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Thread: The Great Annuity Rip-Off

  1. #49

    Default Re: The Great Annuity Rip-Off

    Quote Originally Posted by GarySpicuzza View Post
    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.

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  3. #50

    Default Re: The Great Annuity Rip-Off

    ChemEng, I'll get to your inflation point when I get to it.

    Okay, where was I?

    Ah yes, moving on to Fixed Indexed Annuities.

    Let's first start with an actual client statement. The particular product below paid a 7% up-front premium bonus [Strings and Surrender Charges Attached] and the client received 16.54% indexed interest. He started out the year with $26,628 and ended the year with $33,207. A $6,579 total gain or 24.71%.

    Now it doesn't take a financial genius to figure out why these products are so popular. Even a Self Appointed Financial Expert (SAFE) can understand the ability to particpate in "SOME" of the gains of the stock market without risking one penny of principal is a compelling situation. The absolute worst thing that could happen to a client's money would be 0% interest credited if the market was flat or went down but with ALL principal SAFE and sound.

    Are there any questions about what Ms. Lankford wrote in her article about indexed annuities versus the facts?

    What I find most interesting is comparing her words against Charles Schwab's. How on Earth can they be talking about the EXACT same product line?

    Click HERE

    I couldn't have said it better myself, Chuck.



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  5. #51

    Default Re: The Great Annuity Rip-Off

    Quote Originally Posted by GarySpicuzza View Post
    ChemEng, I'll get to your inflation point when I get to it.


    The problem isnt the reduced upside of these products, its their associated risks (which do include inflation). AND JUST BECAUSE YOU CHOOSE NOT TO ADDRESS THESE RISKS DOESN'T MEAN THEY DON'T EXIST.

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  7. #52

    Join Date
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    Arrow Re: The Great Annuity Rip-Off

    Quote Originally Posted by tsptalk View Post
    I agree, if Gary is here to sell us any products, we have a problem. Although skeptical at first, I found his original posts somewhat informative and thought it would helpful to others. But I knew if there was any talk of products he is selling, he would be breaking the TOS.

    The question is, did he bring it up, or did our members? I'll have to read some old posts to see.
    I also found his posts informative. But, if he doesn't have a TSP account, his motives for posting should be brought into question since he does sell annuities.

    He should have a TSP account (perhaps he does), or at the very least an option available to establish one. If not, then why is he really here?
    "Treat your wife with honor, respect, and understanding as you live together so that you can pray effectively as husband and wife." 1 Peter 3:7

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  9. #53

    Default Re: The Great Annuity Rip-Off

    annunities are good for people that want consistancy. If you want to know exactly what you will be getting, then its a great move. The thing you give up is the potential upside. Althought the market has had bad times, over time it goes up 6-8% annually. I would rather take the chance to make more money and do it on my own instead of an annunity.

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  11. #54

    Unhappy Re: The Great Annuity Rip-Off

    Don't Feed The Need and It'll go Away. TSP or Not. After Googling his
    name and reading other Forums, Kiplingers etc.... One might think that
    he thrives on contoversy and feeds off the attention like a bear in a
    honey jar before winter. "Don't Feed The Animals"


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  13. #55

    Default Re: The Great Annuity Rip-Off

    Before I move on to Immediate Annuities then last and least Variable Annuities I'll address ChemEng points which are a valid issue of discussion.

    ChemEng wrote on post #38:
    Are you serious? Your 3% fixed annuities are about 25% lower than *todays* inflation rate... Right out of the gate your products are loosing value for your customer.
    ChemEng followed on post #40:
    Wrong. The graphic you posted here exposes your client heavily to inflationary risk. Repeating myself again, your 3% annuity is about 25% less than todays inflation rate. This means your client is loosing value right out of the gate.

    Address this issue before your try to move the conversation forward with more non-sequitur comments.
    ChemEng again on post #51 wrote:
    The problem isnt the reduced upside of these products, its their associated risks (which do include inflation). AND JUST BECAUSE YOU CHOOSE NOT TO ADDRESS THESE RISKS DOESN'T MEAN THEY DON'T EXIST.
    ChemEng is attempting to make a point about SAFE money savings instruments, that because of inflation, a person would be better off financially to have their money at risk with investments the stock market.

    Once again a picture is worth a thousand words.

    The graphic below depicts what happens to $100,000 when the market goes down.

    What would happen with the same $100,000 in a FIXED Indexed Annuity.

    What would happen with the same $100,000 in a Traditional FIXED annuity.

    The second graphic shows the impossible gains one would have to recieve in the market to just keep even with a SAFE money savings instrument just limpimg along at 5% per year.

    Tell me something ChemEng....
    How well does a 25% loss of principal keep up with inflation?

    Best regards.




