BLADEMDA

ASA Member
10+ Year Member
Apr 22, 2007
17,410
3,621
Southeast
Status
Attending Physician
OP
BLADEMDA

BLADEMDA

ASA Member
10+ Year Member
Apr 22, 2007
17,410
3,621
Southeast
Status
Attending Physician
OP
BLADEMDA

BLADEMDA

ASA Member
10+ Year Member
Apr 22, 2007
17,410
3,621
Southeast
Status
Attending Physician
The Qualified Longevity Annuity is a good deal if you live long enough:

 
OP
BLADEMDA

BLADEMDA

ASA Member
10+ Year Member
Apr 22, 2007
17,410
3,621
Southeast
Status
Attending Physician
 
OP
BLADEMDA

BLADEMDA

ASA Member
10+ Year Member
Apr 22, 2007
17,410
3,621
Southeast
Status
Attending Physician
Qualified Longevity Annuity Contracts= QLAC

QLACs are also less expensive than a traditional single premium annuity product that begins payouts immediately. As a result, QLACs generally allow a client to generate a larger payout in the future—estimates provide that investing around $80,000 at age 70 will produce an annual income stream of about $12,850 for a man and $11,500 for a woman at age 80. Conversely, the same investment in an immediate annuity would likely produce annual income of about $6,150 for the man and $5,750 for the woman. This provides greater opportunity to invest a larger pool of the client’s retirement assets elsewhere.

Further, QLACs generally remove the responsibility for investing a portion of the client’s retirement assets later in life—many clients may reach an age where they no longer want the responsibility of managing a large pool of assets. The QLAC allows the client to abdicate some of his or her investment responsibility without fear of running out of money late in life.

QLACs can also allow a client to begin claiming Social Security benefits earlier in life, with the expectation that he or she will rely on the QLAC later in life to supplement the reduced Social Security benefit later in life.

http://www.thinkadvisor.com/2015/07/20/pros-and-cons-of-the-longevity-annuity-contract?page=2&slreturn=1471997489
 

IlDestriero

Ether Man
10+ Year Member
Nov 24, 2007
7,605
7,137
The ivory tower.
Status
Attending Physician
Seems like a bunch of shady bs. I'll take my loot pile and take my chances in traditional investments. If it all goes sideways, I'll sell a property.


--
Il Destriero
 

pgg

Laugh at me, will they?
Administrator
10+ Year Member
Dec 15, 2005
12,220
8,341
Not home
Status
Attending Physician
Isn't the point of an annuity that it's insurance to reduce the risk of running out of money in retirement? It's insurance, it has a cost, you are BUYING security, and odds are that the company selling it will make more money off it than you will. Else they wouldn't be selling it. They make their profits off people who think they're special and that they're going to beat the odds.

Why on earth would you, a person who has saved enough money to not only survive comfortably forever on a very conservative portfolio, but to also leave money to heirs, consider an annuity? It's like buying term life insurance at age 70. You don't need it.
 

pjl

ASA Member
10+ Year Member
Oct 29, 2006
917
507
Status
Attending Physician
Isn't the point of an annuity that it's insurance to reduce the risk of running out of money in retirement? It's insurance, it has a cost, you are BUYING security, and odds are that the company selling it will make more money off it than you will. Else they wouldn't be selling it. They make their profits off people who think they're special and that they're going to beat the odds.

Why on earth would you, a person who has saved enough money to not only survive comfortably forever on a very conservative portfolio, but to also leave money to heirs, consider an annuity? It's like buying term life insurance at age 70. You don't need it.
Worse than term life at 70. You know you will die.
They have a place as insurance for living longer than assets. But it is a rare person that should bite on that insurance.


Sent from my iPad using SDN mobile app
 
Dec 1, 2014
1,740
1,614
Seems like a bunch of shady bs. I'll take my loot pile and take my chances in traditional investments. If it all goes sideways, I'll sell a property.


--
Il Destriero
Hey Il Destriero, I PM'ed you sir. Hopefully you can reply when given the chance! Have a few questions for you!
 

caligas

ASA Member
7+ Year Member
Aug 17, 2012
1,394
1,259
Status
SPIAs and longevity insurance are relatively low in fees and have a place in many retirement portfolios as a way to effectively increase ones sustainable withdrawal rate, but at the cost of losing the ability to pass the SPIA premium on to heirs. If you're savings are more than you would ever spend, than they are a bad choice.
 
Last edited:

IlDestriero

Ether Man
10+ Year Member
Nov 24, 2007
7,605
7,137
The ivory tower.
Status
Attending Physician
Part of my strategy is to reduce my spending so that I can't spend it all. I could probably retire today, but it wouldn't be very glamorous.


--
Il Destriero
 
  • Like
Reactions: aneftp

aneftp

7+ Year Member
Mar 23, 2010
1,878
741
Status
Attending Physician
Part of my strategy is to reduce my spending so that I can't spend it all. I could probably retire today, but it wouldn't be very glamorous.


--
Il Destriero
That's what we all face.

