like a flea market swap meet....with your money.

    It is imperative that one understands that point.

    Insurance agents DO NOT sell Variable Annuities because they violate they fundamental aspect of "Safety of Principal" inherent in ALL annuities EXCEPT VARIABLE annuities.

    Now, what's the "other" negative feature in a fixed annuity setting aside the surrender charge schedule?

    Perhaps, before you answer, you may want to read THIS thread titled A Reporter's Guide to Fixed Annuities

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  5. #15

    Default Re: The Great Annuity Rip-Off

    I don't believe you will find much success marketing your annuities here. TSP already offers this stuff, and only 1-2% use it. Typically, annuities don't outperform other investment instruments that offer similar if not superior returns and stability. Annuities are another form of insurance, with costly premiums. Bonds, CDs and even savings accounts can produce similar results.

    And, for the Fed employee, the G fund pays approximately as well as annuities without the obligations or restrictions. An annuity that provides greater returns will likely be offered to those who will have less time to collect. Annuities do cost, and have a high cost, though those who sell them are adept at confusing and hiding the expenses. This is roughly equivalent to trying to get someone to by Whole or Universal life insurance.

    Those who offer annuities do so in hopes that the annuant will never be able to collect a sufficient return so that themselves, may be able retain the principle and the majority of interest earned. Annuities are very expensive income insurance, which is good for the insurance companies but not the annuant.

    Before you present material on this board, you should do your homework, understand your audience and the resources already available to them and then determine if your product or service has any value or merit.

    And then, you should contact the board Administrator and arrange to remit compensation for your commercial.

    However, I suspect your thread has less to do with a desire to "inform" the public than to "sell" to the public.

    So, you will soon understand the time you spend trying to convince us of the superior nature of your "product" will likely be a distraction from selling to others who are less informed. Unless you aren't that busy and have the time to devote to this. Then I suppose that tells us much about the state of the "annuity" business.

    I challenge you to remove the link and information to your website if your motives are truly alturistic.

    If you are really interested in informing the public, I am sure you will support and encourage those intersted to visit the following link http://www.fool.com/retirement/annuities/annuities.htm for an unbiased review of annuities.

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  7. #16

    Default Re: The Great Annuity Rip-Off

    Quote Originally Posted by GarySpicuzza View Post
    Insurance agents DO NOT sell Variable Annuities because they violate they fundamental aspect of "Safety of Principal" inherent in ALL annuities EXCEPT VARIABLE annuities.
    This link provides a list of companies that sell Variable Annuities, most of them being insurance companies

    http://www.thestreet.com/funds/ratings/10359664.html

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  9. #17

    Question Re: The Great Annuity Rip-Off

    Is Gothem being hood-winked ?
    Are there alternative goals at work ?
    Will Catwoman get her claws into Batman ?
    Will Robin ever come out of the closet ?

    Stay Tuned Till Next Entry !
    Same Bat-Time - Same Bat-Thread !

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  11. #18

    Default Re: The Great Annuity Rip-Off

    Quote Originally Posted by GarySpicuzza View Post
    There is ZERO costs in a FIXED ANNUITY.
    In dollars and cents that would be written $0.00.
    This is, at best, an attempt to deceive and, at worst, a flat out lie.


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  13. #19

    Default Re: The Great Annuity Rip-Off

    Quote Originally Posted by GarySpicuzza;165931
    There is ZERO costs in a [B
    FIXED[/B] ANNUITY.
    In dollars and cents that would be written $0.00.
    Fees and Expenses For FIXED ANNUITIES
    Most fees and expenses of a fixed annuity are factored into the stated annual percentage rate the investor is quoted. The rate quoted is the rate paid. Fixed annuity fees and expenses generally cover the insurance company's administrative expenses, the cost of offering the annuitization guarantee and profits to the insurance company and sales agent. Some fixed annuities may assess an annual contract fee, typically around $30.


    http://www.edwardjones.com/cgi/getHT...ies_fixed.html

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  15. #20

    Default Re: The Great Annuity Rip-Off

    Quote Originally Posted by GarySpicuzza View Post
    There isn't an annuity contract written that DOES NOT have a free withdrawal provision.

    None.
    Nada.
    Zero.
    Not ONE.

    10% is the typical MINIMUM, some contracts allow 10% per year but if no withdraws are taken up to 50% cummulative or 20% every other year if no withdraws were taken in the previous year.

    Annuity threads are always so much fun because setting aside the Surrender Charge schedule nobody can EVER come up with another negative feature.
    An Escape Clause
    Some fixed annuities have a bailout clause, sometimes known as an escape clause, that allows you to surrender your policy without penalty if the interest rate that’s being offered drops below a certain level, often one percentage point less than the previous rate, even if it’s above the guaranteed rate.
    However, if an annuity's rate drops significantly, it usually means interest rates in general have dropped; and newly issued fixed annuities are likely to be paying at comparable rates to the one you’re giving up.
    And if you transfer your money to a different type of investment or keep the cash, and you’re younger than 59½, you will probably have to pay a 10% premature withdrawal penalty on the amount of taxable earnings you surrender, plus whatever taxes are due on your earnings. If you withdraw only part of the accumulated contract value, the federal government considers that you take earnings first, leaving the principal in the contract. That means you could pay tax on the entire withdrawal amount.
    http://www.annuity-strategies.com/fixed_annuities.html

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  17. #21

    Default Re: The Great Annuity Rip-Off

    Mr. Spicuzza's universe

    http://www.websitetoolbox.com/tool/mb/thetrustgroup

    Intentions and agendas revealed and illuminated

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  19. #22

    Join Date
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    Default Re: The Great Annuity Rip-Off

    Quote Originally Posted by SkyPilot View Post
    Mr. Spicuzza's universe
    http://www.websitetoolbox.com/tool/mb/thetrustgroup
    Intentions and agendas revealed and illuminated
    Oh you are evil SkyPilot!

