I recently learned SMA. Ive seen quotes from two sources and they offer a new option I might consider. I understand most of them are qualfied for IRA fund purchase. The biggest issue for me is not for life but for a term certain. But if I found a sizeable inventory of 20 to 25 year longevity SMA's I might be pull the trigger for one of them rather than a new SPIA for my life and/or wife's life. Is there a source of a sizeable inventory or is the market fragmented where sellers have access to 25 to 50 offerings rather than hundreds? Who has the largest offering of sma's of these longer term policies?
SMA's, might work for me, where can I find a large inventory to consider?
- Thread starter John H W
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- 4,883
I am confused. Are you looking at selling your existing income annuity on the secondary market? If so, it likely wont be a good math equation for you. Investors in SMA, just like investors in Life insurance settlements, invest based on expecting very nice returns of say 10% or more, meaning they will offer you quite a small lump sum to get your income stream.
Or are you looking at trying to find desperate people that have income streams but need a cash out & you can be the investor to buy their income stream.
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- #3
I am not looking to sell an income annuity I am considering buying an SPIA to supplement my Axa VA. I prefer SPIA that are for life term not a fixed period but if the fixed period was long enough might consider buying them instead of the SPIA on my life. I am retired and live off my financal assets. As I age and as the market has been so strong for equities I am interested in converting a small portion of my financial assets to an annuity to given the low returns on bonds and the like in todays market. I think the SPIA on my life is the best fit but a good fit with better returns like SMA's are something I want to assess.
- 4,883
But if you were to somehow find a path to buy an SMA from another person, I believe you could lose the entire income stream you buy when they die. It would never be based on your lifetime because it would already be an existing income stream already irrevocably set in stone. On a risk scale, buying others annuity income streams would be pretty risky on the spectrum & thus come with a great discount to the seller. But I could be completely misunderstanding SMA.
Investors buying someone's life insurance policy comes with the hope by the investor that the insured dies soon to maximize return & minimize investment. Lifetime SMA would be the opposite that you would hope for the person to be kept alive in life support forever
Investors buying someone's life insurance policy comes with the hope by the investor that the insured dies soon to maximize return & minimize investment. Lifetime SMA would be the opposite that you would hope for the person to be kept alive in life support forever
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- #5
As I mentioned only time certain annuities not life ones are what I am seeing in SMA inventory for the very reason you mentioned. A life SPIA fits me ideally but given returns are materially higher on SMA's I would consider one for the longer terms (20 years certain or so) I mentioned. I am wanting to see more inventory to measure the value vs the better fit of a SPIA on my life,
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- #6
COLA adjustments question on annuities. If a SMA is listed as having say $1000 a month payment stream but starts 10 years out, is the payout 10 years out $1000 a month or does the coals of say 3% inflate the payout for 10 years before it is paid out? I am looking at a combo of SMA's where one starts immediately and the other starts up when the first one stops paying.
Thanks in advance for the education on how COLA works on a deferredd income annuity
Thanks in advance for the education on how COLA works on a deferredd income annuity
