annuity ????

[mikieb]

I'm 53 y/o

I have 100K in various tax deferred accounts. 401k/IRA. It's spread out over 4 different accounts.

I was thinking on consolidating all my money into a fixed indexed annuity, and post it with Nationwide New Heights 12.

I do not need the money, And can put this aside for the next 15+ years with out a problem. This is the whole amount of my tax deferred holdings. My other holdings include a house and land with a total value of 250K or so.

I'm sill working, in good health and see no problem with putting away another 150-175K before I reach 67.

My thinking was... I got this 100K built up... I want to take this off the gambling table and put it aside in a safe place so it is there in 15+ years from now. I got my as s handed to me in the last stock market crash and would like to make it safe.

When it is time to remove the money I would set this account up to meet the RMD needs each year for 20 years to keep me legal with the IRS.

Nationwide New heights 12 cost 1%/year and is tied to the S&P 500 composite price index.

Your thoughts ? Maybe you have been a victim of annuity?? Should I just roll it all over into a Vanguard IRA account and buy an indexed account ??

If I could convert it into land somehow... I would in a heart beat.

 

[TXinTN]

I'm no expert, but paying 1% for the s&P500 is way too much. I'd say you are giving up a lot to get the security an annuity brings, especially with a 15yr timeline.

Your last idea of a vanguard IRA is what i would go with. Easy diversification and very low cost.

I'm pretty sure there's a way to buy land within an IRA, but never looked into it specifically. Lack of diversification would be a concern for me.

A fee based adviser that doesn't make their money pushing funds/annuities is probably the best way to get unbiased advice.

 

[VikingsGuy]

Low cost Vanguard S&P500 or retirement target funds are much lower cost, and way better bets. Also, I don't like long term annuities as you are betting the company will remain solvent for a very long window with out benefit of any type of deposit insurance -- a bet that is not always a great one.

 

[RobG]

Annuities are already tax deferred so they are generally for money not already inside a tax deferred account. Because of fees they aren't considered a great way to make money, unless you are the advisor selling them. If you go with Vanguard, in addition to the normal high quality mutual funds you can open a brokerage account and buy CDs for safety.

The Vanguard S&P index only costs 0.04%/year. 0.04% will add $30-50k over 15 years compared to your 1% fee. Instead of an annuity, a popular simple strategy is to keep "your age" in something safe (CDs or bonds) and the rest in an S&P index. For example, you would start out with 53% CDs/bonds, 47% S&P. Next year you would rebalance to 54% CDs/bonds, 46% S&P, etc. It doesn't have the safety of an annuity, but is another option that is very likely to pay more. Unfortunately, you can never have both safety and good return. Even annuities can take a big hit if there is inflation.

 

[VikingsGuy]

Annuities are already tax deferred so they are generally for money not already inside a tax deferred account. Because of fees they aren't considered a great way to make money, unless you are the advisor selling them. If you go with Vanguard, in addition to the normal high quality mutual funds you can open a brokerage account and buy CDs for safety.

The Vanguard S&P index only costs 0.04%/year. 0.04% will add $30-50k over 15 years compared to your 1% fee. Instead of an annuity, a popular simple strategy is to keep "your age" in something safe (CDs or bonds) and the rest in an S&P index. For example, you would start out with 53% CDs/bonds, 47% S&P. Next year you would rebalance to 54% CDs/bonds, 46% S&P, etc. It doesn't have the safety of an annuity, but is another option that is very likely to pay more. Unfortunately, you can never have both safety and good return. Even annuities can take a big hit if there is inflation.

I agree with RobG's advice, and add that the Vanguard retirement targeted funds do the "age balancing" he explains for you with out having to tweak them every few years manually.

 

[Goatshoes]

1%? Ouch! You can get VOO (Vanguard 500 Index Fund) for .04%

 

[Brittany Chukarman]

Vanguard Target funds also have international exposure which has been a good thing to have lately and a low expense ratio of .015 -.016.

 

[utahminer]

I'm pretty sure there's a way to buy land within an IRA, but never looked into it specifically. Lack of diversification would be a concern for me.

it is possible, but there a LOT of ways to get yourself in to trouble. I have looked into it as well as fairly wealthy relatives and we have all come to the conclusion that the hoops can be extensive and the risk of something going wrong out weigh the opportunities.

 

[Schaaf]

Savings schmavings. Go get a Stone Sheep.

 

[mixedbag]

That's right schaaf!!What if you die at 66.Then you saved all that for your wife's next husband,lol.Go live life!!
The sensible side of me say go vanguard though.But a stone sheep hunt would be nice

 

[maxx]

First don't take money advice from a bunch of guys on a hunting forum me included.

