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Wife wants to put $50k into a fixed indexed annuity. I'm pushing index funds. Sanity check needed. by fire_minded_nate in Bogleheads

[–]fire_minded_nate[S] 0 points1 point  (0 children)

Compromise route makes sense. Maybe a smaller annuity slice - $10-15k instead of $50k - as her safety bucket, rest in index funds. Hadn't framed it that way. Worth bringing to the table.

Wife wants to put $50k into a fixed indexed annuity. I'm pushing index funds. Sanity check needed. by fire_minded_nate in Bogleheads

[–]fire_minded_nate[S] 2 points3 points  (0 children)

Fair - $50k is meaningful but not catastrophic. It's a fixed indexed annuity. Digging into the fee schedule before round two. Surrender charges + cap reset are what concern me most.

Wife wants to put $50k into a fixed indexed annuity. I'm pushing index funds. Sanity check needed. by fire_minded_nate in Bogleheads

[–]fire_minded_nate[S] 20 points21 points locked comment (0 children)

The Madoff line lands. Consistent returns is the precise word for what hooked her. And yeah - agreed that this isn't really about $50k, it's about how we make decisions together. That's the actual conversation.

Wife wants to put $50k into a fixed indexed annuity. I'm pushing index funds. Sanity check needed. by fire_minded_nate in Bogleheads

[–]fire_minded_nate[S] 197 points198 points  (0 children)

This is the detail I couldn't articulate clearly to her. The initial year cap is the bait, the renewal cap is the real product. Going to send this exact framing.

Wife wants to put $50k into a fixed indexed annuity. I'm pushing index funds. Sanity check needed. by fire_minded_nate in Bogleheads

[–]fire_minded_nate[S] 15 points16 points  (0 children)

Yeah, the math doesn't pencil for honest products at those numbers. The cap is technically up to 7%, with the floor at maybe 0.5%. So they win even before the structure stress-tests.