Decent annuity rate?

jamesd

One other option may be investing. You're only getting 6.15% or 6.81% level and both look to be below long term investment returns. So if you are prepared for the investment risk, you might prefer that. Or not. Depends on your attitude to risk.

Provided you're prepared to take the exchange rate risk you appear to be getting quite decent offers for the amount of money involved. It would be worth checking the charges to get the annuity payments to the UK though. An annual payment option might be worth going for if they offer that, just to save transfer costs. On only £128 a month the costs could be 10-20% of the income.

dunstonh

I know Commission was abolished in the UK on advised cases, as well as lot of the other things you're stating. Do you have an opinion on the original question, or are you just interested in picking away at people's opinions?

Ok, one comment would be how did you obtain a 15 year guarantee quote when the legislation to allow that sort of period does not change until 6th April? Currently, the maximum guarantee allowed is 10 years.

We don't tend to assume because we have PhDs and know more than our clients that gives us a right to be rude or condescending, for example.

But surely you would correct people who have incorrect opinions and basing important decisions on misconceptions?

jamesd

dunstonh wrote: »

Ok, one comment would be how did you obtain a 15 year guarantee quote when the legislation to allow that sort of period does not change until 6th April?

TIAA-CREF isn't subject to UK law, being the US pension scheme comparable to a combined university and teacher's scheme in the UK.

dunroving

dunstonh wrote: »

Ok, one comment would be how did you obtain a 15 year guarantee quote when the legislation to allow that sort of period does not change until 6th April? Currently, the maximum guarantee allowed is 10 years.



But surely you would correct people who have incorrect opinions and basing important decisions on misconceptions?

If you read my posts, you'd see the answer. The annuity is based in the US.


There is no such thing as an incorrect opinion. Only an incorrect point of fact. Just the idea you feel the need to "correct" people's opinions says a lot.


Maybe there's something about this thread that has set you off, as in my limited experience on the board you have provided helpful advice elsewhere. I still haven't seen you offer any factual information relevant to the original question, only tried to point out how dumb some of us are.

Bootsox

dunroving wrote: »

In particular, it seems impossible to obtain "light touch" advice. You either have to dive in and pay gobs of money for on-going advice and management of your finances or go completely DIY.

This one paragraph captures the situation in a nutshell.

dunroving

Bootsox wrote: »

This one paragraph captures the situation in a nutshell.

I'm not trying to start a war on IFAs, as I am sure there are many good ones who don't like being tarred with the same brush.


Unfortunately, some professions are associated with dodgy practice, or incompetence, or ... whatever, you name it. Car sales, car mechanics, real estate agents, bankers, whatever, I wouldn't want to be in any of these professions.


I'm just going on my own personal experience with 4 IFAs (well, 5 if you count the last one, who I eventually decided I wouldn't touch with a 20-foot barge pole). For people supposedly in service professions, I didn't think they were very service-oriented. All of them didn't listen, charged what I thought were exorbitant charges for simply running a few stats through a computer and giving me glossy reports, and were pushing me towards on-going "portfolio management" and other services I very clearly said I didn't want.


I followed the advice of two of them, and it ended up being bad advice. I decided against the advice of the other two and I ended up being glad I did.


All I want is the advice of a professional, with explanation of the why's and the wherefore's on my plan, and clues on anything major I am missing, and then let me decide what to do. Am I misunderstanding how annual pension limits are calculated, am I too heavily invested in emerging markets for someone approaching retirement, am I missing any important tax implications, etc., etc. Every one of the local IFAs I have approached wants to meet up with me in some swanky Gent's Club and discuss how they will oversee my portfolio over the next 20 years. No, that isn't what I said I wanted!! Are you not listening???


Jamesd's posts are the perfect example - illustrations, explanations, suggestions, etc., that answer the question I asked and give me the various perspectives and allow me to make my own decision.


Sorry, this is taking the thread off-topic, except it is relevant - I asked for help in understanding "Is this a good rate of return and guaranteed income?" I would gladly pay a flat fee to a decent IFA for information to help me answer this question but it seems very difficult (at least with the ones I have approached) to get away from the car sales approach ("Well if you want this, then let me help you with that, and how about a £300 paint protection guarantee?")

dunstonh

Unfortunately, some professions are associated with dodgy practice, or incompetence, or ... whatever, you name it. Car sales, car mechanics, real estate agents, bankers, whatever, I wouldn't want to be in any of these professions.

You must be the ultimate daily mail reader.

I'm just going on my own personal experience with 4 IFAs (well, 5 if you count the last one, who I eventually decided I wouldn't touch with a 20-foot barge pole).

It was 2 earlier. Now its 4 or perhaps 5.

For people supposedly in service professions, I didn't think they were very service-oriented. All of them didn't listen

This thread may be a good reason as to why. The information has been coming in bits and pieces and changes as we go on. You say you know what you want but you are comparing against products that are not available to you.

