Funding Your Retirement With An Annuity...Does It Make Sense?

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  • Опубликовано: 27 авг 2024

Комментарии • 113

  • @paulbrungardt9823
    @paulbrungardt9823 Месяц назад +3

    My boss is a multimillionaire. He says : " Never buy anything from someone who comes to you, to sell you something." He is there for his benefit, Not Yours !

    • @joannalasoka4513
      @joannalasoka4513 15 дней назад

      Then how did your boss make all his millions ?? Certainly by selling something to people, whatever it is

  • @eliz55555
    @eliz55555 Год назад +11

    Finally a thouroughly explained video, with actual numbers run, thank you! I watched so many videos and I still didn't know what the heck an annuity was. But now I finally do - thank you, thank you!

  • @jdgolf499
    @jdgolf499 Год назад +6

    Another point you touched on later. Annuities are guarenteed by states. In Michigan, anything up to $250,000 is protected. Also, if an insurance company goes under, another company will most likely pick it up, as they will make money. The money used to purchase an annuity has specific government rules on how it can be invested, so badically, the money will be available. Even if an insurance company goes under, the annuities funds will be protected, as they are probably invested in 10 to 30 year treasuries, which if you watch, fixed rate annuities generally follow those yields.

    • @MoneyStrategiesSOULutions
      @MoneyStrategiesSOULutions Год назад

      Yes much safer then with a bank. Banks goes under constantly.

    • @PNdebt-hc2tg
      @PNdebt-hc2tg Год назад

      @@MoneyStrategiesSOULutions You people are nuts...trust the market. The insurance companies make huge fees and commissions and then put your money into the market. Don't be a fool.

    • @MoneyStrategiesSOULutions
      @MoneyStrategiesSOULutions Год назад

      @@PNdebt-hc2tg the banks/stock co' makes more money on fees fyi. Special products from insurance co's also give much more return than banks, and has to be 100% liquid, so you won't loose. FDIC only back up $250K! But FDIC can't bail out every bank. This is a fact.

    • @PNdebt-hc2tg
      @PNdebt-hc2tg Год назад

      @@MoneyStrategiesSOULutions Not true. Your safest place is the S and P 500 over time. Remember you have to beat inflation? Consumers don't know how to separate their banking, investing and insurance needs. People like you don't help...

    • @bobbycoln5626
      @bobbycoln5626 Год назад +1

      @@PNdebt-hc2tg Take some classes on Annuities. There are NO fees attached to Annuities only surrender charges if you get out early.

  • @mgallegos4708
    @mgallegos4708 8 месяцев назад +5

    The more I think about putting an annuity in place the less inclined I am to do so. Reason: the lifetime income is not enough to make it make sense. Insurance companies sure hedge their bets and don’t care if it’s enough money for the client.

    • @tombolo4120
      @tombolo4120 7 месяцев назад

      That's right. Consider that health care (US) isn't what it's cracked up to be - like cancer, they make nothing with a cure. Since we don't know who's behind our current health care debacle, is it wise to trust anything based on longevity ?!

    • @billyjohnson9166
      @billyjohnson9166 2 месяца назад

      Another reason there a high commissioned product

    • @joannalasoka4513
      @joannalasoka4513 15 дней назад

      @@billyjohnson9166 not surprised

  • @jdgolf499
    @jdgolf499 Год назад +5

    I am commenting at about 4:30, so maybe this will be discussed later. Unless you are single with no beneficiaries or you don't want to leave anything to someone, you should NEVER do a straight lifetime annuity, or term certain. If you have a spouse or beneficiaries, you should do a joint lifetime with term certain. This is what I bought with my lump sum pension. It is guarenteed for as long as either me or my spouse is alive. It is a 20 year certain, so if we both die before 20 years, our beneficiaries will continue receiving payments until 20 years has elapsed. Will always get money back, plus about 2% over 20 years. The real benefit comes after the 20 year period. That's why it's an insurance policy!

  • @grneal26
    @grneal26 Год назад +7

    seems like a high yield savings account would be a better option in most cases.

    • @elvisisalive2716
      @elvisisalive2716 7 месяцев назад

      but no creditor protection and not a great way for estate planning. Depends if you have family

    • @billyjohnson9166
      @billyjohnson9166 2 месяца назад

      Bingo your correct.

  • @claudia-vp1kd
    @claudia-vp1kd 13 часов назад

    Short and sweet. Thanks 👍

  • @tedharman5354
    @tedharman5354 2 года назад +4

    Hi Adam,
    One of the big things to consider when looking at annuities is the health of the individual. Insurers will do medical assessments of clients and possibly raise the age of the annuitant, thereby increasing the benefit they receive from the annuity.
    Enjoy your videos, keep up the great work.

