Fixed Immediate Annuity for retirement?

[miket]

Looking into ways to have some income when I retire, preferably without depleting the original investment. Basically expect to be able to live off about 5% of the investment. Would like something with low risk since I will no longer be working.

I have been looking into annuities, and thinking a fixed immediate annuity will work? Will be way before I turn 62.

Have researched ita bit, but its not real clear what would be best. Any info or other ideas would be appreciated

[Bill M]

I would contact/meet with a financial planner.

[easeup]

where are you Shane?

[unclefish]

My FIL has been living off dividends for the last 20 years (he's now 86). He's averaging about 9% over that span and he primarily invests in CEF's (closed end funds). His principal has basically stayed intact during that time (I think he is down 3% overall. He would laugh at 5% yields.

[Shane]

An immediate annuity will pay you income comprised of principle and interest that will liquidate your principle over time.

[miket]

An immediate annuity will pay you income comprised of principle and interest that will liquidate your principle over time.

Looking at CEFs, but looks like the money may be locked up indefinitely?

Shane, didnt realize that. Thats unfortunate. Im looking for something that is for a term, maybe 5 or 10yrs, but want to keep the principle intact, but accessible after the term. At some point, maybe in my 60s, I will be less concerned about using the principle.

[Atfulldraw]

Where do you have the money now?

Lots of people getting 5% in a savings account right now.

Dump it there while you are waiting and looking around.

[CTR0022]

Where do you have the money now?

Lots of people getting 5% in a savings account right now.

Dump it there while you are waiting and looking around.

X2, lots of short term CDs paying 5+ % as well.

[miket]

Yall will probably roll your eyes to this, especially the guys that are more well off.
I have no investments in anything other than my business. No 401k, nothing. I had been reinvesting all my cash back into the business until recently.

Other than raising my kids, the sole purpose for my years of work as an employee, then employer, is to buy land and live how I want and debt free. The cash I have on hand are to buy the land ( 224ac purchase in process right now ) and build a house. This will take most of my cash on hand at this moment. Then I will sell my equipment and current house and 10ac. This will be approx $700k ( worst case scenario ) depending on the market when I sell. Taxes will hit me pretty good but thats a rough estimate based on tax appraisal value and value of my machines. This will be a year away at absolute minimum and I do expect to keep making money until then. ( oil related business so who knows.... )

[unclefish]

Looking at CEFs, but looks like the money may be locked up indefinitely?

CEF's are just like stocks in that you can buy and sell anytime.

[miket]

I do fully expect some to think its dumb to not continue the business, and also invest somewhere and get rich. But Im not getting any younger and I have seen to many guys put things off till its too late, and they are too old to live their dream. Way too many. Piling up money has no draw to me. The only reason I would ever want to be rich is to buy my land and live on it, doing what I want. The cash itself means nothing.

I have made efforts to find a way to get the business to the point that it sustaines itself, so I could have the best of both worlds, but have absolutely failed in finding someone who can do what I do effectively. In the end ( this sounds conceited ) but the success of the business has been due to my ability to do so many things well. Some things extremely well. I have been unable to find anyone with enough drive and skill to even train to replace me. The high profit margins I have been enjoying would be eaten up by the 3 people I would have to hire, even if they were capable ( only one would need to highly skilled, the rest of the work is low skill labor ).

Guess Im stuck and cant break out from being a small shop. Common issue, I hear. In the meantime Im running ragged all day, every day and its not much of a life. Getting time to move on.

[BertramBass]

I would talk to a financial adviser. Maybe try to max out the contribution for the year in an IRA if you can. Open an individual investment account and store cash in your core account temporarily until you need it. I believe the Fidelity SPAXX money market core account is around 5% right now with interest rates possibly going up and quick access to the $$$. Dable in the market if you can, CSQ is a good closed end fund with good holdings and dividends. I am no stock pro and I can tell by some comments on here in other threads some guys are really good, but for some reason the market and investing is not a very hot topic on TBH. Start investing now. Do LOTS of research if you don't want to use an advisor. Good luck. I like Charles Payne on FOX business news at 1PM during the week. He helps make it all easier to understand IMO.

[tps7742]

If you chose an annuity make sure you truly understand it and don’t go on just what somebody tells you. They have allot of moving parts and all the upfront fees can get expensive in some of them. Guess who received some those fees I mentioned? It was my fault but that unethical FA lost my business. I learned the hard way, trusted the wrong person and didn’t ask enough questions. That was the first time I didn’t fully understand my investment. I still made money but not it’s full potential of the amount I invested initially.

Mike T you are investing in what is best for you and in what you know. It sounds like you are doing very well for yourself and family. Also, you have a plan, assets as you have stated and are going to sell for your future financial stability. I would bet you are way ahead of most folks in this old world. Good for you.

Sorry for the long post.

[TeamAmerica]

10 year treasury is paying +4% right now. No reason you can't get to a 5% yield with a low risk diversified portfolio. No way I would buy an annuity at your age unless you really are sure of the income level you need to live on until you die! I would get a financial advisor with good references.

[bowmansdad]

Pick several financial advisors, tell them your ideas and what your expectations are. Have them propose a solution with fees fully disclosed and see if you’re comfortable with them. I went to 4 advisors and 2 were evasive about fees, they were eliminated immediately. The other 2 presented proposals and I went with the one that told me it was his job not to lose my money! Been with him 20+ years and money isn’t an issue, lifestyle hasn’t changed, he checks in frequently and returns my phone calls promptly.