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  21. #23

    Default Re: The Great Annuity Rip-Off

    Hmmmm, where should I start?

    Do you want to have an intelligent discussion on annuites or NOT?

    Do you actually want to know the differrence between a Traditional Fixed Annuity, a Fixed Indexed Annuity, an Immediate Annuity or a Variable Annuity and who sells what or NOT?

    This site has a forum titled Retirement Planning and under that there is a sub-forum titled Annuities. It's my guess that's where postings on annuities should placed.

    Okay, where was I?

    SkyPilot wrote:
    This link provides a list of companies that sell Variable Annuities, most of them being insurance companies
    SkyPilot ONLY an INSURANCE COMPANY and a Licensed Insurance Agent can sell ANY annuity. PERIOD. END of STORY.

    A specific type of annuity known as a VARIABLE annuity are SOLD by stock brokers who HAD to get an insurance license to be able to sell the infamous bloated pig with lip stick known as a VARIABLE annuity.

    INSURANCE AGENTS DO NOT SELL VARIABLE ANNUITIES. VARIABLE ANNUITIES ARE SOLD BY STOCK BROKERS.

    The first thing that has to be understood here is that VARIABLE annuities and FIXED annuities ARE TWO COMPLETELY SEPARATE PRODUCTS LINES and they are sold independently by competing financial services sectors.

    SkyPilot wrote:
    Most fees and expenses of a fixed annuity are factored into the stated annual percentage rate the investor is quoted. The rate quoted is the rate paid. Fixed annuity fees and expenses generally cover the insurance company's administrative expenses, the cost of offering the annuitization guarantee and profits to the insurance company and sales agent. Some fixed annuities may assess an annual contract fee, typically around $30.
    In "other" words traditional FIXED annuities pay a FIXED interest rate declared by the issuing company each and every contract year and that rate is guaranteed for that contract year.

    There are no "Fees and Expenses" in a FIXED annuity charged against the client's cash value. Would you like me to post a typical annual statement to prove this?

    I'll say it AGAIN, FIXED annuities ARE NOT Variable annuites.

    SkyPilot wrote:
    And if you transfer your money to a different type of investment or keep the cash, and you’re younger than 59½, you will probably have to pay a 10% premature withdrawal penalty on the amount of taxable earnings you surrender, plus whatever taxes are due on your earnings. If you withdraw only part of the accumulated contract value, the federal government considers that you take earnings first, leaving the principal in the contract. That means you could pay tax on the entire withdrawal amount.
    The above paragraph is True and False.
    Partly correct and partly wrong.
    And if taken as a whole it's absurd and really has NOTHING TO WITH ANNUITIES IN PARTICULAR.

    The 10% penalty prior to age 59 1/2 is an IRS penalty that's accessed on ALL qualified and non-qualified pension plans. You can however by way of what's known as a 1035 exchange transfer your money from/to any other annuity TAX FREE.

    Annuities are taxed LIFO, Last IN (interest) First OUT (interest)

    Now since the vast majority of FIXED annuity premium is invested by Seniors typically over the age of 70 withdrawals prior to age 59 1/2 is absurd.

    SkyPilot wrote:
    Intentions and agendas revealed and illuminated
    Really?

    On post #2 of this thread SkyPilot asked:

    Bet you sell these things, huh?

    I answered him on post #3 of this thread:

    Yes, I have been selling Fixed Annuities, Life Insurance, Disability Income, Medical Insurance and Long Term Care Insurance since 1985 along with comprehensive Estate Planning and the funding of Irrevocable Life Insurance Trusts with Second-to-Die policies.

    Thank you for asking.

    Did you have a question regarding something written in THIS article you would like for me to answer?

    By the way, click HERE to read exactly correct information from Charles Schwab.
    ChemEng wrote:
    Quote:
    Originally Posted by GarySpicuzza
    There is ZERO costs in a FIXED ANNUITY.
    In dollars and cents that would be written $0.00.

    This is, at best, an attempt to deceive and, at worst, a flat out lie.
    ChemEng please post who's the insurance company and the product name of a FIXED annuity that charges annual fees and expenses against a client cash value each and every year.

    There are ZERO, NADA, NIL, NONE.

    Traditional FIXED annuities and FIXED Indexed annuities ARE NOT Variable Annuities.

    Now there are INCOME ACCOUNT riders that can be added on FIXED indexed annuities. The insurance company will then guaranteed the LIFETIME INCOME ACCOUNT to grow at 6% per year and then will base the payout on the the GREATER of the Actual Account Value or the INCOME ACCOUNT. The typical annual fee for that feature is 4/10 tenths of one percent AND IT'S RARELY ADDED.

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  23. #24

    Default Re: The Great Annuity Rip-Off

    Let me remind you what you said first:
    Quote Originally Posted by GarySpicuzza View Post
    There is ZERO costs in a FIXED ANNUITY.
    In dollars and cents that would be written $0.00.

    Now look at what you are claiming:
    Quote Originally Posted by GarySpicuzza View Post
    ...that charges annual fees and expenses against a client cash value each and every year.

    See how they arent the same (again)? More mindless salesperson double talk.

    When you're in a hole, it's best to stop digging.

  24.  
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