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43 young and leaving Ameriprise
Old 11-20-2012, 11:32 PM   #1
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43 young and leaving Ameriprise

We finally brave enough to fire our advisor and move to Vanguard. We were terrible invertors when managed our own money. It was just bloody bad, period. After paying many years of expensive tuition and we finally want to try our own AGAIN.

We both 43 and plan to retire around or before (even better) 55 when kids leave the schools.
Except one REIT stuck in Roth, Vanguard help us transfer our cash and funds from SPS accounts into Vanguard without problem. We also own the infamous VULs and these are tough parts we try to deal. Did not realize we paid the much front load fees until we really try to understand the numbers from the book. We were only told it is tax free but I guess we were just too naive and too desperate to find someone help us out that time.

Our situation:
House paid off. No debt, no loans. Husband has stable income 100k/yr
Paid off credit card bill every month.
135k in 2 Roth
24k REIT in Ameriprise Roth
300k in 401k
90k in join account
40k in husband VUL, -9k if surrender
20k in my VUL, -180 if surrender
46k in 2 529s
cash enough to last 6-10 month.

I wound like to know if it is worth to exchange VUL to Vanguard Annuities and purchase much cheaper term life insurance? I am not familiar with annuities. Dont want to fall into another trap. We both do not expect to leave too much for our kids. But do think some insurances are necessary before they are on their own.

Love to hear some inputs about what to do with VUL. Anyone done that before?
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Old 11-21-2012, 09:33 AM   #2
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Quote:
Originally Posted by iWanna View Post
We finally brave enough to fire our advisor and move to Vanguard. We were terrible invertors when managed our own money. It was just bloody bad, period. After paying many years of expensive tuition and we finally want to try our own AGAIN.

We both 43 and plan to retire around or before (even better) 55 when kids leave the schools.
Except one REIT stuck in Roth, Vanguard help us transfer our cash and funds from SPS accounts into Vanguard without problem. We also own the infamous VULs and these are tough parts we try to deal. Did not realize we paid the much front load fees until we really try to understand the numbers from the book. We were only told it is tax free but I guess we were just too naive and too desperate to find someone help us out that time.

Our situation:
House paid off. No debt, no loans. Husband has stable income 100k/yr
Paid off credit card bill every month.
135k in 2 Roth
24k REIT in Ameriprise Roth
300k in 401k
90k in join account
40k in husband VUL, -9k if surrender
20k in my VUL, -180 if surrender
46k in 2 529s
cash enough to last 6-10 month.

I wound like to know if it is worth to exchange VUL to Vanguard Annuities and purchase much cheaper term life insurance? I am not familiar with annuities. Dont want to fall into another trap. We both do not expect to leave too much for our kids. But do think some insurances are necessary before they are on their own.

Love to hear some inputs about what to do with VUL. Anyone done that before?
I have never seen a real need for VUL for anyone, and I have been insurance licensed since 1989. A $9,000 surrender would be a tough nut to swallow. If you 1035 exchange to another annuity with vanguard, that surrender will still be enforced. Since yours is so small, you could surrender it and not have to much of a whack. Term is very cheap, and looks like you would only need LI for 15 years or so. Call Ameriprise and see how much penalty free withdrawal your husband can take out. You could 1035 that to a VG annuity or just bite the bullet, pay the taxes, and move on. best of luck.......
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Old 11-21-2012, 09:51 AM   #3
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Many VUL contracts allow annual penalty free withdrawals (commonly 10% but it varies). I would probably surrender amounts equal to the penalty free withdrawal amounts from the VUL each year until the VULs are gone or until the surrender charges decay enough so you feel comfortable surrendering the balance.

Then, if you need life insurance coverage, buy a 10 or 20 year term policy from a good company (preferably a mutual company - which is like a co-op).

Stay away from annuities. IMO at your level of assets you don't really need them and most are junk.
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Old 01-20-2013, 01:26 AM   #4
Confused about dryer sheets
 
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Thanks for the advices. It took me a while to clean this mess. We fired our advisor and moved most assets from Ameriprise to Vanguard. Process was a little bumpy and scary, but so far so good. Although not 100% Ameriprise-free, but we are so happy to dump them.

We stuck with REIT for another 5-6 years in order to avoid the huge fees. In the mean time, we get charged $40 a year for the fee.

Thought I would lose $180 in VUL, but turn out to be $600+ and $9800 for my dh.
For my VUL, I took penalty free withdrawals and get a term life from USAA, and plan to terminate it some time next year.
For my dh's VUL, it is hard to swallow the loss. We opt to withdraw some cash out while wait few more years for the surrender charge goes down. Once the surrender charge goes down, we will purchase new term life and the end the VUL too.

Just counting the fees we saved past two month, it makes me sad (for the past) and makes me happy (for the future). I should have pulled the trigger long long time ago.
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Old 01-20-2013, 02:39 AM   #5
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Glad you got that behind you, iWanna.
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Old 01-20-2013, 02:30 PM   #6
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Quote:
Originally Posted by iWanna View Post
Thanks for the advices. It took me a while to clean this mess. We fired our advisor and moved most assets from Ameriprise to Vanguard. Process was a little bumpy and scary, but so far so good. Although not 100% Ameriprise-free, but we are so happy to dump them.

We stuck with REIT for another 5-6 years in order to avoid the huge fees. In the mean time, we get charged $40 a year for the fee.

Thought I would lose $180 in VUL, but turn out to be $600+ and $9800 for my dh.
For my VUL, I took penalty free withdrawals and get a term life from USAA, and plan to terminate it some time next year.
For my dh's VUL, it is hard to swallow the loss. We opt to withdraw some cash out while wait few more years for the surrender charge goes down. Once the surrender charge goes down, we will purchase new term life and the end the VUL too.

Just counting the fees we saved past two month, it makes me sad (for the past) and makes me happy (for the future). I should have pulled the trigger long long time ago.
We got away from Ameriprise in September 2010 and paid $5600 IIRC for the privilege of dumping our VUL. We thought about waiting until the surrender charge was lower but between the fees and the awful fund selections we bit the bullet and paid the surrender charge. Financially it was one of the best decisions we've ever made. There is an entire thread devoted to our leaving Ameriprise and it included the VUL discussion.
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Old 01-21-2013, 09:47 AM   #7
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congratulations on your escape from a fellow escapee.
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