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Subject:  Re: Hybrid/Other Annuities Date:  4/18/2014  10:56 AM
Author:  tjberko Number:  35266 of 36693

With an annuity, if he dies in one year, his estate will lose $94,000 in value.

No. I don't think you understand how a deferred annuity works.<i/>

There is no way he can get 6 percent on a deferred annuity now. This is an immediate annuity. An immediate annuity is a form of life insurance where instead of getting a lump sum when you die, you get a stream of income until you die. His $100,000 is gone as soon as he makes that purchase.

PSA is trading at 21.67. That means that someone that bought it at the issue price of $25 is currently sitting on a 13%+ loss.<i/>

I wouldn't have recommended it when it IPO'd, but regardless, a 13% loss is better than the 100% loss he experiences with the annuity - and on top of that, it actually pays a higher interest rate which starts immediately and not after 16 years of waiting for your principal to be returned.

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