Author Topic: Opinions Sought on Financial Matter  (Read 2907 times)

fiver46

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Opinions Sought on Financial Matter
« on: August 07, 2013, 02:31:33 PM »
Hi Everyone!

I've been thinking about possibly liquidating an Annuity Account I hold, which has earned about 6% per year for the past 3 years, and re-investing the money into the Vanguard Total Stock Market Index Fund or something similar.

Any opinions on whether that would be a BAD idea, given that I would incur a $4000 loss in the liquidation process?

I am hoping/thinking that the Vanguard Fund would probably average at least 7.5 to 9% and would thus more than make up any losses in the medium to long run.

Any thoughts/opinions on this issue would be appreciated. THANKS!

Rebecca Stapler

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Re: Opinions Sought on Financial Matter
« Reply #1 on: August 07, 2013, 02:33:15 PM »
What percentage of your portfolio is the annuity?

What percentage of your portfolio is dedicated to other conservative investments?

When do you plan to retire?

fiver46

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Re: Opinions Sought on Financial Matter
« Reply #2 on: August 07, 2013, 02:36:52 PM »
I have about 16 years til retirement. The Annuity makes up about 75% of my total funds invested!

brewer12345

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Re: Opinions Sought on Financial Matter
« Reply #3 on: August 07, 2013, 02:44:36 PM »
What kind of annuity is this?  Variable annuity with guarantees?  Deferred fixed annuity (CD-like)?  Something else?

Rust

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Re: Opinions Sought on Financial Matter
« Reply #4 on: August 07, 2013, 02:46:52 PM »
It's hard to say if it's a bad/good idea based on the limited information provided.

Here are some things to consider with an annuity.

Is the annuity still considered differed? (either fixed (SPDA) or variable (VA))
If fixed is it an indexed annuity?

What is the surrender schedule?
Did you make a lump sum contribution or have you made additional deposits over time?  (reason I ask is most of the contracts I've seen each piece of money has it's own surrender schedule)

Is it qualified or non-qualified?

What other benefits does the annuity have?  (Living or death)

Only with all the information about your contract can a decision if this is "good" or "bad" be made.
« Last Edit: August 07, 2013, 02:48:49 PM by Rust »

Numbers Man

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Re: Opinions Sought on Financial Matter
« Reply #5 on: August 07, 2013, 03:00:25 PM »
It depends on your investing style. If you can't sleep nights with the daily fluctuations and paper loses in the stock market then keep your annuity. If I was asked by a relative what to do, I would say take your lumps and transfer the annuity proceeds to Vanguard. Don't forget to send the broker that sold you that crap a Christmas card every year thanking him for the crappy investment he sold you.

ArtieStrongestInTheWorld

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Re: Opinions Sought on Financial Matter
« Reply #6 on: August 07, 2013, 03:28:17 PM »

I am hoping/thinking that the Vanguard Fund would probably average at least 7.5 to 9% and would thus more than make up any losses in the medium to long run.



Hmm, this seems a bit hopeful.  Aren't historical returns around 7%?

pbkmaine

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Re: Opinions Sought on Financial Matter
« Reply #7 on: August 07, 2013, 04:26:05 PM »
If it's TIAA-CREF, probably does not make sense to liquidate, since they have very low cost annuities. If no, need more info. Does your annuity have surrender charges that go away? It would help to know the name of the product.