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  15. #56

    Default Re: The Great Annuity Rip-Off

    Quote Originally Posted by GarySpicuzza View Post
    Tell me something ChemEng....
    How well does a 25% loss of principal keep up with inflation?
    No--The question on the table was how does the 3% fixed annuity that *you* a "SAFE" investment in a 4% inflation environment? Somehow in that mess of a message, you managed to avoid answering that simple question...

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  17. #57

    Default Re: The Great Annuity Rip-Off

    Quote Originally Posted by ChemEng View Post
    No--The question on the table was how does the 3% fixed annuity that *you* a "SAFE" investment in a 4% inflation environment? Somehow in that mess of a message, you managed to avoid answering that simple question...
    In addition to ChemEng question, I have one. And no I am not interested in purchasing, but I would like to know how you make your money. Do you get a percent of what you sell? How are you compensated for your efforts?

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  19. #58

    Default Re: The Great Annuity Rip-Off

    G-fund.... 10 year compounded annual return is 5.12% and is totally liquid for the account holder in retirement.

    For the TSP participant, any annuity would likely:
    -produce less income than even the G fund
    -include built in inflation exposure
    -rob their estate of the capital investment

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  21. #59

    Default Re: The Great Annuity Rip-Off

    ChemEng, your inflation argument pointed toward a traditional FIXED annuity which is a SAFE money savings instrument is absurd.

    I thought I made this point relatively crystal clear with the graphic I posted but I have obviously failed.

    If three (3) separate people had each invested $100,000 on Aug 31, 2000:

    One directly in an S&P 500 index fund;
    One in a Fixed Indexed Annuity;
    On in a Traditional FIXED annuity:

    On Aug 31, 2001, S&P 500 indexed fund would have been worth $74,690.

    The Fixed Indexed Annuity would have been worth $100,000.

    The Traditional FIXED annutiy would have been worth $105,000.

    Yes, I know, the market will come back, it always does.

    E - v - e - n - t - u - a - l - l - y.
    Maybe?

    The market would have to return 17.6% for the next 3 years just to stay even with a SAFE money savings instrument that's just limping along at 5% per year.

    Now for a rhetorical question:

    If YOU were the investor in S&P 500 indexed fund who lost 25.31% of his money and now only has $74,690 left would you like to trade places with the person who was in the Fixed Indexed Annuity who still has her $100,000 SAFE and sound?

    For those of you who just can't seem to wrap your head around why $$$-BILLIONS-$$$ of dollars are poured into Fixed and Fixed Indexed Annuities each year it's because of the Safety of Principal aspect that is inherent in ALL annuities EXCEPT the infamous bloated pig with lip stick our stock broker competitors love to sell known as a Variable Annuity.

    By the way, did I post a graphic on what type of returns a client may get in an up cycle year in a Fixed Indexed Annuity WITHOUT risking one penny with day traders playing stocks like a flea market swap meet....with your money.

    See graphic below:



    wv-girl asked:
    In addition to ChemEng question, I have one. And no I am not interested in purchasing, but I would like to know how you make your money. Do you get a percent of what you sell? How are you compensated for your efforts?
    wv-girl, Insurance Agents are paid a commission on each and every form of insurance they write. The insurance companies have a problem when it comes to agent commissions on annuities.

    They have to pay an agent about the same amount of money for about the same amount of time and effort spent the agent would have earned anyway by simply selling other forms of insurance.

    If you are wanting to know what the averages are, the "average" annuity writing agent commission is 5% paid ONE-TIME-ONLY and the average annuity premium is $40,000.

    On "average" I make way more money with life insurance and long term care than I do with annuities but the news media loves to pay attention to annuities. I guess it's because it's simple math.

    They must get hung up on figuring 90% first year commission and 10% renewals on Long Term Care Insurance or 105% target commission for life insurance. But if you did the math you'd find the agent made on a $4,000 annual premium for LTCi, $3,600 first year commission and $400 renewal commission every year the policy stays inforce and renews.

    I just wrote a $3 million dollar, Second-to-Die Life Insurance policy to fund an Irrevocable Life Insurance Trust and the "target premium" was $35,000.

    Do the first year commission math on that, then let's talk about the chump change that's paid on annuities.

    Do you understand now the point I made above about how the insurance companies HAVE A PROBLEM when it comes to agent commsissions on annuites?

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  23. #60

    Default Re: The Great Annuity Rip-Off

    Quote Originally Posted by GarySpicuzza View Post
    ChemEng, your inflation argument pointed toward a traditional FIXED annuity which is a SAFE money savings instrument is absurd.
    So why dont you answer the question directly then?

    The question on the table is how is the 3% fixed annuity that *you* sell a "SAFE" investment in a 4% inflation environment? Somehow in that mess of a message, you managed to avoid answering that simple question...

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