sambo
New Member
Cash: $ 1.50
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Joined: 09 Sep 2005
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| ING ORANGE ACCOUNT... |
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i was just checking out the info on the savings account and it does not give me any in depth info. can anybody tell me if there are draw back to this 3.3% rate...i dont like the idea of the accoutn being "linked" to my existing. seems like oppurtunity for unwanted bank fees....thnx for the help
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Fri Sep 09, 2005 6:11 am |
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Rolo
Yo' Daddy
Cash: $ 309.70
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Location: Colorado/Florida
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Linking makes it easy to transfer money between the accounts.
That account is on the up-and-up...no fees or anything.
"Expect me when you see me."
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Fri Sep 09, 2005 12:09 pm |
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AZestatePlanning
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Location: Phoenix, AZ
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Yes, ING is a very good company, have you ever thought of investing in annuities though, right now, Equity Indexed Annuities are doing really great in the interest department. We had lots of clients that made upwards of 16% for the year, one lady even made 24%! It's great because your interest is indexed to the stock market, but they just purchase options and if the market fails that year they simply just don't excersice the options, thus your principle is never going down, only up! Also if you're uunder 75 years of age many companies will bonus you as much as 10% just to invest with them and all annuities (except securities- which I don't reccomend) are principle guaranteed for up to $300,000.00. I believe ING even offers these type of investment vehicles. I am actually an independant agent and contracted with them, if you would like some more information e-mail me or call.
raychille@yahoo.com
602-504-2800
-Rachel 
Arizona Estate Planning
Rachel Johnson
Financial Adviser
Liscensed Insurance Agent
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Fri Sep 09, 2005 6:05 pm |
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Rolo
Yo' Daddy
Cash: $ 309.70
Posts: 1551
Joined: 13 Mar 2005
Location: Colorado/Florida
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quote:
Originally posted by AZestatePlanning
indexed to the stock market, but they just purchase options and if the market fails that year they simply just don't excersice the options, thus your principle is never going down, only up!
So what you are saying is that options trading has NO risk?
"Expect me when you see me."
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Fri Sep 09, 2005 8:27 pm |
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AZestatePlanning
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You don't own the option, the insurance company your invested with does and they don't trade they just choose whether or not they want to excercise the options they have purchased for that year, which in fact does actually make it a no risk investment. Seniors love it cause they haven't the years left to recoup losses in the market, but they can still sort of play with stocks through their annuity.
Arizona Estate Planning
Rachel Johnson
Financial Adviser
Liscensed Insurance Agent
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Fri Sep 09, 2005 9:02 pm |
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Rolo
Yo' Daddy
Cash: $ 309.70
Posts: 1551
Joined: 13 Mar 2005
Location: Colorado/Florida
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quote:
Originally posted by AZestatePlanning
they just choose whether or not they want to excercise the options they have purchased for that year
hmmm. So if they paid for something (option) and they do not use it, then they lost money on buying that option, yes?
"Expect me when you see me."
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Fri Sep 09, 2005 9:54 pm |
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AZestatePlanning
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Here a website explains the basic principles beautifully:
Just understanding the equity-indexed annuities market is a daunting task. "If you've seen one equity-indexed annuity, you've seen one," an actuary said recently. "They're all different."
Equity-indexed annuities guarantee customers a minimum interest rate (often about 3 percent) while offering the potential of higher rates by tying your return to an index like the Standard and Poor's 500.
While it's a lot like investing directly in the stock market, customers don't get the full boost of a rising market. With equity-indexed annuities, the money put down by purchasers isn't invested directly in the stock market. Instead, customers are offered a percentage of how much the index gains over a period of time (not including dividends, which accounted for about 30 percent of the total return of the S&P 500 for the last 20 years), and a guaranteed minimum return if the stock market declines.
At predetermined times during the annuity's life, customers are credited with a percentage of the gain of the index. The schedule varies with each annuity. Some offer annual "indexing," while others use various averages taken over the life of the annuity.
Indexing methods
There are five main indexing methods, each with its own variations and benefits:
The European, or point-to-point, method divides the index on the maturity date by the index on the issue date and subtracts 1 from the result. (Other indexing methods use this same formula, with different data points.) This ignores all the fluctuations between start and finish, and makes this method the simplest both to understand and to calculate. One drawback is that market fluctuations can produce very different results for customers who bought the policy just a few days apart. The method's name comes from European stock markets, where options can only be exercised on their expiration date.
