How’s the stock market?

Sharkbiscuit

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Aug 6, 2003
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Correct.

But considering the two options does it really make any sense to contribute?

Option A is a fixed annuity at 3% with a 0.40% total fee.
Option B is an indexed variable rate annuity with the same fee.

If choosing option A, that's a 5.2% return when the employer match is factored in. Seems like a horrible strategy for someone my age.

Not sure why anyone would choose Option B when you could just invest index funds.
Do the compounding interest math taking taxation into effect. Putting that money in an index fund in a Roth IRA is going to be way better from a tax perspective than day-trading bitcoin with it.

Doubling your principle is pretty dank; shame the investment vehicle options suck balls.
 
Nov 10, 2016
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U r right sussle . Contribute 1000 per month , they match 70 $ . 12000 annuall contribution they match 840 free bucks . Tecnically a no brainer , the annuity is another issue .
 

casa_mugrienta

Duke status
Apr 13, 2008
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U r right sussle . Contribute 1000 per month , they match 70 $ . 12000 annuall contribution they match 840 free bucks . Tecnically a no brainer , the annuity is another issue .
Isn't the annuity the whole issue, being that it comes with terms and restrictions, the income taxes upon collecting, etc?

Wouldn't she be better off in terms of growth just setting up IRAs and stashing the money in indexes?
 

grapedrink

Duke status
May 21, 2011
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Isn't the annuity the whole issue, being that it comes with terms and restrictions, the income taxes upon collecting, etc?

Wouldn't she be better off in terms of growth just setting up IRAs and stashing the money in indexes?
Yes, the annuity is an issue. However doubling your investment right off the bat is pretty hard to beat, even if if goes into a crappy vehicle from that point.

I max out my workplace, then max out my Roth IRA next. Those are nice because all of the profits are tax free and you can buy anything with a ticker. You are each allowed to contribute $6k/year.
 
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sussle

Miki Dora status
Oct 11, 2009
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U r right sussle . Contribute 1000 per month , they match 70 $ . 12000 annuall contribution they match 840 free bucks . Tecnically a no brainer , the annuity is another issue .
no, that's not it :foreheadslap:

a 7% match means that if she makes $100k per year and puts $7k into whatever retirement vehicle her employer offers, her employer will match that with another $7k - that's $7000 free money per year. plus it's pretax money, which means she has also reduced her taxable income by $7k for that year.

otherwise, yes, the annuity is another issue.
 
Nov 10, 2016
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no, that's not it :foreheadslap:

a 7% match means that if she makes $100k per year and puts $7k into whatever retirement vehicle her employer offers, her employer will match that with another $7k - that's $7000 free money per year. plus it's pretax money, which means she has also reduced her taxable income by $7k for that year.

otherwise, yes, the annuity is another issue.
 
Nov 10, 2016
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Sussle , wife works for Blue Cross , she gets the match on a monthly contribution, not at the end of the year . If I recall this is a teachers pension and it should be similar .
 
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The variable rate index , invest in the markets , with a clause to change to a fixed rate at your preference . U invest 100 g market takes ioff and account goes to 150 . U can change the account to fixed yield on the 150 , this one being 3 percent. This is the product that cratered Hartford Ins .
 

Sharkbiscuit

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Aug 6, 2003
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Isn't the annuity the whole issue, being that it comes with terms and restrictions, the income taxes upon collecting, etc?

Wouldn't she be better off in terms of growth just setting up IRAs and stashing the money in indexes?
That's math you need to do. FUN! The advantage of a Roth IRA for younger people is no capital gains tax. The effectively doubling your principle is a compelling argument, but if you're taking 5.5% and paying tax 35 years from now vs annualized S&P and paying zero tax, maybe it doesn't wind up being so compelling.

The investment vehicle options sound like they suck. Can't believe I poopoo'd the Vanguard offerings in my HSA.
 

casa_mugrienta

Duke status
Apr 13, 2008
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That's math you need to do. FUN! The advantage of a Roth IRA for younger people is no capital gains tax. The effectively doubling your principle is a compelling argument, but if you're taking 5.5% and paying tax 35 years from now vs annualized S&P and paying zero tax, maybe it doesn't wind up being so compelling.
5.5% would be with the fixed annuity.

The current variable rate annuity she's invested in has an annualized return averaging 8.5% since inception in the early 90s averaging 10-17%/yr over the past 5 years.

My understanding is that only the variable rate annuity is taxed like regular income when you start to withdraw.
 

kelpcutter

Nep status
Aug 24, 2008
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5.5% would be with the fixed annuity.

The current variable rate annuity she's invested in has an annualized return averaging 8.5% since inception in the early 90s averaging 10-17%/yr over the past 5 years.

My understanding is that only the variable rate annuity is taxed like regular income when you start to withdraw.
TIAA has many investment options other than annuities. You can make an appointment with one of their reps and talk through all of your options. Hard to believe her employer matching only allows investment in two annuity options. My wife has a sizable portfolio with them through her employer with no such restrictions.
 
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casa_mugrienta

Duke status
Apr 13, 2008
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TIAA has many investment options other than annuities. You can make an appointment with one of their reps and talk through all of your options. Hard to believe her employer matching only allows investment in two annuity options. My wife has a sizable portfolio with them through her employer with no such restrictions.
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