quote:

Originally posted by Aeteocles:
Beware anyone that earns a commission on the products they sell.

In fact, beware anyone that sells you a product.

A little bit of an over reaction isn't it?

quote:

Originally posted by Aeteocles:
Beware anyone that earns a commission on the products they sell.

Lol, you sound like fun.

Many years ago a friend who manged to make himself a multi millionaire by the time he was 50 told me to get out of the low interest CD's and start with vanguard. that was probably 30 years ago. Just let it ride and after all that time, i've done ok and haven't paid someone a buttload of money to seel what is best for them.

Retired 12 years and I haven't had to touch it. But i think not having any debt when getting out and probably no kids all those years helped.

quote:

Originally posted by smschulz:

quote:

Originally posted by Aeteocles:
Beware anyone that earns a commission on the products they sell.

In fact, beware anyone that sells you a product.

A little bit of an over reaction isn't it?

Not when it comes to financial products, it isn’t.

I only trust fee-only CFPs with multiple references.

Yes, I’m serious.

-Rob

Someone sells you a washing machine or suit on commission, the worse you'd end up is an ill-fitting suit or a washing machine that craps out sooner than later.

Someone sells you bad financial advice and the worse you'd end up is not enough money to live on as you expected for the rest of your life.

Madoff was the biggest financial ripoff but there are many more who may not outrightly defraud you but will tilt the table towards their benefit with no regard to how much it will cost you.

If you've been able to save enough money to be worried about, you have the ability to learn about managing money. Go to a professional as BurtonRW recommends even to get some education.

Not all of Madoff's victims were greedy, some just thought they were presented with a great opportunity.

With regards to an annuity, yes, it's a guaranteed income for a certain period like your life or even your spouse's life but it comes at a cost. You can calculate what the rate of return that the annuity payment represents against the premium you paid. Then you could decide whether you can do better by hiring a fiduciary (someone who has a legal burden to look out for your best interests) to manage your money for you.

just do what .gov does; borrow and steal.

fpuhan, I was an annuity sales rep for 10 years. I worked for a straight salary and was NOT commissioned, and I told people the plain truth. I don't want to hurt your feelings, because you sound pretty intelligent, but I fear you have been taken advantage of in a pretty standard, but technically legal scheme.

You almost never roll any part of an IRA into a deferred annuity (was it a variable annuity?). Why? Because your IRA is already tax-deferred and possibly tax-deductible. You're paying (a lot) for something you already have. The "advisor" knows this, and probably smoke-screened you with dubious features like the "guaranteed death benefit". The GDB only protects heirs, if any, and does the living owner no good whatsoever.

Was this advisor at a bank? Typical for reps to scan accounts for IRAs with CDs coming due, and slam the clients into the most heavily-commissioned product on the market. He's doing it for the 7.5% commission.

The guaranteed life payout on annuitization? Yeah, it's a fine thing...except you don't have to do it with a deferred annuity. You can take any IRA and drop it directly into something called a Single Premium Immediate Annuity any time you like. (Various "things" apply, so discuss with someone you can trust before annuitizing an IRA).


All is not lost. You have at least 10 days to "free look" the contract. After that, you're probably locked in by a stiff surrender charge, though it usually declines annually.

I hate to see people being taken advantage of, especially the good folks on this forum. I'd even be willing to talk on the phone with you (I no longer sell annuities).

Kevin

Don't have to worry about money? That's great, one less thing.

quote:

Originally posted by flashguy:
When I retired (the second time) I took my retirement as a lump sum and invested it and my 401K fund into 2 Equity Indexed Funds. By agreeing to not convert to an Annuity for 5 years I was given a "bonus" of 10%, which was nice. (I still have not gone to an Annuity, but my nephew says I should.) I did use a Financial Advisor from one of those group meetings at a cafeteria, but only because what he had to say actually made sense to me. I have no quarrel with the outcome.

flashguy

Good work, FG. This is one of the few times when an annuity does make sense for qualified funds. Unlike variables, Indexed Annuities (aka Equity-Indexed Annuities) do provide a living benefit. The principle is guaranteed, first of all, as is a certain minimum return. The downside is partial participation in the stock market. If the market performs above a certain level (as stated in your contract), the insurance company gets it, not you. For a lot of investors it's a perfectly reasonable trade-off.

Great information kkina.

Personally I don't have any annuities and probably never will. I have everything in a Vanguard brokerage account.

This was of note to me when I did research them.

https://www.fidelity.com/viewp...xQIdBh0Hwg&gclsrc=ds --- Indexed annuities: Look before you leap

"An annuity is only as good as the insurance company's ability to honor its commitment to you, so be sure to review the financial strength of the insurance company."

quote:

Originally posted by Aeteocles:
Beware anyone that earns a commission on the products they sell.

