No. of Recommendations: 0
You won't get any arguement from me about the quality of index annuities but I do want to state that a Monte Carlo simulation is the "be all, end all" with regard to determining if it is a good investment. Monte Carlo randomizes the return when in fact, most historical is not that random. Monte Carlo does not account for sub par trends in the market like we saw in the 70s (flat market for a decade) and in 2000-2002 (two years or significant negative performance). Monte Carlo would like split up the performance found between the years of 2000 and 2002 so it would not seem as bad.


15% and 20% of the premium

I don't like how this is worded. Premium could relate to a sales charge, which if it were a loaded fund, the company and agent gets about 80% of the premium. In the case of a variable annuity, agents get about 50% (on average) of the total M&E. Insurance companies (and agents) get about the same from fixed and immediate annuities as well. As far as I know, there is no upfront cost for a EIA so I don't see how 15-20% is that bad. Maybe I am missing something due to the use of the word premium.
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.