    • @urbanart7325
      @urbanart7325 Год назад

      Yes payment is based on mortality. Interest rate plays a partial role

    • @tedharman5354
      @tedharman5354 Год назад +1

      @@urbanart7325 If you have a medical problem which could shorten your life expectancy, insurers will do an ‘age-rating’ process which can have a very favourable impact on the payout from the annuity.

    • @johnroberts850
      @johnroberts850 Год назад

      Zrc😢yiug

  • @skwira000
    @skwira000 Год назад

    So I would say one benefit of a Term Set Annuity is if you put off social security until 70 1/2. Use that from 62 to that age and then take social security and then you can get lower payments after social security kicks in. I don't want to do it this way for myself, but I can see it being useful that way.

  • @photoMorg
    @photoMorg 4 месяца назад +1

    its now protected to 5000K

  • @mohtelrob9840
    @mohtelrob9840 2 года назад +3

    Hey Adam, now that interest rates are increasing does this strategies make more sense? The other question would be , Is this strategy used as another source of guaranteed income? Thanks enjoy your videos. You speak in easy to understand language.

    • @YouTubeComments
      @YouTubeComments Год назад +2

      Would also love to hear an answer to this question with 5% interest rates today...

    • @designertjp-utube
      @designertjp-utube Год назад

      @@RUclipsComments Wow. If it's true we're approaching 5% Interest Rates at Centralized Bank these days, then maybe it's due time to break out with some *CDs* like My Granny used to have.

    • @martik778
      @martik778 Год назад +2

      @@designertjp-utube Motive has up to 10 year GIC's at 5.1 to 4.95%

    • @martik778
      @martik778 Год назад

      @@RUclipsComments Depending how long you live. You'd have to live past 90 to get over 3% returns with an annuity

  • @Aarya-Indya
    @Aarya-Indya 7 месяцев назад +1

    Hi Adam, can you please do a comparison of RRIF vs annuity for your RRSP

  • @mjmf1430
    @mjmf1430 6 месяцев назад

    My annuity earns me around 5.5% annual return (pay out after 1 year of joining) and forms only 16% of my overall investment portfolio. It is a stable and guaranteed dividend income, it’s good for those who want a stable dividend income foundation so that they can take more risk with their other investments. And my annuity principle is not only protected to be passed my nominee should I pass away, it also increased in value by a percentage after the 7 years break-even period. The catch is the surrender fee which is very high before the 7 year period.

    • @danielleg2616
      @danielleg2616 6 месяцев назад

      Are annnuties monthly payments or a just a lump sum you can take out at the end after the principal accumulated interest?

    • @georgemarsilio5122
      @georgemarsilio5122 5 месяцев назад

      what's a surrender fee

    • @billyjohnson9166
      @billyjohnson9166 2 месяца назад

      What a mistake your making a high commissioned product

  • @urbanart7325
    @urbanart7325 Год назад +1

    Income is not based on interest rate. SPIA or DIA payment depends on longevity. MYGA is pure interest rate. You don't understand annuities

    • @michaeleldridge5640
      @michaeleldridge5640 11 месяцев назад

      income is based of interest rates. The insurance company needs to invest the money you give them so they can provide you with lifetime income. They mostly do this with fixed income products. So when interest rates are high they can offer better payouts. compare payouts from 4 years ago compared to now. But you are right that age of the customer is a huge factor.

  • @JasonPike-el2tx
    @JasonPike-el2tx Год назад +3

    if you need income in retirement then you need annuities. simple as that. so who doesnt need income in retirement? no one. Annuity doesnt care how rich or poor you are, again if you need income in retirement then you need an annuity. discussion over.

    • @PNdebt-hc2tg
      @PNdebt-hc2tg Год назад +1

      That's a F'ed up statement. Are you serious? There are any number of ways to buy broad market mutual funds and have a structured payout when you need it. Please stop misleading people for your own gain.

    • @vmobile890
      @vmobile890 9 месяцев назад

      Board market mutual funds doesn’t mean anything to me . I haven’t worked with buying storks or other endless suggestions and worked with advisors than don’t have the time to explain like Dave Ramsey says . Their attention span and patients ends at 45 to 60 minutes . Even with big companies like Fidelity their sales people . Im going have just to do CD’s .

