Finance

Have finance questions? Ask a financial expert online.

Ask an Expert,
Get an Answer ASAP!

This answer was rated:

I have a variable annuity with a rider guaranteeing 5%

interest (about 3% fees). It...
I have a variable annuity with a rider guaranteeing 5% interest (about 3% fees). It will never drop below the highest amount in the account. I am a year past the 7 yrs on it as I have it as an IRA and was planning on using it long term for monthly income. I am being offered a fixed index annuity (10 yr) with an automatic 15% interest that I can take out after 10 yrs or let it also be monthly income and this one will continue to grow even after I start taking money, no fees. I have one advisor telling me one thing and the other telling me something else and now just feel dizzy. The current annuity has about 158k in it. How do I figure out which is best for me. I am just not a financial person other than knowing how to save money. Most of my money is with a group who doesn't understand that I do not want to be in high volatility and am 5 1/2 yrs from retirement. He has told me to ignore the rule of 100 where I should have 61% of my money in safe accounts. I don't know how to get an answer that is good for me and not other people.
Show More
Show Less
Ask Your Own Finance Question
Answered in 4 minutes by:
1/23/2018
Chad EA, CFP ®
Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional
Category: Finance
Satisfied Customers: 2,362
Experience: Federally licensed IRS Enrolled Agent, Certified Financial Planner (R), MBA
Verified

Hi Nancy,

My name is***** can assist you in making a decision.

If you are a year past the 7th year then you are out of the surrender period, which mean you have no penalty if you withdrew all of your funds. You don't necessarily have to change to a new annuity.

Are you comfortable with your current annuity?

Ask Your Own Finance Question

If you are 5 1/2 years from retirement then a variable annuity with certain guarantees will generally be a better fit for you then a fixed annuity.

Ask Your Own Finance Question

Generally Variable annuities will "step up" in value annually and "reset" to a higher value.

The current interest rate environment is that rates are increasing, slowly. Given the overall market currently and the benefits with variable annuities vs. fixed annuities and given your investment time horizon, I would suggest you either keep what you have or exchange your VA for another variable annuity.

___

If I had to make the decision given the information you have provided, I would keep the current policy you have.

Please let me know your follow up questions.

Thank you!

Ask Your Own Finance Question
Customer reply replied 4 months ago
I would get a 15% increase if I change to this other one, automatically. It also increases after you start taking money out where the one I have does not unless you take less than the 5%. It's just that each person is telling me their product is better than the others. How do I know?
Also, At my age, I also cannot afford to lose if the stock market goes down a lot like in 08 and it took forever for me to regain. I don't want to be greedy but having more money is always good in retirement. What do you think about the rule of 100?

I understand what you are going through. Variable and fixed annuities are very difficult and each one involves a separate contract.

What are the insurance companies that the annuities are back by?i

Ask Your Own Finance Question

The benefit of a variable annuity is your locked in and if the market goes down in value, your annual step up value is perserved.

Ask Your Own Finance Question

You have to plan for inflation and if you are 5 years away from retirement your funds have to keep up with inflation.

I am a Certified Financial Planner and have been an advisor for a long time. I have not heard of the rule of 100.

Ask Your Own Finance Question

I did look up the "rule of 100." I don't recommend using the rule of 100.

The basis for your decision should be your projected standard of living while you are in retirement and your income from sources such as pension, SS and your investments.

Then you may decide if you "need" your investment to produce a certain amount of return

Ask Your Own Finance Question
Customer reply replied 4 months ago
Thanks. My investments are all doing fine. I am on track and my adviser wants to be sure there is extra. The annuity I currently have is no longer available but it was with MetLife (Brighthouse). The other one that I don't have is Allianz. There is also the possibility of keeping the one where it is and transferring from my 401k or MM to the new one. But I have family members telling me NOT to do annuities and I've listened to Fishers with Forbes. I don't know why annuities are so hated... I know it's insurance but so is Soc Security.