I told my wife I was thinking about either taking a job with 18 weeks off and obviously less pay or just working 3 days a week and she thought I was crazy.

I don't owe any student loans. My kids college education prepaid are 100% paid. Plus they have their 529 accounts still growing. My cars always paid in cash. I am still young. But can probably coast to retirement (barring life events). Sure I have my mortgage but it's manageable.

Just told my wife we can only take one big vacation a year. And she looked strange at me.
 

IlDestriero

Ether Man
10+ Year Member
Nov 24, 2007
7,605
7,137
The ivory tower.
Status
Attending Physician
I'll be 80% before long. I think that's plenty. If others want or need to work more, great! They can take my days.


--
Il Destriero
 
  • Like
Reactions: BLADEMDA
OP
BLADEMDA

BLADEMDA

ASA Member
10+ Year Member
Apr 22, 2007
17,410
3,621
Southeast
Status
Attending Physician
I too am ready to slow down a bit. The years take a toll on you.
 
  • Like
Reactions: aneftp

aneftp

7+ Year Member
Mar 23, 2010
1,878
741
Status
Attending Physician
I too am ready to slow down a bit. The years take a toll on you.
My brother anesthesiologist starting cutting back about 18 months ago. He just turned 50. He was making probably close to 600k. But taking in house MD only practice call cardiac plus OB.

It does take its toll on you.

So he's been taking lots of Monday's off. Sure income has taken a hit. Probably making mid to high 400s. But he's out in California. They tax u like crazy out there especially with 11.25% state income taxes for those over 500k now. Plus the 39.6% fed tax. Him and his wife (internist) are duo income

You get to a point why kill yourself. Less work. Spend less. My former collegue loves it now in Florida. He started doing 50/50 job sharing in February. Than AMC took over in July but still letting him job share so he's able to still take 18 weeks off.
 
OP
BLADEMDA

BLADEMDA

ASA Member
10+ Year Member
Apr 22, 2007
17,410
3,621
Southeast
Status
Attending Physician
 
OP
BLADEMDA

BLADEMDA

ASA Member
10+ Year Member
Apr 22, 2007
17,410
3,621
Southeast
Status
Attending Physician
 
OP
BLADEMDA

BLADEMDA

ASA Member
10+ Year Member
Apr 22, 2007
17,410
3,621
Southeast
Status
Attending Physician
I also found it depressing to see that only 50% of docs over 50 are millionaires. Remember this is net worth- home equity, savings account, checking account, retirement accounts, other investments etc. That’s terrible. While I don’t expect every doc to be a millionaire at 40, I don’t think 50 is a particularly high hurdle. I think $2 Million is a reasonable number for a doc to retire on (that’s an income of $80K a year plus Social Security), but when you look at docs at retirement type ages (60+) you see a quarter of doctors still don’t have that, and that includes their home equity! Take away the home equity, and that number would be even higher! I was, however, surprised by just how many 70+ docs had more than $5 Million-about 18%. I don’t know if that is a reflection of “The Golden Age of Medicine,” or simply due to the fact that they were able to invest throughout the 80s and 90s. But clearly, there are still some docs out there who became very wealthy.

http://whitecoatinvestor.com/starting-at-zero/
 
Last edited:
OP
BLADEMDA

BLADEMDA

ASA Member
10+ Year Member
Apr 22, 2007
17,410
3,621
Southeast
Status
Attending Physician
 
OP
BLADEMDA

BLADEMDA

ASA Member
10+ Year Member
Apr 22, 2007
17,410
3,621
Southeast
Status
Attending Physician
With more Anesthesiologists becoming "employees" the ability to maximize the 401K plan to $53,000 is becoming less common. This will have an impact on many Anesthesiologists going forward and not in a good way.
 

aneftp

7+ Year Member
Mar 23, 2010
1,878
741
Status
Attending Physician
I also found it depressing to see that only 50% of docs over 50 are millionaires. Remember this is net worth- home equity, savings account, checking account, retirement accounts, other investments etc. That’s terrible. While I don’t expect every doc to be a millionaire at 40, I don’t think 50 is a particularly high hurdle. I think $2 Million is a reasonable number for a doc to retire on (that’s an income of $80K a year plus Social Security), but when you look at docs at retirement type ages (60+) you see a quarter of doctors still don’t have that, and that includes their home equity! Take away the home equity, and that number would be even higher! I was, however, surprised by just how many 70+ docs had more than $5 Million-about 18%. I don’t know if that is a reflection of “The Golden Age of Medicine,” or simply due to the fact that they were able to invest throughout the 80s and 90s. But clearly, there are still some docs out there who became very wealthy.

http://whitecoatinvestor.com/starting-at-zero/
Reasons why docs don't save
1. Divorce PLUS KIDS
2. Divorce long term marriage (doc at my old place pays "lifetime alimony" $5000/month cause he was married 22 years to non working spouse

Most docs I know who aren't divorce are in very good financial shape

Most docs I know who got divorce without kids are also in good shape.

Issue is 80% of docs not saving end up in situation 1 or 2.
 
  • Like
Reactions: Doctor4Life1769