I’ve heard that other companies' 401(k) savings plans, are now offering immediate and fixed differed annuities as an option within the 401(k) saving plan. Has anyone spoken to anyone within AZ’s HR department, or heard anything about this as a future option? Companies that are offering this option have realized that they can negotiate a better APY for its employees within the plan on fixed deferred annuities & immediate annuities, as opposed to what is available on the open market.
Annuities would be a nice addition to the 401k plan, but it's more for the 50+ crowd. Pending your retirement date, you have to assess if this is worth it. If your within 7yrs of retirement, it's worth consideration. The problem with annuities is that it gives a guaranteed return, but doesn't perform up to market returns. I've followed annuities and they typically lag the market return 3-10%.
Poster number three makes some valid points, but it would be nice to have the option. If a fixed deferred annuity provided a good APY in the of 6% to 8% range, with a no load and no fees, that would return more than the current AZ bond manage funds and perhaps some of the target dated funds minus their fees. It certainly would take away some of the risks like we saw in 2008 market.
That's the beauty of annuities though. As long as you meet their eligibility requirement as it relates to how long you have to hold it, you're guaranteed a certain annual percent return. I have an annuity that pays 6%, but I'm not sure they are out there anymore. I think the average is five or less. It's just another option that makes sense for someone that is eyeing retirement in the next five to ten years. It would be a great option to add to the 401k profile.
The USA is 18T in debt and every day it increases by $500,000,000.00. Buy yourself a farm where you can grow your own food. Forgettaboutit. Obama has ruined America.
Yes, the beauty of annuities is the fixed, guaranteed return, but to give that guarantee they are based on Gov bonds and treasuries which currently give near zero return. Annuities are currently little better than putting your money under a mattress, if you calculate the returns you've barely had your capital outlay back by the time you're in your mid 80's! never mind any interest.
It would be based on individual’s specific situation. If you, or your spouse, are fortunate to have good genes (longevity runs in your family as well as good health) it might be a good idea to look into fixed differed annuities as one will never run out of money. Also, if there is still money within the policy, it can be passed on to designated beneficiaries. Several of these type of annuities will allow one to without a withdrawn a certain percentage without incurring a penalty and without having to ever annuitize the policy. If AZ were to evaluate, negotiate, and provide access to preferred plans, it would save a lot of time and work on the behalf of the employee.
Went to a luncheon not long ago about an annuity. It wasn't called that and the presenter skirted around that definition, but that's what it was. Specifically it was a life annuity. When I asked the presenter if he was selling life annuities he said he was in the business of protecting peoples investments. Sheesh.... anyway, they offered a guarantee of 5% growth per year, assuming you didn't take any monies out. Essentially the "guarantee" was dependent on the future growth of the market, which traditionally exceeds that growth over time. So, the insurance company they represented gives you that 5%, but over time invests the additional gains that the market makes for themselves. What you were really buying into was long term care insurance with 5% yearly growth if you let it sit. I sliced though it and asked questions about the life annuity during the presentation, wherein the presenter had already asked us not to ask questions until he was finished and slapped my hand. He was a very slick snake in the grass in my opinion.
Good information. So do you think that targeted funds would be better, given that one is willing to take risk in the current market?
It is always best to diversify. Put a percentage of your money in an annuity to protect yourself against the worst. Put some in a targeted fund but also invest a percentage in foreign and domestic equities. Most with good long standing companies that actually make something like Coke, Ford, Exxon, G.E. etc. The last 5 years have been great to be in stocks. Many people have doubled their money but the smart investor has been taking some gains along the way and reinvesting in safer defensive funds. Get an a professional financial advisor unless you are willing to invest the time in managing your money on a daily basis.
Greece is a small pimple on the World's ass. But, it is an example of what faces many countries including the U.S. if we don't wise up and change our ways. Democracies fail when politicians use free shit to get elected and people continue to vote for them to receive their goodies. When the percentage of voters who receive government handouts exceeds 50% then that country is doomed to become Greece. Reality sets in when they line up for their food stamps, pensions, etc. and the bank is closed because there is no more money. That is happening in Greece right now.
