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Thread: Annuities

  1. #11
    Quote Originally Posted by HACKNSACK44 View Post
    I would not have to pay taxes on the $2,000,000.
    Or interest if nothing changed, and you set it up correctly.
    I have had periodic paralysis all my life. I lost my ability to walk in 2011 beginning with a spinal block, which was used for a hip fracture caused by periodic paralysis.

  2. #12
    Based on current interest rates a 45 year old male buying a $2M annuity would be paid approximately $8/month ($96k/year) until death regardless of how long you lived. A 20 year certain annuity would pay out approximately $11k per month ($132k/year). The difference is due to the fact that the insurance company expects that you will (on average) live more than 20 years. If you choose the 20 year certain but live to say 69, you will have no income from the annuity for the last 4 years of your life. Also, inflation will erode the purchasing power of the fixed monthly payment.

    People who receive large settlements, like lottery winners, often spend it all away in a short period of time. It takes discipline and knowledge (and to resist those close to you who may want to get at the money).

    The good news is that this is not an all or nothing decision. You can take half the settlement as a direct cash payment and use the other half to purchase a lifetime annuity. Or you can split it however you wish.

    Do you wish to leave an inheritance to anyone?

    Given the amount of money, I recommend that you find an independent financial advisor that is paid on a fee only basis (no commissions). Look for one with a "CFP" designation.

  3. #13
    That's 4.8%. I didn't realize annuities were so good. My understanding is that they were poor investments. Time to take another look.

  4. #14
    4.8% is the equivalent cash flow but that's not the same as interest rate on a CD or annual return on a mutual fund. The difference is that the 4.8% includes the return of principal. A 20 year annuity returns 5% of your principal per year., for example

  5. #15
    Senior Member
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    You may want to consider a Structured Settlement with income increases every year, payments every month, no income tax, for THE REST OF YOUR LIFE! Your attorney needs to set you up. So glad we did this for our son.

  6. #16
    Senior Member
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    ''Based on current interest rates a 45 year old male buying a $2M annuity would be paid approximately $8/month ($96k/year) until death regardless of how long you lived. A 20 year certain annuity would pay out approximately $11k per month ($132k/year). The difference is due to the fact that the insurance company expects that you will (on average) live more than 20 years. If you choose the 20 year certain but live to say 69, you will have no income from the annuity for the last 4 years of your life. Also, inflation will erode the purchasing power of the fixed monthly payment.''

    Thanks for the reply. I need an annuity that covers me for life. I plan on being around for more than 20 years. IOf course if I don't make 20 years my wife will get the money until the 20 years is up.

  7. #17
    Senior Member
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    Quote Originally Posted by Mombo View Post
    You may want to consider a Structured Settlement with income increases every year, payments every month, no income tax, for THE REST OF YOUR LIFE! Your attorney needs to set you up. So glad we did this for our son.
    Thanks for the reply. I'm talking to my attorney and we are discussing things.

  8. #18
    I think tax free annuities...taxes are paid at the time you set it up. Great post though.
    Art

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