Personal Investments • SPIA Annuity as part of Retirement strategy -- getting cold feet; need handholding and/or advice

It sounds like you're at a crucial crossroads in your financial planning, and it's natural to feel a bit overwhelmed when considering such significant decisions. You're weighing the trade-offs between a guaranteed income stream through an annuity and the potential growth and flexibility of other investment options like bond ladders.

Both the annuity and bond ladder strategies have their merits, and the best choice depends on your risk tolerance, income needs, and long-term financial goals. If you value guaranteed income and peace of mind, the annuity might be appealing. However, if you prefer maintaining flexibility and the potential for higher returns, a bond ladder or a combination strategy might be better suited for you.

Responding to your second paragraph -- the problem is that I want both. I want security and I want flexibility, room for growth etc.

I think we are going to go for the annuity, but a smaller one. I think we would feel more comfortable forking over $1M than 1.5M or 1.9M. Now we are trying to decide if we are going to split the $1M between two different companies -- say New York Life and Nationwide (instead of just New York Life).

Unfortunately, we just watched that series on Bernie Madoff last night and that did not help me feel more comfortable about making big financial decisions.

If you're going to go over your state's annuity guarantee protection limit (which I would not), I would highly recommend sticking with the highest rated insurance companies like New York life, Nationwide is NOT in that category.

I just want to be clear on this for the OP.

Here is the list of state guarantee limits for annuities. It's basically your insurance policy against default.

Also here is a link to better understand these guarantees.
https://www.annuity.org/annuities/regul ... ociations/


The State Guaranty Association’s Coverage Limits by State
Each state defines its own limits — set through state laws — on the maximum amount of coverage.

Every state plus the District of Columbia guarantees total annuity coverage of up to at least $250,000 of an annuity contract in the event of an insurer’s insolvency.

StatePolicyholder Protection: Annuity Benefit Limits
Alabama$300,000
Alaska$250,000
Arizona$250,000
Arkansas$300,000
California80% of the annuity contract value up to a $250,000 limit
Connecticut$500,000
Delaware$250,000
District of Columbia$300,000
Florida$300,000
Georgia$300,000
Hawaii$250,000
Idaho$250,000
Illinois$250,000
Indiana$250,000
Iowa$250,000
Kansas$250,000
Kentucky$250,000
Louisiana$250,000
Maine$250,000
Maryland$250,000
Massachusetts$250,000
Michigan$250,000
Minnesota$250,000 in most cases, or up to $410,000 for structured settlements
Mississippi$250,000
Missouri$250,000
Montana$250,000
Nebraska$250,000
Nevada$250,000
New Hampshire$250,000
New Jersey$100,000 (if the annuity is deferred) or
$500,000 (if the annuity is in payout status)
New Mexico$250,000
New York$500,000
North Carolina$300,000 for most annuities with an exception of
$1,000,000 for structured settlement annuities
North Dakota$250,000
Ohio$250,000
Oregon$250,000
Oklahoma$300,000
Pennsylvania$250,000
Rhode Island$250,000
South Carolina$300,000
South Dakota$250,000
Tennessee$250,000
Texas$250,000
Utah$250,000
Vermont$250,000
Virginia$250,000
Washington$500,000
West Virginia$250,000
Wisconsin$300,000
Wyoming$250,000

Statistics: Posted by retireIn2020 — Tue Sep 03, 2024 12:40 am — Replies 87 — Views 4980