You mention lifetime annuity with a 15 year guarantee but a lifetime annuity cant have a 15 year guarantee. It then turns out it isnt a lifetime annuity but a US based scheme. Yet you are still comparing pension annuities despite not being able to have one.

Admittedly, your thread was not helped by a first time poster taking bits off topic but they too responded thinking you were talking about lifetime annuities.

Jamesd's posts are the perfect example - illustrations, explanations, suggestions, etc., that answer the question I asked and give me the various perspectives and allow me to make my own decision.

James answers are fine. However, what about taxation? US taxation is going to come into play here as well as UK. Possibly double taxation. Some tax wrappers may not apply to you depending on your US tax position.

All I want is the advice of a professional, with explanation of the why's and the wherefore's on my plan, and clues on anything major I am missing, and then let me decide what to do. Am I misunderstanding how annual pension limits are calculated, am I too heavily invested in emerging markets for someone approaching retirement, am I missing any important tax implications, etc., etc. Every one of the local IFAs I have approached wants to meet up with me in some swanky Gent's Club and discuss how they will oversee my portfolio over the next 20 years. No, that isn't what I said I wanted!! Are you not listening???

You are contradicting yourself. You are asking for portfolio advice but then say you dont want portfolio advice. No wonder you are having problems. You cap it off by having a chip on your shoulder about a range of occupations making out that you think you are morally superior to others.

sandsy

As James mentioned, one thing you need to consider is future exchange rate movements.


Another issue that may be in your favour is the way HRMC tax foreign retirement annuities as there is a 10% deduction and only 90% of the income needs to be declared for tax purposes.

dunroving

dunstonh wrote: »

You must be the ultimate daily mail reader.



It was 2 earlier. Now its 4 or perhaps 5.



This thread may be a good reason as to why. The information has been coming in bits and pieces and changes as we go on. You say you know what you want but you are comparing against products that are not available to you.

You mention lifetime annuity with a 15 year guarantee but a lifetime annuity cant have a 15 year guarantee. It then turns out it isnt a lifetime annuity but a US based scheme. Yet you are still comparing pension annuities despite not being able to have one.

Admittedly, your thread was not helped by a first time poster taking bits off topic but they too responded thinking you were talking about lifetime annuities.



You are contradicting yourself. You are asking for portfolio advice but then say you dont want portfolio advice. No wonder you are having problems. You cap it off by having a chip on your shoulder about a range of occupations making out that you think you are morally superior to others.

You illustrate my point about not listening.


In your last post, you didn't realise it was a US annuity.


You have mis-read (or are deliberately misrepresenting) my point about 4 IFAs (I didn't once say there were 2, I said there were 4 - 2 in each country. 2 x 2 = 4). The 5th is one I didn't actually use, which is why I didn't mention him in the first post. What do you not get about "5, if you also count the one ...."?


Pedantic selective (and incorrect) nit-picking - you still haven't offered any useful information on the original question.


I have never been a Daily Mail reader in my life. I didn't say I HOLD those opinions, I was referring to how widespread the popular opinion is (probably via rags like the Daily Mail). Don't tell me you have missed the news about bankers over the past 8 years?


What products "are not available to me"?? US annuities? Yes they are. UK annuities? Yes they are.


And yes. it IS a lifetime annuity, with a 15 year guarantee. It is guaranteed for life, or 15 years, whichever is the longer ... what is it about this that you think is incorrect?


I honestly don't understand what your reason is for posting in this thread as you don't seem to have the slightest interest in the question I posed.

dunroving

sandsy wrote: »

As James mentioned, one thing you need to consider is future exchange rate movements.


Another issue that may be in your favour is the way HRMC tax foreign retirement annuities as there is a 10% deduction and only 90% of the income needs to be declared for tax purposes.

Thanks for bringing those two things up. Luckily, I can have the annuity (and any other withdrawals if I don't go that route) wired by TIAA-CREF at no charge, to a UK or US bank account, in either GBP (at very close to the mid-rate) or USD. Except if the exchange rate goes completely pear-shaped I'd likely have the payments regularly converted to GBP to spread the volatility in the GBP/USD.


Re: The 90% discount on the amount taxed by HMRC, I have learned that from another forum but I appreciate you pointing out this advantage as it helps with the calculations.


Overall, as this is only a minor part of my US and UK pension investments I will likely go with the US-based annuity opportunity as from the information I can find, no UK annuity would come close. I have the flexibility across UK state pension, SIPPS, ISAs, US Social Security, TIAA-CREF 401a, and a UK defined benefit pension to do some of the alternatives suggested here. I'll retire on a pretty modest income (despite the number of different sources!)and am trying to balance good value/security/protection of capital with maximum simplicity!