  • @bobbycoln5626
    @bobbycoln5626 Год назад +3

    You are talking about Annuitization of an Annuity, getting a lifetime income from it. You are basically setting it up like a Pension plan. Many different ways to Annuitize your Annuity. You don't have to annuitize an Annuity to enjoy the benefits of the Annuity. Very few people ever Annuitize their Annuity. Why Annuitize it when you can take the interest each year and preserve the Principal to pass on to your heirs? The difference in what you receive from annuitization and just pulling the interest is minimal. When you annuitize, you lose control of the Principal.

  • @nickwade9467
    @nickwade9467 2 года назад +3

    Hi Adam,
    I have been curious about annuities and this segment covered most of those questions, so thank you. I just have one other question and sorry if it was covered and I missed it. Question: if you convert your RRSP to an annuity is it a tax sheltered transaction or will the balance of the transaction be added to your income? Thanks Nick

  • @dino0228
    @dino0228 Год назад +1

    What are tax implications vs CD?

  • @JohnDoe-pe6iu
    @JohnDoe-pe6iu Год назад +2

    Hello - What are your thoughts on Allianz Benefit Control ABC - Fixed Index Annuity? Thanks.

    • @dels2360
      @dels2360 Год назад

      Allianz is one of the highest-rated annuities. You might also look into athene, or sagicor. There are plenty more but those are my favorites so far. Pretty good rates of returns but you still want to look at their bonuses and strategies to ensure you pick the proper one for you.

    • @suebowman7258
      @suebowman7258 Год назад

      I am looking into this for my parents

    • @JohnDoe-pe6iu
      @JohnDoe-pe6iu Год назад

      @@suebowman7258 I am looking into it for myself. Would you be interested in brain storming? I have been gathering some information and want to make the best decision.

  • @hkim9151
    @hkim9151 Год назад +1

    What if insurance company file chapter 11 bankruptcy, just like some of the banks in today’s market ???

    • @jofujino
      @jofujino 11 месяцев назад

      Then in line for what's left you are behind the secured bond holders, tied with the non-secured bond holders, but ahead of the stock holders. Maybe you'll get pennies on the dollar for whatever you're owed. Thus, I totally agree with the video that it doesn't make sense for 99% of people. Retirees need to diversify. Holders some in bond index funds. Hold some in broad index funds with a proven track record like the S&P500, and hold some in real estate. Not only will you get better long term returns, but the better returns will also help protect you from inflation (trusting a static annuity to keep you secure in a potentially high inflation environment is risky too).

  • @allans7281
    @allans7281 Год назад +1

    Are these insurance companies insured like FDIC in case they’re insolvent
    Are you protected against the company not being around in the future

    • @ParallelWealth
      @ParallelWealth  Год назад

      Most, if not all are. But do your due diligence as always.

    • @keithbidne3068
      @keithbidne3068 Год назад

      Insurance companies are held to stricter standards than banks, thankfully. There is a reserving system each insurance company follows to insure the money is there in case there is a mass withdrawal. If you put $250,000 cash in the bank savings account they can use your money as an asset and loan out up to 7 times that principal. Insurance companies need to have the cash on hand. If an insurance company does happen to become insolvent, they go into receivership until another larger Insurance company takes them over, keeping the policyholders intact. This happened a few times in the 1980's when interest rates were at an all time high and then came back down to reality. a few of the companies that overpromised obligations got into trouble. Its largely rare that an insurance company is insolvent due to all the new regulations.

  • @629990
    @629990 2 года назад

    The return as stated is less relivent for me than the relative income generated by each approach.. I look at what is my annual payout for X dollars in capital in an annuity and compare that to the annual payout if that same amount was put in a RRIF. Or rather what annual return do I need from a RRIF net of fees to get the same income as an annuity with the same initial value for life or age 95 to be conservative.
    If I want to leave an inheritance I perfer tax wise to use joint last to die insurance which has the advantage of not being subject to income tax unlike estate assets usually will end up taxed at the highest marginal rate.

  • @arinco6944
    @arinco6944 Год назад +1

    Yes annuities at today’s good rates make sense. I have never seen payout rates so high in 2022.

  • @jungroe94
    @jungroe94 5 месяцев назад

    Thanks, great videos in your channel, learning a lot. If I purchase a deferred annuity today, say deferred for 4 years from now, is the interest rate locked into todays rate, or will the payout in 4 years be based at whatever the interest rate is at that time?

    • @ParallelWealth
      @ParallelWealth  4 месяца назад +1

      Typically today's rates.

    • @jungroe94
      @jungroe94 4 месяца назад

      @@ParallelWealth Thank you.

  • @govinda102000
    @govinda102000 9 месяцев назад

    Someone at my bank was trying me to start a Jackson IRA Roth annuity. It would be after tax investment. How is this different? He stated the principle would be safe but it could grow in interest since it is invested in funds.