Allianz is a good company. I would have no problem with that selection. Metlife is (of course) a great company too. Both firms offer good variable and fix annuity products.

I think annuities are hated because the riders aren't free. Annuities do have higher internal charges, which is in exchange for the guarantees.

From my perspective, if you are not comfortable with market fluctuation, getting close to retirement and still have a long life to live then a variable annuity may be a good fit for you.

Before you put your 401K into an annuity, just ensure you won't have possible liquidity problems. Generally, you want a reserve you can access for emergencies without having to pay a penalty.

Please let me know your thoughts!

Ask Your Own Finance Question
Customer reply replied 4 months ago
I agree. I would not put all of it into an annuity, just some. I definitely want use to be able to have easy access to my money as I need it. Also, I could always take the full amount at maturity...Now I have to learn about capital gains....some other day. I can always put more into my variable annuity if I wanted to, I think...maybe not now. I was drawn by the 15% bonus on the Allianz. I have enough investments elsewhere to be able to leave money for 10 yrs in Allianz. You are totally right though about the step up value being preserved. I am a nurse and much better at running my business in research than in figuring out all the finance stuff. I try to be intelligent about it, just doesn't seem to soak in! Thanks for all of your advice. I was thinking I needed to talk to someone who doesn't have any skin in the game with my investments. Glad you were available.

Variable annuities are a bear to tackle. The 15% bonus is an attractive offer.

From our discussion, I believe you are very intelligent and well prepared to make a good decision.

The good news is... you don't have to make a decision today and I will be here to help you with any additional questions.

If you do have any questions please let me know!

Chad EA, CFP ®
Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional
Category: Finance
Satisfied Customers: 2,362
Experience: Federally licensed IRS Enrolled Agent, Certified Financial Planner (R), MBA
Verified
Chad EA, CFP ® and 87 other Finance Specialists are ready to help you
Ask your own question now
Was this answer helpful?
Ask Chad EA, CFP ® Your Own Question
Chad EA, CFP ®
Chad EA, CFP ®
Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional
Category: Finance
Satisfied Customers: 2,362
2,362 Satisfied Customers
Experience: Federally licensed IRS Enrolled Agent, Certified Financial Planner (R), MBA

Chad EA, CFP ® is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Rakhi Vasavada

Rakhi Vasavada

Financial and Legal Consultant

2,608 satisfied customers

Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years

Megan C

Megan C

Certified Public Accountant (CPA)

2,218 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

Manal Elkhoshkhany

Manal Elkhoshkhany

Tutor

1,920 satisfied customers

More than 5000 online tutoring sessions.

JKCPA

JKCPA

CPA

844 satisfied customers

Bachelors degree and CPA with Accounting experience.

Eric

Eric

Financial Manager

559 satisfied customers

Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.

