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Author: libc Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76421  
Subject: Re: Retirement Consideration Date: 2/23/2001 11:41 AM
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While annuities may be right for some people, I strongly distrust someone with an "LIA" among their titles telling me of annuties' benefits.

[LIA - Stands for Licensed Life Insurance Adviser, Commonwealth of Massachusetts, Department of Banking and Insurance.]

Particularly since that someone usually stands to benefit hugely if one of us purchases an annuity contract through him.

[Where in my post did you get the impression that I am selling annuties? I am talking about my own experiences at my current age of 68.]

I am *very* glad that you mentioned that (a) annuities don't transfer through to heirs, and (b) the return on annuities is lower than on other assets, because of the guarantee. [However, I know that if my mom dies the day after she retires, she's guaranteed to receive zilch from her annuity.]

[As stated in the post the purpose of the annuity is to guarantee a monthly income for life. When there is a spouse involved a guaranteed period should be elected. In addition, although not the ideal transfer vehicle they do transfer through to heirs if any of the guaranteed period remains.]

Your post points out two important things:
1. that the "average annual returns" quoted by nearly all mutual funds are meaningless. The number that really should be promoted is the "compound annual growth rate", also known as the "total return, annualized". But even this number has NO influence on the mutual funds in the future.

2. That all the retirement calculators out there are suspect because they assume constant interest, inflation, and investment growth rates. I agree with you completely. Fortunately, there are retirement calculators that take these varying rates into account: www.financialengines.com is probably the best known; www.quicken.com has one also.

I don't think Mr. Brownlie is going to win many customers from the Fool site, because TMF is about learning for yourself and taking control of your investments.

[Mr. Brownlie is not attempting to win any customers. I am retired. Again, to repeat myself I am simply sharing my current feeling at age 68. I am all for taking control of one's investments...but when one reaches their 70s they may not have the stomach for managing their own money.]

His implied suggestions in the previous post go against the grain of what is said on the fool: "Give up control, give up potential return, and pay higher fees."

[I believe that you are totally misquoting me. There is nothing in my post to warrant such a statement as you have made above.]

LIBC
William D. Brownlie, CLU, ChFC, CIP, LIA

This email advice is designed to provide accurate information in regard to the subject matter covered. It is performed with the understanding that William D. Brownlie is not engaged in rendering legal, accounting or other professional service including actively selling life, disability, long term health care insurance, and investment advice. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.
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