Personally I wouldn't take the money out of play if you want to work another 15 years. If you said that number was less than 5 then I would start to think of safer investments but you have a long time. If it cuts in half in the next 6 months so be it, history shows it will comeback and typically stronger.

FYI there are companies out there that allow you to roll 401K's, etc into an IRA that you can then purchase land with. One of the companies I have looked at is Equity Trust. I have thought about it. It is a safer investment but it has more of a ceiling. I want land but I want it as a part of a bigger pool of investments. I wouldn't want it as my only. History shows it wont go down much but that doesn't mean it cant.

 

[wolfpup]

Every situation is a little different but here are my .02.

Consolidate your 401k / IRA to a single account. Then manage that one account. I have not encountered an IRA or 401k that you can't decide how to allocate those funds. By consolidating those accounts (assuming there is no tax rule or issue from the broker ) (consult your CPA) you will pay lower annual fees.

Land is harder to purchase through and IRA, but why buy land? It will not have an annual appreciation in most situations. The stock market has been good the last few years and as long as you don't panic on a down turn and sell, it will bounce back. If you want land, buy it personally unless it is rent-able and will produce annual cash flow. The 401/IRA will produce annual income so why tie up those funds that will produce cash flow with a product that won't?

 

[maxx]

Every situation is a little different but here are my .02.

Consolidate your 401k / IRA to a single account. Then manage that one account. I have not encountered an IRA or 401k that you can't decide how to allocate those funds. By consolidating those accounts (assuming there is no tax rule or issue from the broker ) (consult your CPA) you will pay lower annual fees.

Land is harder to purchase through and IRA, but why buy land? It will not have an annual appreciation in most situations. The stock market has been good the last few years and as long as you don't panic on a down turn and sell, it will bounce back. If you want land, buy it personally unless it is rent-able and will produce annual cash flow. The 401/IRA will produce annual income so why tie up those funds that will produce cash flow with a product that won't?

I agree on the land some as I wouldn't want 100% of my investment tied up in it.

I do think in general it does appreciate, the old adage they aren't making anymore. The richest folks I know are typically land guys.

It seems to be a good plan to have some of your investment dollars tied up into it. Here in Iowa if you can find the right plot of ground you can typically get about 3% return annually on it via CRP or rental. Ya terrible compared to what the stock market has done over the last few years but you get the ground to use, some money to help pay it and in general it has typically gone up over the years.

 

[Gr8bawana]

First don't take money advice from a bunch of guys on a hunting forum me included.

^^^This^^^

 

[Brittany Chukarman]

I'll read what others have to say and make up my own mind before I ever trust another scum-sucking investment "expert" ever again.

 

[mixedbag]

^^^^^,I had one of those scum ducking scumbags once.He was the only one making money on my money.I took it all away from him and have been soaring ever since.Watch who you trust with your money!!!!

 

[Phaseolus]

Interesting to hear that people lost their butt’s in mutual funds in 2008. If you had stuck to it that money would be worth triple now. It will tank again, and rise again.

 

[Falcon75]

in my former life i was an investment advisor and insurance agent. i shiver when i hear do anything with all of something. i also hear that want to take risk off. i would think of having different buckets and put money in each one. you say dont need money for some time so leave in market, but annuities can be a good tool if you find the right one for the job you are doing. a hammer can fix anything but not always in the best way. i put dad in one with 30 percent of his funds before the last crash and he had no downside and got 70 percent of the upside of SP500. He said it was best move when things crashed. His account didnt lose anything and only went up as markets recovered so his gains were on 100 of what he had in account as opposed to starting at 60% of what he had.
You can hold property in an IRA account. Fees are higher and i don't know if you can benifit from it but hey if you can get a new mexico ranch with a landowner tag well that would be something to look at with an independant investment advisor who has experience with this.

 

[idnative1948]

Interesting to hear that people lost their butt’s in mutual funds in 2008. If you had stuck to it that money would be worth triple now. It will tank again, and rise again.

Didn't lose my butt, but took a hit. All healed up for now.

 

[tim629]

i'm a young guy (29) but what I'm hearing is:

I have 100K in 4 spots that I want to put into safe keeping while I make my next 100K....

why mess with the current accounts? just invest the next 100K in some different places than the last 100K.

you are talking 15 years so I'm going to assume that the market WILL tumble in that time, but it will also come back. as you get closer to that target maybe put your new investments into safer investments but you have a lot of time to make up and lose ground without it hurting in the end