The Asianing method involves averaging several points of the index to establish the beginning and/or ending index. This method can help shield consumers from the risk of a market decline on the maturity date. Some companies take an average of the 12 monthly indices to establish the policy's maturity index level. This method takes its name from the Asian stock markets.
The look-back or high-water-mark method is another popular approach. On each policy anniversary, the company notes the index level. The highest of these is then taken and figured as the index level on the maturity date.
The low-water-mark method uses the lowest of the indices on each of the policy anniversaries before maturity as the level of the index at issue. This method tends to lessen the risk of market decline.
The annual reset, or cliquet or ratchet, method is among the most complicated. The increase in the index is calculated each policy year by comparing the indices on the beginning and ending anniversaries. Any resulting decreases are ignored. Appreciation is figured by adding or compounding the increases for each policy year.
Determining which method will perform best depends on a number of factors.
The percentage of the index's gain that a customer receives is called the "participation rate." These rates vary all over the board, with some companies offering 50 percent and others offering 100 percent or more -- but you have to read the fine print.
For example, a product offered by Physicians Life has a 100 percent participation rate, but it's not based directly on the S&P 500. Instead, customers receive 100 percent of the average of the daily closing prices during the course of a year.
At the end of 1994, the S&P 500 was at 459. When 1995 came to a close, it had risen to 616 -- a pretty hefty 34 percent gain. The average of the daily closing prices during 1995 was 542, a gain of just 18 percent. Therefore, you'd get 18 percent. That's not bad, but if you'd invested in the market yourself, you could have had that 34 percent gain. (It should be noted that mutual funds also have administrative costs, so your actual return would be less than 34 percent.)
Most equity-indexed annuities offer participation rates between 70 and 90 percent, and some place a cap on how much you can gain. If the product has a 14 percent cap, and the market gains 34 percent, you're stuck with 14 percent.
Say you plunk down $5,000 (a typical sum) for an equity-indexed annuity with an 80 percent participation rate and a 14 percent cap. If the S&P 500 goes up 15 percent, you'll gain $600. If you'd invested your $5,000 directly in the stock market, you'd have gained $750.
Many happy returns?
While it would seem investing in the stock market might be a better option, it's also riskier. Equity-indexed annuities are designed to offer a safety net -- that guaranteed minimum return.
Insurance companies cover their costs for equity-indexed annuities by investing the premiums they collect. Companies typically buy coupon bonds to cover the guaranteed minimum return, and call options to cover market appreciation.
How good an investment are equity-indexed annuities? If you had bought one just before the collapse of the stock market instead of investing in the stock market itself, you would be very happy right now!
Before you invest in an Equity Indexed Annuity you will want to read the fine print. There are surrender charges for early withdraw, although most companies now allow yearly withdrawals at set amounts. Notably, the surrender charges often decrease the longer you let the company keep your money. " -
http://www.mostchoice.com/
........." 
Arizona Estate Planning
Rachel Johnson
Financial Adviser
Liscensed Insurance Agent
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Fri Sep 09, 2005 10:01 pm |
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Rolo
Yo' Daddy
Cash: $ 309.70
Posts: 1551
Joined: 13 Mar 2005
Location: Colorado/Florida
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I see; that was very informative. I wondered if something like that existed (a bit early to go annuity shopping for myself, though)...a "hybrid"...because I can never see myself committing to earning only 4%...ever...for any reason.
You can help me refine my financial schedule spreadsheet. At the bottom, I have a simple retirement monthly distribution projection based on my projected investment principal and the following formula:
code:
=E147*(((0.104+0.04)/2)/12)
E147 is my principal. My logic is to invest half into equities and put the other half into an annuity/long-term bond/whatever guaranteed yield ~4%:
Monthly income = annual return [1/2 blue chip average (10.4%) + 1/2 annuity (4%)] divided by 12 months.
Sure, it won't be the same every month, but it is an average and fluctuations are permissable.
Do you have a more realistic expression I can use?
"Expect me when you see me."
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Sun Sep 11, 2005 12:37 am |
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