... and it's not even from Laurence Kotlikoff.http://www.pbs.org/newshour/businessdesk/2013/09/an-83-perce...An 8.3 Percent Return on Your Money, Guaranteed for Life? Lew Mandell: Yes, there is a way for older Americans to receive guaranteed lifetime income that, for many of us, is more than three times the current rate on 10-year Treasuries. It is through the purchase of a Single Payment Immediate Annuity (SPIA), perhaps the least-known, best retirement deal on the market today.</snip>As one of the commenters to the article points out, the internal rate of return for a 70-year-old living 15 years to his median life expectancy of age 85 is less than 3%.intercst
What's scary is that these rediculous claims work. The unwary read something like this, give the insurance company a large chink (if not all) of their savings, get paid back to them 98.5% of their capital, get an IRR of (around) 1.5%, think they are getting (insert any high % here that sounds great but not so high as to sound like a scam) and live out retirement in complete financial bliss.Because fixed insurance products are exempt from most federal regulation, there is no "truth in lending" requirement for how insurance "rates" are calculated. The retiree is on his own.BruceM
I met someone recently that was sold an American Equity Indexed Bonus Gold.16 yr SCS, 20% SC in the first year, ARR of just over 2%.Probably the worst thing I have ever seen. 20% participation rate. Probably a commission of 9%.http://annuitygator.com/independent-review-of-the-american-e...Gotta watch the video.
Funny you would mention. I just finished reading it. I don't remember how I got there, but after reading I was aghast. It couldn't have been more roses and cream if it had been written by an advertising agency.
Goofyhoofy writes,Funny you would mention. I just finished reading it. I don't remember how I got there, but after reading I was aghast. It couldn't have been more roses and cream if it had been written by an advertising agency. </snip>What kills me is that the author Lew Mandell is a PhD economist and former Dean of the business school at SUNY Buffalo. Although he seemingly can't calculate the investment return on an annuity, he's bills himself as one of the nation's foremost experts on financial literacy.http://lewismandell.com/about_lewis_mandellintercst
Horrible advice....simply horrible.