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Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 10796
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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We invested in a Met Life annuity when I retired and it is

Customer Question

Hi. We invested in a Met Life annuity when I retired and it is an annuity that is high risk, in the American Fund and pays 7% per month. It has a rider that allows the annuity to “”re-set” each fall IF the total amount of the annuity is HIGHER than the previous year. Otherwise, it keeps going down per stock market performance and monthly distribution payments. The annuity is based on a 14 .1 year disbursement along with the re-set. The past 2 years we did not pass the previous years total value so we did not get the re-set. So, as of now, we have 12 years left in the plan. QUESTION: 1 ) Are you familiar with this plan by Met Life 2) What kind of plan will allow me to keep my value for the rest of my life and receive 5 - 7 % distribution each month? 3) how do I keep the value of an annuity with no timeline regarding monthly distribution and have distributing for mine and my spouses lifetime? THANK YOU FOR YOUR HELP AND INFORMATION. Chuck
Submitted: 7 months ago.
Category: Finance
Expert:  Lane replied 7 months ago.

1) Yes

2) No such animal

3) You should look at annuitizing the annuity with a "life income with survivor" option.

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You won't get 7% in today's 1/2 of 1% interest rate environment without being willing to ride the ups and downs of the equity market. ... to get that 8+percent AVERAGE that the market ALWAYS does when being measured appropriately (over 6 year market cycles or more)

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ALso if someone is telling you that this thing pays 7% PER MONTH (that's 84% per year)I'm so sorry, but they're misleading you (as annuity salespeople have been known to do).

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Again, to get the kinds of guarantees you're asking for you'll have to settle for the prevailing market rates.

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ANd taking a life income with survivor option as an annuitization option, even in this low intrest rate environment will feel better than the 2+%crediting rate because they're returning the principal to you over time.

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And with a life anuity, you can't outlive it, AND once you live past average life expectancy, you've gotten all of your principal back WITH interest and begin to get ht insurqnce company's money the next day.

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I'm sorry to be the messenger here, but we are in an environment where you either have to accept prevailing rates OR be willing to ride the waves of the market to get those12 and 15% years that come every so often, so as to ake the average back to the high single digits when measured over full market cycles.

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By the way the Mortality and Expense fees (called M&E fees) in that annulty are VERY high.

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YOu might want to take a look at the information I've attached

Expert:  Lane replied 7 months ago.

Please let me know if you have any questions at all.

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If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the faces or stars on your screen, and then clicking “submit")

JustAnswer will not credit me for the work unless you do.

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Thank you!

Lane

I have a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986.