Personal Investments • What Do You Think of These Investments?

A way to think about the tax penalty is that it reduces the interest rate by 10%. So, for example, a MYGA that is crediting 5% would have an effective earned rate to you of 10%, or 0.50%, less than the stated rate, reducing your personal earned rate to 4.50%. Not great, but also not disastrous.

But will the 10% penalty be applied to the amount of money I take out or to the interest rate itself?

I expect that you could buy a SPIA that pays once per year. But, in your special situation where you want flexibility as to when you receive income from the annuity, the VA is the most flexible, MYGA is in second place, and the SPIA is inflexible (since you'll get that income every month (or year).

For the sake of argument, lets say I didn’t have an special situation. How would you rank SPIA, VA and MYGA in returns?

An IRA can contain a wide variety of investment vehicles - mutual funds, CDs, etc. Annuities are just one type of product that can be contained inside an IRA.

Hypothetically, lets say I no longer have a special situation. Would you recommend an IRA or 401k for long term investment as the best option of all the investments we talked about so far? Really sorry for my redundancy but I want to make the right decision and I’m confused about which product(s) to choose.

You can certainly invest in VOO and treasuries.

As to my special situation, I can have unrealized gains as long as I don’t cash out a VOO during my “on” years. So in my “off” years, I can liquidate a VOO and I won’t have problems doing so. That being the case, would investing on my own say 30% in VOO and 70% in bonds be the best choice over IRA, 401k, SPIA, MYGA or VA?

I can’t thank you enough for helping me out. Hope I’m not overwhelming you. Looking forward to your much needed reply!

Statistics: Posted by arca — Fri Sep 20, 2024 2:53 am — Replies 51 — Views 4313

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