R. Klein, EA

R. Klein, EA

Accountant

480 satisfied customers

TurboTax Expert. QuickBooks Certified Pro Advisor

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

332 satisfied customers

NASD Licensed Rep, 1997-2001, Business Attorney

< Previous | Next >

Related Finance Questions
Merrill Lynch, has these restrictions on us cashing out my
Merrill Lynch, has these restrictions on us cashing out my wife's 401K. She is still employed there and she is only 50 years. old. However we see what's going on here the next thing to get looted by t… read more
Dimitry K., Esq.
Dimitry K., Esq.
Attorney
Doctoral Degree
332 satisfied customers
I just want to know what the difference between the AFR and
I just want to know what the difference between the AFR and the Adjusted AFR is. A very close family friend is lending me money of debt consolidation over 4 to 6 years (mid-term loan) and we need to k… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
do I need to file a 1041 after my husband passed away
do I need to file a 1041 after my husband passed away?… read more
Bill
Bill
Master's Degree
2,278 satisfied customers
What is the max contribution to a sep ira? would we
what is the max contribution to a sep ira? would we considered a business expense or be deducted from personal tax… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Over 50 taxpayer made the following non-deductible IRA
Over 50 taxpayer made the following non-deductible IRA contributions which were immediately converted to Roth's.Mar 2016 $6500.00 for 2015 Contribution converted to ROTH March 2016 Mar 2016 $6500.00 f… read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
1,027 satisfied customers
I am inheriting $200,000 from my deceased father's IRA. They
I am inheriting $200,000 from my deceased father's IRA. They want to send me a lump sum but I don't understand the tax ramifications of that. The form they sent says they will withhold 10% for income … read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
Question on SEP IRA contribution A client has Sch C Income
Question on SEP IRA contributionA client has Sch C Income and also 100% owner of a scorpFor 2017 he took 40k in wages...Did a salary deferral of $18k and did employer contribution of 10k.Question is w… read more
Carter McBride
Carter McBride
LLM
1,077 satisfied customers
What is the dealine to open a ira account and how much can
what is the dealine to open a ira account and how much can you get back on your taxes for opening a ira account… read more
Chad EA, CFP ®
Chad EA, CFP ®
CERTIFIED FINANCIAL PLANNER TM, Professional
2,362 satisfied customers
In April of 2017 I made a 2016 Traditional IRA contribution.
In April of 2017 I made a 2016 Traditional IRA contribution. Within a few days (before tax day) I rolled it over into a Roth IRA (backdoor method) due to my income. In December of 2017 I made a 2017 T… read more
taxmanrog
taxmanrog
Master\u0027s Degree
944 satisfied customers
Move to another IRA. I currently have Rollover IRA with one
Move to another IRA. I currently have Rollover IRA with one investment company, and want to move all my funds to another investment company, and close the account with the first investment company. I … read more
Chad EA, CFP ®
Chad EA, CFP ®
CERTIFIED FINANCIAL PLANNER TM, Professional
2,362 satisfied customers
Have a Traditional IRA and Roth IRA I contribute to. The
Have a Traditional IRA and Roth IRA I contribute to. The Traditional IRA my employer matches my contribution. Question, does this mean I am covered by a retirement plan at work? I am reviewing questio… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
I had a question on moving an IRA account from a bank IRA to
I had a question on moving an IRA account from a bank IRA to a brokerage IRA. My uncle went to his local bank and let them know he wanted to move his account. They issued him a check but it's thebfina… read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,129 satisfied customers
If I wanted to default on my 401k loan,and the loan is ...
If I wanted to default on my 401k loan,and the loan is taken out of my pay checks, how would I be able to default?… read more
The Geezer
The Geezer
Master's Degree
120 satisfied customers
I am self employed with a single-member LLC - I want to set ...
I am self employed with a single-member LLC - I want to set up a self employed 401K plan with a 1 for 1 matching component. Is the matching rules the same as the profit sharing rules where the maximum… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Question about SEP-IRA excess contribution removal. I am the
Question about SEP-IRA excess contribution removal. I am the employee and also own the company and I contributed approx $9000 too much into the SEP-IRA acct. I have caught the mistake before the end o… read more
Charles Greiner
Charles Greiner
Owner
Bachelor's Degree
2,436 satisfied customers
I am 71 years old and still working. I have taken a RMD from
I am 71 years old and still working. I have taken a RMD from my IRA. Do I have to take a RMD from my 401k and 403b now or only after I retire??… read more
Bill
Bill
Master's Degree
2,278 satisfied customers
I have a life insurance policy from Prudential (variable appreciable
I have a life insurance policy from Prudential (variable appreciable life) that my parents started for me when I was a little kid. The total death benefit is about $79k, and i have about $5400 in poli… read more
Rakhi Vasavada
Rakhi Vasavada
Financial and Legal Consultant
Bachelor's Degree
2,608 satisfied customers
I am a employee of JP Morgan Chase and need to disolve my 401k.
I am a employee of JP Morgan Chase and need to disolve my 401k. How do I do this while still an employee? With the loss of my salary cut by almost half, because of the economy, there is no other way f… read more
Ed Johnson
Ed Johnson
Senior HR Consultant and Business Devlpm
Bachelor's Degree
6,994 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x