Author Topic: Fixed Annuity Accounts  (Read 1254 times)

wing117

  • Stubble
  • **
  • Posts: 149
  • Age: 31
  • Location: North Carolina
Fixed Annuity Accounts
« on: October 14, 2013, 11:34:34 AM »
Mustachians,

I'm confused by Fixed Annuity Accounts and their viability. This confusion comes from the fact that my Mother has her entire retirement savings in an ING Fixed Annuity reaping the huge return of 4% this year. Looking at the indices this year, we've seen a return of roughly 20% since Jan 1.

How/When is a Fixed Annuity an OK investment to make? Are these for extremely risk-adverse investors?

Lastly, how does one transfer the money to a rollover account without loosing a massive amount of money to taxes and penalties?

Specifically, my mother has stated that if she wanted to move her 500K from ING to another account, she'd receive under 400K for transfer as the "Cash Worth" (obviously she can't afford to lose 100K+ of investment)... Long story short, I'm worried she's getting shafted with what money she has left to live on and I'm looking for options and a better understanding of what is going on.

Thanks!

footenote

  • Pencil Stache
  • ****
  • Posts: 801
  • MMMing in MN
Re: Fixed Annuity Accounts
« Reply #1 on: October 14, 2013, 12:27:11 PM »
Find the contract and read it carefully to understand the terms. Many annuities have ruinous "surrender fees," so be very wary of trying to cash it in. Annuities are not usually very liquid instruments.