Index Funds

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JimB
Posts: 43
Joined: Tue Jan 17, 2017 5:56 pm

Index Funds

Post by JimB »

I am interested in indexed fund annuity but to be honest I don’t know much about it. I have read you can never suffer a loss just gains. If anyone can share what you might know about Index Funds I would appreciate it.

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Sad Al
Posts: 106
Joined: Tue Jun 08, 2010 11:50 am

Re: Index Funds

Post by Sad Al »

My mother has an indexed annuity. As with most annuities, if you change your mind in the first two years, the capital is severely penalized. She got through that period. It has not ever gone down, true to that claim. It has gone up. Here's the catch - your upside is limited, usually 2% less than the actual stock market performance. Over time that erodes the earnings power of your money. However, if you don't want to be responsible for your own investing decisions and consequences, it may give you peace of mind, as it does for my mother. A local financial advisor said he always insists on a rider for long term care insurance, which will cost you a little more. Also, this is just one part of my mother's overall investment strategy, so don't put all your eggs in one basket.
Currently following Strategy 91423 @ TSPCALC.COM beginning 12/1/19.

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evilanne
Posts: 1886
Joined: Thu May 14, 2015 6:52 pm

Re: Index Funds

Post by evilanne »

JimB wrote:I am interested in indexed fund annuity but to be honest I don’t know much about it. I have read you can never suffer a loss just gains. If anyone can share what you might know about Index Funds I would appreciate it.
I have gone to some of those free sales pitches but haven't been convinced enough to invest in any. My mother's investment advisor tried to explain one to me recently over the phone that had certain guarantees and also assumable by beneficiaries but I'm a little leery of anything that is that difficult to explain--really would have to go in to understand what he is talking about. I know they are not all bad but you need to be careful.

Scorpio70
Posts: 432
Joined: Thu Dec 24, 2015 11:49 am

Re: Index Funds

Post by Scorpio70 »

Many of the sales reps are selling fear. Sometimes they are correct. I think (just my opinion) that if you have stockpiled a lot of money then 1/3 might be well placed in an annuity. You can take the rest out slowly while leaving it in the market. :)

mindofmush
Posts: 353
Joined: Mon Jul 02, 2012 1:38 pm

Re: Index Funds

Post by mindofmush »

I believe annuities are for people that are incapable or unwilling of taking care of themselves.

If you can manage 2/3 of your retirement account, then you're smart enough to realize that even an indexed annuity will give lower returns than a simple total stock market buy&hold mutual fund; and it doesn't force you to give up your capital.

If you need a constant monthly check, hold 3 years worth of your retirement account in a savings type account and replenish it only when your growth retirement account is up. Three years will last through a recession and recovery without withdrawing from the growth/stock account. You don't have to take any losses by withdrawing from the growth account when it's down.

When the TSP changes take effect, you might even be able to withdraw from the G fund only while letting the rest of your money grow, we'll see.
mo meng, mo ching (which loosely means: no money, no life)

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JimB
Posts: 43
Joined: Tue Jan 17, 2017 5:56 pm

Re: Index Funds

Post by JimB »

Thank you for your replies. After giving it some thought I think I can do better investing in an L fund when the time comes. I will be retiring at the end of July and will continue to invest my monies the same way I’ve invested in the fantasy fund. This forum and everything I’ve been able to learn here has earned me a good amount of money last year so I’m going to just stick with what works. Thank you all.

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jlozano042
Posts: 836
Joined: Tue Apr 04, 2017 12:37 pm

Re: Index Funds

Post by jlozano042 »

JimB wrote:Thank you for your replies. After giving it some thought I think I can do better investing in an L fund when the time comes. I will be retiring at the end of July and will continue to invest my monies the same way I’ve invested in the fantasy fund. This forum and everything I’ve been able to learn here has earned me a good amount of money last year so I’m going to just stick with what works. Thank you all.
I salute you sir, fair winds and safe travels during your retirement. Looking at your Fantasy TSP you've done very well .... I'm jelly! :mrgreen:

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Fund Prices2021-05-07

FundPriceDayYTD
G $16.58 0.00% 0.43%
F $20.72 0.00% -2.27%
C $63.32 0.75% 13.24%
S $82.16 1.32% 10.72%
I $38.76 1.29% 9.51%
L2065 $13.84 1.02% 11.49%
L2060 $13.84 1.02% 11.49%
L2055 $13.84 1.02% 11.49%
L2050 $28.21 0.84% 9.30%
L2045 $12.88 0.79% 8.73%
L2040 $47.05 0.73% 8.19%
L2035 $12.44 0.67% 7.54%
L2030 $41.46 0.61% 6.91%
L2025 $11.77 0.48% 5.47%
Linc $22.89 0.23% 2.76%

Pending Allocations

Under development. For now, you may view Pending Allocations by going to "fantasy TSP" and selecting "Leaderboard sort" of "Pending Allocations".

What else

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