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EdLaFave

2018 was suboptimal.

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Pushing this up.

I think it's important to keep in mind that some years our portfolios will decline because the markets decline. This should not be a surprise. But it can be for some. Some believe that just because their portfolio is diversified and balanced appropriately, that they are protected against declines. We know that is not how it works.  

My portfolio is not any different than the majority of Bogleheads. As you can read in this thread, most have lost anywhere from -1.0% to -5.0% (not counting real estate or investments outside of the stock and bond markets): https://www.bogleheads.org/forum/viewtopic.php?f=10&t=145610&p=4297509#p4297509

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Steve,

Forgive this silly question, but did you buy an annuity that pays you out a set amount monthly (or perhaps annually) while earning a 3% return? That is my understanding of how an annuity logically fits into one's portfolio as opposed to inside of a 403b. I'm so used to seeing them misused that it clouds my perception of when they are appropriate.

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Steve has an annuity with TIAA that they call "Traditional Annuity". It is really more like what we usually call a "Stable Value" fund, and is similar to a low-cost Fixed Annuity with an unusually high annual interest rate (but with no surrender fee or M&E fee). TIAA guarantees  the rate for the year ahead (and past?) and has a history of keeping the rate higher than most stable value funds. There are several forms of TIAA's Traditional Annuity, some of which require distributions to be spread out over 10 years. Steve's version can be withdrawn without restriction. My wife has had a TIAA Traditional Annuity in her 403b account now for about 40 years. I would prefer she roll it over to Vanguard and use Total Bond Index fund instead, but it's her call.

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49 minutes ago, MoeMoney said:

Steve,

Forgive this silly question, but did you buy an annuity that pays you out a set amount monthly (or perhaps annually) while earning a 3% return? That is my understanding of how an annuity logically fits into one's portfolio as opposed to inside of a 403b. I'm so used to seeing them misused that it clouds my perception of when they are appropriate.

Hi Moe,

What you are talking about is annuitizing. No. this is not annuitizing, or purchasing an annuity so that I can get a fixed amount for the rest of my life. I don't need another annuity as my pension plan is like an annuity. 

TIAA sells great annuities. But the one I have was not bought. It was invested, just like a mutual fund. NO surrender fees, NO commissions, NO ongoing costs, but it has 3.0% fixed return and principal protection AND I CAN MOVE IT ANYTIME. TIAA annuities are more like mutual funds than the hideous annuities sold by all of the other large insurance carriers in the U.S. 

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