Annuity Investment - What Options are There?

[Bandito440]

Vanguard's Target Funds are handy, as they automatically invest more conservatively as you approach retirement. Still, the expense ratio (.17%) is significantly higher than that of the Total Stock Market (.05%) and Total Bond Market (.07%) funds.

For the next 10 years, stick with the Total Stock Market fund and reevaluate then. If you want exposure to international stocks, you can put some money there too.

If you do want the ease of a target fund, go with the 2040 one to get greater exposure to equities.

 

[Bandito440]

Originally Posted By: Merkava_4
Genworth Life. Relinquish $20,000 for 20 years and get $10,000 interest at the end of 20 years.

In the meantime, they own your money and you can't touch it.

Yeah, I'm assuming that you're using this as an example of a bad investment. Really bad.

It sounds like something one of my co-workers would buy though. He just took an early withdrawal from his 401k, got hit with a 10% penalty, and used that money to buy a timeshare. Epic.

 

[Mr Nice]

I'm 80% index, 20% dividend stocks which yielded $53,000 last year.

I can post screenshot if there are any doubts .

 

[Bandito440]

Originally Posted By: Mr Nice
I'm 80% index, 20% dividend stocks which yielded $53,000 last year.

I can post screenshot if there are any doubts .

Total returns should be expressed in a percentage. Which funds are you invested in?

 

[Mr Nice]

The Fidelity index funds I posted last month.

These funds had lower expense ratio than Vanguard.

0.01% Large Cap
0.04% Mid Cap
0.04% Small Cap

 

[Bandito440]

Originally Posted By: Mr Nice
The Fidelity index funds I posted last month.

These funds had lower expense ratio than Vanguard.

0.01% Large Cap
0.04% Mid Cap
0.04% Small Cap

Ah, you're the GE Guy. Whoever set those up did very well for you. For the rest of us who don't have access to that employer option, Vanguard is they way to go.

 

[dishdude]

Originally Posted By: Mr Nice
The Fidelity index funds I posted last month.

These funds had lower expense ratio than Vanguard.

0.01% Large Cap
0.04% Mid Cap
0.04% Small Cap


Why would you post rates from an employer sponsored retirement plan that no one other than GE employees has access to? How is this information relevant to anyone other than yourself?

 

[Mr Nice]

dishdude,

Other non GE companies have the same funds through Fidelity since they manage hundreds of 401K plans from various employers across the USA. Its really not that difficult to find out this info.

Vanguard for people who don't have access to Fidelity.

 

[Bandito440]

For sure. BlackRock manages my 401k, with fees at .029% for all funds. I don't have an employer-sponsored Roth IRA option, so I went to Vanguard for that.

 

[hattaresguy]

What about just setting up an account and buying companies from the dividend aristocrat list?

I don't know much about stocks but dividends sound like a good idea.

I'm thinking about opening up a Scottrade account and just researching and buying companies on the list a few grand at a time. Reinvest the dividends and let it grow for 40 years, or forever. This sounds like a good plan B after me REI income.

 

[Bandito440]

Originally Posted By: hattaresguy
What about just setting up an account and buying companies from the dividend aristocrat list?

I don't know much about stocks but dividends sound like a good idea.

I'm thinking about opening up a Scottrade account and just researching and buying companies on the list a few grand at a time. Reinvest the dividends and let it grow for 40 years, or forever. This sounds like a good plan B after me REI income.

There's definitely more speculation and risk in buying individual stocks. If you decide that buying high-dividend stocks is going to be your investment strategy, I'd be much more comfortable suggesting an index fund. VHDYX holds stock from 434 companies, so if one of them tanks, it'll hurt much less than owning a larger portion yourself. You can also make deposits from every paycheck without transaction fees and set dividends to automatically reinvest. That method encourages me to save.

I prefer the total stock market approach, although I do buy and sell stocks from time to time. I never expect to make much money from the process, but it's interesting to me. I bet I'd come close to breaking even if I tallied up the gains and losses from buying stocks. It's not a good strategy, but it's 1% of my savings and it's entertaining.

 

[dishdude]

Originally Posted By: Mr Nice
dishdude,

Other non GE companies have the same funds through Fidelity since they manage hundreds of 401K plans from various employers across the USA. Its really not that difficult to find out this info.

Vanguard for people who don't have access to Fidelity.


Not at those expense ratios, so it's completely irrelevant information. It's a private plan OP can't access, but we're all happy for you.

 

[Mr Nice]

I opened up a Vanguard account because I maxed out my 401K and IRA through Fidelity. My voluntary pension was also maxed out and can't contribute any more..... so Vanguard total stock market in the best option.

 

[Mr Nice]

Here is the info.

 

[dishdude]

It's an employer sponsored retirement plan! Talk about this with your coworkers.

None of this "info" even remotely applies to anyone here, so I have no idea why you keep posting it.

 

[R80RS]

If you absolutely must invest in an annuity, read this book first.

 

[Mr Nice]

I got a PM asking me to post it, I had deleted it from the other thread.
Annuity is the very last thing you would want to put money in.

 

[ZeeOSix]

I've been doing some reading on no-load (low fees) mutual funds, and looking at what Vanguard has to offer. There are so many out there, and was wondering if someone might know a good low to medium risk (tax exempt preferred) fund worth checking out. If you give the fund symbol I can research it more with some websites I've found.

I was looking at VWLTX (Vanguard Long-Term Tax-Exempt) and VWITX (Vanguard Interm-Term Tx-Ex Inv) as a couple of possibilities.

 

[Bandito440]

Sure thing.

Any gains in a Roth account are tax exempt. So, whichever fund you pick will also be.

Vanguard's Total Stock Market fund will give you exposure to the stock market. So, your risk will be that of the market as a whole. It offers some security in that if a single company went under, it won't hurt much, because the fund had so many holdings.

If you want less risk than that, add some Total Bond Market to the mix.

75% Total Stock Market
25% Total Bond Market

Or something like that.

Being so far from retirement, you can afford risk. When the market corrects, it'll recover before you retire. Your biggest risk at the moment is not maximizing your gains, so I'll still suggest 100% in the Total Stock Market fund for the next 10 years.

 

[Vuflanovsky]

I would agree that if your time horizon is 20 years and you want to make money on the investment rather than have it as a safe holding, then you might be better served to add equities in something like a good balanced fund vs. something like VWLTX or VWITX. The situation with bonds is getting dicey with the coming interest rate hike.

Personally, I wouldn't put money in an indexed bond fund of any kind at this point. They're typically stuffed with Treasuries and the coming months after an interest rate hike(s) might need active management to steer them. The trend is against you.

If you're enamored with Vanguard, it's unfortunate that VWELX has closed to new investors but you may still be able to get it through other sources. It's beaten their index version VBINX ( another option ) by just under a percentage point per year over the last ten with a level of security and growth that might've been appropriate for you. A few of the good balanced funds like VWELX and T. Rowe Price's PRWCX have closed over the last year or so.