  • @christinee8353
    @christinee8353 9 месяцев назад

    Retired here at 55 and drawing down RRSPs early and delaying cpp / oas. However, pulling 50k a year while having a dividend portfolio in non registered is putting me into a higher tax bracket. Would a non registered annuity not help with reducing the taxation (including OAS clawbacks later on in life)?

  • @martik778
    @martik778 Год назад

    Is there strategy or product that will spread your RRSP over several institutions to ensure 100% of your money is covered by CDIC? ie: A 1M RRIF would require you to deposit to 10 institutions. I guess you could also deposit it into a Manitoba credit union which is supposedly guaranteed by the province.

  • @bRIZZAd
    @bRIZZAd Год назад

    With tontine based investment options now surfacing in Canada (Longevity Income Pension - launched June 2021, and now Guardian Capital launched some in Sept, 2022)... I'd like to know your thoughts on what this means for Canadian retirees in the future. Especially those without a defined benefit pension (only RRSP/TFSA). While I think we need some time to watch how their distributions work out in various states of the market and how that compares with their forecasts... they seem to have a lot of potential for solving part of the retirement decumulation challenge for many people, especially when compared to some of the downsides of an annuity.

    • @ParallelWealth
      @ParallelWealth  Год назад +1

      Brad, working on a video around this.

    • @bRIZZAd
      @bRIZZAd Год назад

      @@ParallelWealth Awesome! Look forward to it. It is an interesting option and Canada appears to be leading the charge in resurrecting it as an option. With our aging population and the amount of boomers entering retirement daily... we can always use more options!

    • @bRIZZAd
      @bRIZZAd Год назад

      @@ParallelWealth Still waiting! :)

    • @martik778
      @martik778 Год назад +1

      @@bRIZZAd me too, meanwhile we can get 5% 10 year GIC's!

  • @alcarlay
    @alcarlay Год назад

    where do you get 7 percent payout?

  • @billyjohnson9166
    @billyjohnson9166 2 месяца назад

    They don’t make sense and they never made sense. Ask Dave Ramsey

  • @fordhamdonnington2738
    @fordhamdonnington2738 Год назад +1

    My brother got an annuity from life insurance and it's costing him 2k per year. I think he screwed up. He said the life ins guy "talked him into it". What can he do?

    • @PNdebt-hc2tg
      @PNdebt-hc2tg Год назад

      He did.. But the salesman is happy!

  • @edkaempf906
    @edkaempf906 Год назад +1

    "You may die before you get all your money back." Ok, but you're dead. So, there's zero impact on the holder.

    • @vmobile890
      @vmobile890 9 месяцев назад +1

      One of my advisors recommends a fix Annuity at 3 years at 5.35% . vs what I’m comparing before CD . What’s wrong with this ?

    • @jeffbrassard1268
      @jeffbrassard1268 9 месяцев назад

      Some annuities have a death benefit that pays out the original paid premium to beneficiaries. I have a QLAC with that feature.

  • @howardedward5339
    @howardedward5339 Год назад

    Multi Year Guaranteed annuities DO make sense, they are basically CD on steroids. I have MYGA's that are paying 5%, with free 10% withdrawls, tax benefits and state insurance. Most other types of annuties do NOT make sense UNLESS you have a family with a very long life expectancy or can get a rate of return that is 5% or better..

    • @vmobile890
      @vmobile890 9 месяцев назад

      What about a fixed at 5.35% for 3 years rather a CD .

    • @howardedward5339
      @howardedward5339 9 месяцев назад

      @@vmobile890 MYGA's are paying up to 6+% and you do not pay tax until you withdrawl, AND you can do 10% free withdrawls each year

    • @danielleg2616
      @danielleg2616 6 месяцев назад +1

      What about a 5 yr annuity at 5% and then u take out your money plus all the interest that was earned instead of payments?

    • @howardedward5339
      @howardedward5339 6 месяцев назад

      @@danielleg2616 An MYGA give you options. If rates go up, you can take 10% out each year and reinvest at the higher rates.

  • @mikemc330
    @mikemc330 Месяц назад

    Just say NO!

  • @rickbold9337
    @rickbold9337 2 года назад +3

    Hi Adam, at the end of the video you mentioned that there is better options out there. Can you suggest an option or two. I am approaching retirement and am a bit nervous of the volatility of keeping all my money in the markets these days. I don’t want that worry over my head distracting me from enjoying my retirement years. Thanks!

    • @ParallelWealth
      @ParallelWealth  2 года назад +2

      Yes, going to have a video out Tuesday with recommendations.

    • @PNdebt-hc2tg
      @PNdebt-hc2tg Год назад

      Targeted date retirement mutual funds bought from a low cost provider such as Fidelity or Vanguard. No sales charges, No commissions and they cost very little in fee's. Maybe one half of one percent. They adjust to your time horizon to keep your money safe. Avoid insurance products unless you like to pay big fee's, and big sales commissions.

    • @martik778
      @martik778 Год назад

      @@ParallelWealth Do you have a link to this video?

  • @TravisMcGee151
    @TravisMcGee151 Год назад +11

    Stay Away From Annuities !!!

    • @sunset2228
      @sunset2228 Год назад +1

      Annuity is worst than the S&P 🤣🤣

    • @keithbidne3068
      @keithbidne3068 Год назад +5

      You are in the minority stating that. One company, Allianz Life took in 7 billion last year. A Fixed Index Annuity is a safe and smart alternative for some of your retirement savings. If you knew the true facts it may change your attitude.

    • @chadbelcher6208
      @chadbelcher6208 6 месяцев назад

      I assume the S&P comment is satire. As I thought most people knew the S&P had averaged about 10% every year for over 40 years. FIXED Annuities are a great tool for PART of your retirement. There are a lot of different ways to structure them. Ladder them or use myga’s to just protect the principle and draw off the interest. Myga’s are multi year guaranteed annuities that pay a specific interest amount over a certain amount of years that you select. Just like cd’s except you don’t pay tax on the interest unless you withdraw. You can roll them over and not pay any tax. I think you can put them in for up to 15 years or little as 2 if you wanted.

    • @BigRed2
      @BigRed2 4 месяца назад

      @@keithbidne3068You are likely dirt poor
      😂

    • @Manc-fh5we
      @Manc-fh5we Месяц назад

      You don’t simply don’t know what you’re talking about….Annuities can be your best friend. There are 3 things main things to consider. 1. Interest rates. 2. Your age. 3. The type of annuity to choose. For calculation purposes Pension companies must assume an average life expectancy. I’m going to use myself in this case study here in the UK and assume this to be the national average of around 83. I had £232K in my pot. I took the tax free 25% leaving me £174K Assuming that money made nothing or lost nothing that would give me an income of £8,700 pa gross. I took the basic no frills annuity that was with interest rates of around 6% back end of 2023 that paid out £12,380 gross. That’s roughly plus 41% on my £8,700 each year for life. If that’s not a good deal I don’t know what is?

  • @JK-rv9tp
    @JK-rv9tp 2 года назад +3

    I think annuity rates are more tied to long bond rates than short term interest rates, and long bonds are not rising very much at all, because the bond markets just don't see much inflation and growth over the long term (central banks have little influence over long term bond rates). When short term rates have risen in recent times, I've noticed that annuity rates didn't change much at all. Might be better to just buy a Lifeco ETF and live off the dividends. In a way you're drawing from the same pool of money, just from a different direction, and maintaining liquidity, and if all the Lifco's in your ETF go under, well, Assuris depends on most of them staying solvent to take over the ones that fail, and it ain't gonna help ya if they all do.

  • @StephenRaySDR
    @StephenRaySDR 2 года назад +2

    I know the payments are larger if you wait until your older. What do you think of buying an annuity when you're 75 or so to increase your guaranteed payment and avoid outliving your savings?

    • @Nonduality
      @Nonduality Год назад +1

      At that age, the return on a $100k prescribed annuity could be equivalent to earning 15% on your money month after month for the rest of your life without any stock market stress. Of course, that 100k is gone. You can never get it back. And you may not live long enough to collect the entire 100k. So you need the right mental and emotional views. My view at age 74 is that I won't get an annuity until I need an annuity. I may never need one. And that's the bottom line question: Do you really need an annuity at this time?

  • @dannyyoung2712
    @dannyyoung2712 2 года назад +1

    My previous company is winding up our defined benefits pension and will be purchasing annuities for us. We don’t have all the details yet but apparently there will also be a lump sum option instead of the annuity. I was eligible to start collecting my DB at 60 with NO reduction. Should the annuity have the same eligibility and be for the same monthly payments I was shown before leaving the company? Thanks for all the great content. Once I get the annuity details, it will be time to meet with an advisor. Keep up the great work

  • @bernob9770
    @bernob9770 2 года назад

    How about using a Whole Life / Universal Life and borrowing against it at retirement from the bank as income at retirement.

  • @smokey8400
    @smokey8400 2 года назад

    Really good information.
    I have defined benefit plan and some are taking a copycat annuity using commuted value. The advantage is they are getting a annual cash rebate for the first few years with similar monthly payments. Seems to be a better option than the company plan.