RetireEase Choice Deferred Income Annuity from Mass

[Justin Bilyj]

Yikes, no surrender value? Once you commit, you won't see it until retirement.

Anyone have any reviews, opinions, or experience with this product.

To be completely honest I like the simplicity of it, and the fact that your monthly income is already generated for you when you make your purchase payments (min is $500, to open is $10k for qual and 5k for nonqual).

Thank you

 

[Tahoe Ray]

Yikes, no surrender value? Once you commit, you won't see it until retirement.

Anyone have any reviews, opinions, or experience with this product.

To be completely honest I like the simplicity of it, and the fact that your monthly income is already generated for you when you make your purchase payments (min is $500, to open is $10k for qual and 5k for nonqual).

Thank you

I've used NY Life's product in the past (same general concept). It is essentially a deferred SPIA...you're basically purchasing a pension.

To insure against longevity, it is not a bad idea. The few that we've done have been used to basically lock a portfolio in place. For example, let's say that you are 65 and have a 1m portfolio from which you need 60k annually...most planners/advisors will point to this as a very unsafe w/d rate (the possibility of running out of money prior to death is high).

However, if you peeled off 100k and dropped it into one of these deferred income annuities, you could spend your remaining 900k @ 60k annually over the next 20 years even if you only earned 3%. This is b/c your DIA would then kick in at age 85 where a life only payout would create more that 60k/yr.

You have to back in some inflation calculations as well as a realistic performance assumptions for the portfolio to get accurate numbers.

It looks good on paper but in my experience, most people don't want to give up the control that these products require. Add to the fact that this is a pretty bad rate environment to make this commitment, it's not normally a primary concept.