Leaderboard

I'm leaving today for vacation! New Zealand.

We could also have a thread on whether moving from a trad to a roth ira makes sense and to who it makes sense. I've run the numbers a bunch of times and I just never see a significant advantage. I know some financial advisors push it because it produces activity but us 99%ers will need our IRAs to afford to retire so avoiding the RMD isn't really all that important.

This fight always reminds me of a thread in the old ATX "tree" forum. A poster named George posted in all caps, and a handful gave him a ton of sh*t about it. He apologized as his eyes weren't the best, and cap were easier to see. I don't have a problem with either, but I respect the rules of which ever "arena" I am in at the time. ALL CAPS on returns though!

Definitely tricky staying within bounds when giving investment advice, I usually stick to making them aware they cannot take losses in an IRA and when you have mutual funds in IRA's, you don't have to track basis, so that's a good place for them. But a lawyer talking to our local EA group brought up a different angle from the perspective of assets and legal protection. In Florida, annuities, pensions (think OJ Simpson), and IRA's are "sheltered" accounts. To him, if you want to buy an annuity, don't use IRA funds but use money from an unprotected brokerage account.

I find all caps harder to read in general, and use mixed-case on tax returns. On those rare occasions all-caps is needed, I get the same issue as Tom, and end up with a lower-case letter for first word in a sentence, names, et cetera - and then have to double-back and fix those. Ugh.

Exactly this. All of the factors that go into choosing appropriate investments should be considered. Look at the entire portfolio and its diversity, retirement and non-retirement accounts, risk tolerance, current age, current and future savings rate, expected retirement age, expected lifestyle, health concerns, longevity. I'm sure I've missed more than a few factors, and that is why I don't give any investment advice.

My knee went to the same school as your knee. Portfolio accounts are different than retirement accounts. I have no issues with annuities as long as they fit the clients situation, but I feel they should stay in the portfolio and out of the IRAs. Tom Longview, TX

When you get back then. Enjoy your vacation!

In general, I agree that annuities don't belong in IRAs. But there may be exceptions. SECURE 2.0 expanded the QLAC provision to allow you to use up to $200,000 of an IRA to purchase a QLAC, and the RMDs on that are eliminated. That may be a reasonable tax strategy for someone whose RMDs force them into a higher bracket. But as has been said, it requires looking at the entire financial picture of the individual.

People had pensions back then and those invested in the stock market also. In surveys, people with pensions don't think they own stock but they do indirectly. There are tons of factors for why the market moves including an increase in leverage, fed moving money into the economy, interest rates, participation rate (as you mention), savings rate and asset allocation. The earnings yield on the S&P500 is 3.35% and that is historically VERY low. That's an inversion of the PE ratio so you can compare it to bond yields. The 10 year risk free bond is 4.08% so that yield of the market needs to come up.

It's a tax return, not an essay. No punctuation either. Same reason.

LOL! I've always viewed all caps as unprofessional and lazy. To each their own!

Exactly! You have very little flexibility without paying huge penalties if you change your mind about wanting money in them. Which leads to annoying commercials about companies that buy them out. If someone wants to pay ordinary tax rates on the earnings, they would be better off to buy 30 year Treasuries and pay tax on the interest when they cash them in.

An equity indexed annuity is a branch of the fixed side of annuities versus the variable side. It's not so much for growth, it's a product for safety with a "touch" of growth. I have no clue the commission rate on these as I haven't sold an annuity since 1991 but variable annuities are the highest commission product a financial advisor can sell you. MANY financial advisors literally make 90% of their sales via annuities for this reason. When I took my series 6 exam (1991) and was licensed to sell annuities (life insurance also) my manager said NEVER put an annuity in an IRA. I took a class to pass my series 7 licensing exam (1992) and the instructor told us that you should NEVER sell a client an annuity and put it into an IRA. By about 1994 the insurance industry had spent a boatload of money and it was deemed reasonable to have an annuity within an IRA. The argument was that the life insurance component and lifetime payment made it worthwhile to be inside of an annuity even though the tax deferred portion was meaningless. You might argue the life insurance is tax free also but you are supposed to ignore that.

I too have my tax prep software set to use all caps. I usually remember to hit the caps lock key, also. I find it's easier to proofread if my data that I entered is in all caps; data in caps stands out from all the smaller text on the forms/schedules. For correspondence and everything else, I prefer this usual upper & lower case. I'm old and I still struggle with using all caps and going back and forth. If I'm entering tax data and hit the shift key, I see the initial letter as small on my screen briefly; but as soon as I move off that field, the software converts any small letters to caps for my viewing pleasure. And, yes, I often start an email to a client in all claps, but luckily Outlook changes that for me!

You have to look at all sides of the situation. My son now has a retirement plan at work. He doesn't need this money at the moment. This IRA was set up in excess of 20 years ago. It's just been sitting there slowly accumulating low interest. Just saying. I certainly wouldn't give this same advice to everyone.

I do just the opposite. I find it harder to type in all caps. I think it goes back to my typing class. I can't stop hitting the shift key when I start a sentence or go to the next field, so I get a lower case letter with all caps behind it and it looks really funky and I have to go back and correct. It is a muscle memory thing with me. I don't mind all caps in returns...it is not a big deal for me, I just don't do it for the reason above. Tom Longview, TX

My initial knee-jerk reaction to the idea of the annuity is why have a tax deferred annuity within a tax deferred account? There's also the potential to lose out on potential growth in years where the market is doing well, and possibly higher exit fees for early withdraw. I would agree with mcb for now that buying a CD isn't a bad idea, especially since many banks are offering the highest rates on the shorter term CDs, so the investor isn't locked in for very long at all.

I just recently advised my son, who has a longtime redundant IRA set up years ago at the Credit Union; to invest it in a short term CD. The Credit Union agreed. He did as advised. He has been getting 0.99% interest and will now get 4.99% and after 7 months , we will re-evaluate.

Interesting answer, not that I agree or disagree with it. For anyone interested in discussing, I'm going to start a separate topic with the idea of this type of investment in retirement plans.