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URL:  https://boards.fool.com/ooops-got-the-italics-messed-up-i-stated-that-31214585.aspx

Subject:  Re: Hybrid/Other Annuities Date:  4/18/2014  11:02 AM
Author:  tjberko Number:  35267 of 36651

Ooops. Got the italics messed up.

I stated that "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.

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 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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