Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Advising Mom and Dad
Old 09-05-2007, 03:19 PM   #1
Recycles dryer sheets
Join Date: Apr 2005
Posts: 58
Advising Mom and Dad

My parents are both in their 80's. Dad's health is failing and Mom is hanging in there. They own their home, lbtm, and have long term healthcare.

About 7 years ago, they purchase a fixed and variable annuity. The fixed is coming due and the VA has two years left. The fixed annuity is paying just above 3%. There is about $10,000 in this account.

The VA has $90,000 -- I believe they can get a better return without paying the expense and insurance costs. There are 2 years left. If they move the money now, they incur a back-end fee of ~$5500.

They met with a financial planner who I trust and he has recommended moving the fixed annuity into CDs, paying 5 1/2%. What to do with the VA is more troublesome, especially with a exit fees. Even with this back-end fee, he is suggesting a balanced MF and CD with a target of 8%.

I believe my parents should be able to move some of the money out of the VA cost-free based on the age of the VA; 5 years . I think you transfer the funds you can move cost-free to the balanced MF/CD and leave the rest in the VA. In 2 years when the VA comes due, then move the remaining into the MF/CD account.

Any suggestions greatly appreciated.


dwk is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-05-2007, 03:57 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
Join Date: Aug 2006
Posts: 12,484
DO they need the money for anything?

If not, they will take a hit to get out of the annuity because the interest or gains comes out first and it is taxed at ordinary income rates. If their tax rate is fairly low, then it may not be a big issue.

Most VA's have an annual amount you could take out without a penalty. You could start with that amount into the "new plan". Taking a $5500 surrender charge may not be the best course of action. Call the insurance company and ask how much "penalty-free amount" can be withdrawn...........

Some VA's have a "nursing home waiver" where you can take out whatever amount you want without a surrender if the annuitant is in a nursing home and the doctor signs a form stating so.........
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)

This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


All times are GMT -6. The time now is 07:14 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.