In fact, beware anyone that sells you a product.

Agreed. I only trust people that work for the good of mankind

best wishes w/ that

quote:

Originally posted by RAMIUS:

quote:

Originally posted by Aeteocles:
Beware anyone that earns a commission on the products they sell.

Lol, you sound like fun.

Fun or not he's right. Often people are MUCH more concerned about their commission than what is truly best financially for the customer. I've seen it cost friends and family members much hardship when they realize how screwed they are.

Just one recent example Currently I have a family friend who is trying to put money away for his grandchildren to go to school. The financial planner he consulted with never even brought up a 529 plan. When I advised he needed to look into a 529, and he asked the financial planner, he started outright lying about 529s. Why? Because qualifying 529 investments are limited to things which he can't make a commission. So he was suggesting my friend pay more in fees (his commission), and lose out on huge tax savings, all because that clown was greedy.

That's just one of many examples.

Commissioned or salaried salesman status is irreverent.
If you believe in the free enterprise system aka capitalism then this is irrelevant.
Judge them on other factors that actually make a difference such as performance, reputation, education, experience, talent or whatever are more important.
When I was not working for myself I had every combination of compensation and none of them made me be less dedicated to doing the best job I could for my customer or client.
YMMV

quote:

Originally posted by DMF:
Just one recent example Currently I have a family friend who is trying to put money away for his grandchildren to go to school. The financial planner he consulted with never even brought up a 529 plan. When I advised he needed to look into a 529, and he asked the financial planner, he started outright lying about 529s. Why? Because qualifying 529 investments are limited to things which he can't make a commission. So he was suggesting my friend pay more in fees (his commission), and lose out on huge tax savings, all because that clown was greedy.

Bullshit. There are plenty of commissioned 529 plans he could have recommended. I write software for a leading 529 plan that only sells to Joe Schmuck. We do offer a lot of investment diversity. Most plans don't. The fact is most of the plans that you are talking about are restrictive as hell when it comes to your investment strategies. Do they all offer a glide path where investments get more conservative as the child gets older? Fuck no. Do they all allow custom investment options? Fuck no. How many funds do most plans offer? Very few. Will they let you change your investment strategy more than twice a year. Fuck no (that's the law FYI). How did those wonderful plans do in 2008 and 2009. Dismal at best. A good financial adviser could have saved a lot of people a boat load of money in those years.

How well will those plans do in the coming years with a declining age population? Pretty iffy if they don't have their shit together.

Would the tax savings exceed the gains from really good equity buys and sells including commissions? Maybe? Maybe at best.

There are good financial advisers and bad financial advisers. The good ones make really good money because they work for commission and do a really good job.

quote:

Originally posted by frayedends:
Gee and I was sure you were gonna say you bought gold from Rosland Capital.

When I win the patent lawsuit over my invention of toilet paper, I'll be rolling like a pig in ...

I knew very little about investing/retirement. Five years before I retired from Intel, I heard Warren Buffet say he was a fan of Index funds. I have been all-in a Vanguard and Fidelity index funds since. I retired two years ago. I have been living on one of these funds since I retired (at the same rate as when I was working). That fund is now $50K higher than when I retired.

I'm very pleased with index funds.

Think what you want, but each state regulates the 529 plans, and limits what investments are eligible. Which often means the high commission plans many of the financial planners love to push are NOT part of the 529 plan.

Also, in the state plan my friend would want to use, none of the investments are one this financial planner could get his regular commission. His sole interest in discouraging the 529 plan was he can't get his high commission.

Further, while it's true the plans limit you to particular investments, in his state that's literally dozens of great options, with some real ability to diversify, and plans that are age based, to do what you call a "glide path" that automatically shifts to more conservative investments as the child ages.

Diversity, ability to adjust for time frame and risk tolerance (including automatically), and a big tax advantage. It's a great (often the best) option for many, when trying to save for education.

Again, in that example (and many more I have personal involvement with), the commission based advisor was willing to horribly screw the investor, solely because he wanted his high commission.

quote:

Originally posted by rscalzo:
. . . told me to get out of the low interest CD's and start with vanguard.

Sorry, but this kind of statement/advice is irritating to see.

Vanguard has literally dozens of different products it offers. Many varieties of mutual funds, Exchange Traded Funds (ETF), and money market accounts.

Saying "start with Vanguard" is like telling someone who is interested in firearms, and saying "get a Smith & Wesson." S&W has single action pistols, striker fired pistols, semi auto rifles, revolvers. All in a variety of calibers, both rimfire and centerfire. Some are appropriate for some people, and their intended goals, and some are not. The same is true for the many investing options offered at Vanguard.

Saying, "start with Vanguard" is simply not helpful.