Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 04-25-2011, 04:55 AM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
Quote:
Originally Posted by FinanceDude View Post
Fixed annuities have a 30-day "free look" policy. That means you have 30 days AFTER physical delivery of the policy to return it and it is null and void...
Yes... Why do you think that is the case? Why do you think that rule was enacted?


Quote:
Originally Posted by FinanceDude View Post
... Just a little FYI, banks have been selling fixed annuities for 40 years or so!!
Perhaps... but what was once the equivalent of getting a mailer inserted in one's bank statement... or perhaps a real agency or licensed agents located in certain banks...

Has turned into little more than a branch bank representative promoted teller handing over bank customers to insurance companies to be sold an annuity for the return of a fee.

You don't see many of those customer going directly into the insurance agency to stash their savings... do you!
__________________

__________________
chinaco 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 Early-Retirement.org 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 04-25-2011, 07:23 AM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by chinaco View Post
Yes... Why do you think that is the case? Why do you think that rule was enacted?




Perhaps... but what was once the equivalent of getting a mailer inserted in one's bank statement... or perhaps a real agency or licensed agents located in certain banks...

Has turned into little more than a branch bank representative promoted teller handing over bank customers to insurance companies to be sold an annuity for the return of a fee.

You don't see many of those customer going directly into the insurance agency to stash their savings... do you!
Let's not get too overexcited here. The dominant bank-sold annuity is/was a CD-type fixed annuity. This looks like a long term CD backed by an insurer, with a fixed crediting rate just like a CD. There are times when these products can be more attractive than a CD. Where things get iffy is when banks sell EIAs or VAs.

The salesperson is humping your leg to sell you an annuity because the job is commission-based.
__________________

__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 04-25-2011, 12:44 PM   #23
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Brat's Avatar
 
Join Date: Feb 2004
Location: Portland, Oregon
Posts: 5,913
Frankly I would take that 1099 to the bank and ask for a copy of the contract. I would also look at her total asset situation, what % does it represent.

If the OP's mother was sold a product that was not appropriate you may be able to unwind that sale even if it is past to look-over period because of her advanced age and lack of financial sophistication. There is a suitability test.
__________________
Duck bjorn.
Brat is offline   Reply With Quote
Old 04-25-2011, 12:55 PM   #24
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
Quote:
Originally Posted by brewer12345 View Post
The salesperson is humping your leg to sell you an annuity because the job is commission-based.
Oboy, there's some long-lasting imagery being burned into my cerebral cortex.

Next time I step onto anyone's sales floor, let alone a bank or Best Buy, I'm going to have a hard time keeping the smirk off my face.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 04-25-2011, 12:59 PM   #25
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,076
Quote:
Originally Posted by Nords View Post

Next time I step onto anyone's sales floor, let alone a bank or Best Buy, I'm going to have a hard time keeping the smirk off my face.
Think about getting some latex shin guards...
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 04-25-2011, 04:11 PM   #26
Thinks s/he gets paid by the post
Free To Canoe's Avatar
 
Join Date: May 2008
Location: Cooksburg,PA
Posts: 1,738
Quote:
Originally Posted by brewer12345 View Post
Let's not get too overexcited here. The dominant bank-sold annuity is/was a CD-type fixed annuity. This looks like a long term CD backed by an insurer, with a fixed crediting rate just like a CD. There are times when these products can be more attractive than a CD. Where things get iffy is when banks sell EIAs or VAs.
Thanks again gang. I just got back from Mom's house. She brought up the "IRA" and showed me the year end statement. It is labeled "Traditional IRA". It is a few CDs totaling about $30k. The are shown as 4 year CDs and are paying 5.1%. Last year they were all standard CDs and not in an IRA.

I would like to learn more about the stiuation without sticking my nose in, so I will call the bank to learn about what is availble in general terms for an 85 year old seeking a higher interest rate.
__________________
Free to canoe
Free To Canoe is offline   Reply With Quote
Old 04-25-2011, 04:22 PM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Brat's Avatar
 
Join Date: Feb 2004
Location: Portland, Oregon
Posts: 5,913
Humm, is she making MRDs from thes "Traditional IRA" purchased after she stopped employment?

I think there is more to learn here...
__________________
Duck bjorn.
Brat is offline   Reply With Quote
Old 04-28-2011, 04:40 PM   #28
Thinks s/he gets paid by the post
Free To Canoe's Avatar
 
Join Date: May 2008
Location: Cooksburg,PA
Posts: 1,738
Quote:
Originally Posted by Free To Canoe View Post
Thanks again gang. I just got back from Mom's house. She brought up the "IRA" and showed me the year end statement. It is labeled "Traditional IRA". It is a few CDs totaling about $30k. The are shown as 4 year CDs and are paying 5.1%. Last year they were all standard CDs and not in an IRA.

I would like to learn more about the stiuation without sticking my nose in, so I will call the bank to learn about what is availble in general terms for an 85 year old seeking a higher interest rate.
Checked with the bank's investment person over the phone as to what vehicles they can offer for an 85 year old wanting to get more return on their money. His suggestion was a bond mutual fund or an annuity. He was up front with the fact that his annuity was paying 1.5% and he did not recommend it.

The whole thing is bizarre. This is what I think I know. You can't start an IRA if you are over 70 1/2. She has never owned an IRA and has not had any earned income in recent decades.
The 1099-R has the IRA box checked. Also, she showed me the year end paperwork that states "Traditional IRA" (see above). Naturally she does not remember any of the details of what happened.

If it is a mistake, it is a good one. I will leave it alone for now. The only way to know more is to go with her to the bank with the account info and ask. She does not want me handing her finances but then asks me if everything is OK.

If anybody has insight as to how she did so well with the interest rate and why the money is in an IRA format, please post.
__________________
Free to canoe
Free To Canoe is offline   Reply With Quote
Old 04-28-2011, 04:53 PM   #29
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Quote:
Originally Posted by Free To Canoe View Post
If anybody has insight as to how she did so well with the interest rate and why the money is in an IRA format, please post.
I'll only give you my thoughts, based upon the SPIA (Single Preimum Income Annuity) that I/we purchased at the time of my retirement, at age 59.

While the "return rate" (based upon an actuall IRR worksheet) shows just under 5%, that is a misnomer, since the monthly payments contain not only the "gains", but also a return of the preimum I paid.

If I was older, then the rate would be higher. Why? Simply that an annuity (e.g. a "life annuity") is calculated to be paying out less years, and the insurance company can return more of "your" money at that time.

Why is it in an "IRA format" as you say? Well, from my/DW's perspective, our joint SPIA was funded with "qualified" (e.g. IRA) funds. These funds came from a 401(k) account after I qualified, and are pre-tax in nature. That means that I do owe current taxes on the monthly payments I receive. OTOH, the "gross amount" of the preimum I paid for the SPIA is removed from consideration from RMD's at age 70.5, since the policy is considerd to be paid over my/DW's joint lifetime.

I don't know if these points I commented on pertain to your specific situation, but I just wanted to point them out - from a person(s) that actually do have an annuity (or more specifically, an SPIA).
__________________
rescueme is offline   Reply With Quote
Old 04-28-2011, 05:34 PM   #30
Thinks s/he gets paid by the post
Rustic23's Avatar
 
Join Date: Dec 2005
Location: Lake Livingston, Tx
Posts: 3,624
Clif,
just for clarification, what age 'aging parents' are you talking about? As I get older, I hear a lot about 'the elderly' or our 'aging population' and things we are suppose to be susceptible to or thing that we seem to be out right stupid about. I've already figured out I am not suppose to be on the internet, much less be computer literate enough to give advice to the neighbors. My point is, that conversation with your parents may or may not be necessary. I'm still having similar conversations with my kids, so they won't do something financially stupid.
__________________
If it is after 5:00 when I post I reserve the right to disavow anything I posted.
Rustic23 is offline   Reply With Quote
Old 04-28-2011, 09:09 PM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by Free To Canoe View Post
Thanks again gang. I just got back from Mom's house. She brought up the "IRA" and showed me the year end statement. It is labeled "Traditional IRA". It is a few CDs totaling about $30k. The are shown as 4 year CDs and are paying 5.1%. Last year they were all standard CDs and not in an IRA.

I would like to learn more about the stiuation without sticking my nose in, so I will call the bank to learn about what is availble in general terms for an 85 year old seeking a higher interest rate.
Sounds weird........do you have statements from end of 2009? What do they say?
__________________
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
Old 04-28-2011, 10:54 PM   #32
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,450
Quote:
Originally Posted by Rustic23 View Post
Clif,
just for clarification, what age 'aging parents' are you talking about? As I get older, I hear a lot about 'the elderly' or our 'aging population' and things we are suppose to be susceptible to or thing that we seem to be out right stupid about. I've already figured out I am not suppose to be on the internet, much less be computer literate enough to give advice to the neighbors. My point is, that conversation with your parents may or may not be necessary. I'm still having similar conversations with my kids, so they won't do something financially stupid.
I guess my answer is it depends on the condition of your parents. A large percentage of people over 80 have some signs of senility. You couple that with poor hearing and bad vision (My mom has macular (sp) degeneration and wears hearing aids), confusing financial products like annuities, and slick salesman and you have a recipe for seniors to think they are buying X but ending up with something much worse.

For instance the Salvation Army offered her a charitable remainder annuity, she understood that at the end of her life unlike a CD all the money went to the Salvation Army rather than her kids. I told her I was fine with her doing this, but it turns out what appealed to her was the 7% return she'd get for the annuity. Once I explained that much of the 7% was the return of her own money, and not the same as 7% interest rate on a CD, she didn't really want the product. I talked to the man at the Salvation Army and I am convinced that he was not being deceptive it is just that she heard the 7% and thought interest rate, she didn't hear/understand his explanation of the annuity aspect of the product. This is for upstanding charitable organization and a man who doubt is paid on commission.

As for the internet I got my 95 year old grandfather on the internet and this was back in the around 1997 when most people weren't on it. Sadly his widow, who was suffering from dementia that was diagnosed too late, ended up getting taken advantage by a trust officer working for a church. This trust officer manage to undo all the careful estate planning my grandfather put in place, and ripped of the family for between $500K and $1 million dollars.

Just because you giving sound financial advice to your kids now doesn't mean that the situation won't change in 10 or 20 years. Aging happens.
__________________
clifp is offline   Reply With Quote
Old 04-29-2011, 12:45 PM   #33
Thinks s/he gets paid by the post
Free To Canoe's Avatar
 
Join Date: May 2008
Location: Cooksburg,PA
Posts: 1,738
Quote:
Originally Posted by FinanceDude View Post
Sounds weird........do you have statements from end of 2009? What do they say?
See the above for 2010 statement.
The 2009 statement lists the CDs. