Hi Joe,
- quote -

With Mutual Funds you get more. Even some money market funds bring in 5%.

CU
John

"Cal" <cal-lester[at]comcast.net> wrote in message
news:7KSdnfGW9rfOVKLYnZ2dnUVZ_rGdnZ2d[at]comcast.com...

- quote -

That past record is fine, but still 20 years into the future is a long time
and unexpected things can happen. Back in the 1980s many people would have
thought it impossible for savings and loan associations to fold.

"rick++" <rick303[at]hotmail.com> wrote in message
news:1161798013.482600.178320[at]b28g2000cwb.googlegroups.com...
- quote -

I read the write-up, and the company DID NOT violate it's contract.
I all probability the contract in -force stated CLEARLY that no benefits
were payable to a "member of the family". If she had gone to a facility
as outlined IN THE CONTRACT, benefits would have been paid.
Cal



That was NOT a good contract, but it WAS a contract. ! ! ! ! ! ! !

"Don Zimmerman" <dwzimm[at]telus.net> wrote in message
news:cdM%g.31496$P7.6801[at]edtnps90...
- quote -

True, but not a correct analogy. The banks (although insured to 100k) were
NOT protected by the State. Whereas Life Insurance Companies are.
There has NEVER been a Life Company failure that resulted in a policy
being Null & Void. The failures that have occurred, resulted in ALL of
the contract being HONORED (as stated in the contracts) by other companies.
Cal

The same question comes up with Long Term Care policies.
They dont last the decades, but for other reasons:

http://www.chron.com/disp/story.mpl/...s/4277543.html

"Cal" <cal-lester[at]comcast.net> wrote in message
news:NO6dnVtC-sFYHaLYnZ2dnUVZ_tCdnZ2d[at]comcast.com...

- quote -

But the future is full of surprises. Think of what happened to the savings
and loan associations in the 1980s. Who would have thought those rock solid
institutions could ever get into financial difficulties. I would not want to
bet anything of what might or might not happen in 2020.

bo peep wrote:

- quote -

John, since the typical yield curve is at least slightly rising, a 30
yr. bond will offer a coupon higher than a 1 yr. CD.
I am a fan of fixed, immediate annuities, and understand the trade off
to be giving up the principal in exchange for the higher annual return.
Right now the numbers are near 5% for the 30yr bond (4.92) and 8% for
the 60 yr old's annuity. If the 60 yr old is feeling well, I like the
annuity.
As the annuity rate approached the bond rate, the case for the bond
getting stronger as the return of principal at 90 would be enough to
return 5% till death regardless of interest (5% = 20 yrs at 0%
interest). I'm happy to consider the other variables that add to the
value the annuity brings, asset protection in case of lawsuit, I believe
BWS mentioned. Aside from that, the numbers don't favor annuity if the
rates are similar.
JOE

"rick++" <rick303[at]hotmail.com> wrote in message
news:1161782687.524990.169830[at]k70g2000cwa.googlegroups.com...
- quote -

BUT the Annuity lives on in perpetuity. There has NEVER been an
instance of an In-Force Immediate Annuity that FAILED to make
payments. At worst, it would be taken over by another company.
Cal

rick++ wrote:
- quote -

Can you cite a single instance in US history where anyone has lost
money on an immediate annuity because of the insurance company not
surviving?

Hint: the answer is no.

John Cowart

PLus you hope the insurance company lasts as long as
the annuity pays out. In times of financial stress not
all the insurance companies survive.

joetaxpayer wrote:
- quote -

The point is that they continue to pay out until you die, unlike a CD.
If you can manage to live to be 120 years old, you make out like a
bandit.

John Cowart

"Elle" <honda.lioness[at]nospam.earthlink.net> wrote in message
news:5qA%g.12512$Lv3.8653[at]newsread1.news.pas.earthlink.net...
- quote -

Elle, the author didn't present any arguments in the article. Four points
were made though.
1. Annuities grow tax free until withdrawal.
2. 401k & 403b plans allow pre-tax contributions.
3. 10% penalty for distributions before age 59.5.
4. Earnings will will be taxed as ordinary income.

All four of them are still true, still valid. I don't see the point you're
trying to make.

It is true, you didn't suggest any website by name:
"I do think it is a worthwhile read as long as people bear in mind this
significant change in tax law and also read, say, half a dozen more recent
articles on annuities from diverse sources. It's a much discussed subject on
the net."

That you are being evasive is not the issue. The important thing was to find
out which of the above points were now false because of tax law changes. I
think everyone is in argreement that none of them are false, well, except
for you.

Ed, I responded that the 2003 tax law changes are what make
the 2002 site's arguments on tax law invalid. You should
check on these changes, obviously, then google for the
effects of these changes on deferred variable annuities in
particular. I did not advise anyone to check Quicken nor
Motley Fool on the subject, though they each may have useful
information.

joetaxpayer <joetaxpayer[at]nospam.com> writes:

- quote -

It's not really a premium and it's somewhat misleading to term
it as such. The annual payout, as a percentage of what one put
in, will be higher than that of a CD, but that's not because of
an interest premium - it's because the principal is effectively
being paid back out in addition to interest. At the end - in
the case of an annuity, usually death, in the case of a CD,
the maturity - at the end, a CD pays back the principal. An
annuity ends up worthless. (barring, of course, various potentially
costly add-ons such as minimum payout periods, death benefits,
etc).

Saying it pays a premium over CDs is just another example of
the common apples-to-oranges comparisons which make this business
so potentially misleading.



--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

Ed wrote:

- quote -

The one thing that strikes me from the site is with regard to a fixed
annuity;
"Norman Chiodras, founder of Retirement Planners Inc. in Oakbrook, Ill.,
occasionally uses fixed annuities for clients as an alternative to CDs.
“They often pay a premium over CDs, and they're safer than bonds because
their value doesn't fluctuate,” he says."

First, if they do not pay a premium over CDs, then what would be the
point? I advocate immediate annuities as I see 8% for a 60 year old vs
the 5.xx% CDs out there.

It may be nit-picking, but his remark about 'safer' is absurd. The
annuity gives the same annual return year after year, as would a bond.
The trade off with the annuity is to have no return of the face value in
return for a higher annual payout. The bond would have given out a known
value at maturity. I can say that the payment stream from the annuity
does fluctuate in value as inflation chips away. (Mostly down as we
haven't seen disinflation in some time)

JOE

Ed wrote:
- quote -

Except for a 401k when you left your last job after reaching age 55,
there is no 10% penalty.

John Cowart

On another board there was a lot posted about annuities. I posted a link to
a site that pointed out some of
the pro's and con's.
http://registeredrep.com/annuities_i...ons_annuities/

I got a reply from Elle (a regular poster here):
"The piece linked is dated 2002. Because of the tax law changes of 2003, for
one, many of its arguments are invalid."

I replied:
" Which of its arguments are invalid?"

Elle replied:
"Just about any that refer to tax law, like I wrote above."

I replied:
Ok. Points related to taxes:
1. Annuities grow tax free until withdrawal.
2. 401k & 403b plans allow pre-tax contributions.
3. 10% penalty for distributions before age 59.5.
4. Earnings will will be taxed as ordinary income.
That pretty much is all the article says that has anything to do with taxes.
Which of them are now invalid?
Elle, hasn't responded. Does anyone know if any of the 4 points above are
untrue. I took her advice and checked both Quicken and Motley Fool on the
subject and it appears that all 4 points are still valid. Does Elle know
something that I don't about taxes and annuities?

I understand that the 10% penalty can be avoided if you annuitize but
withdrawals prior to age 59.5 will be subject to a 10% penalty.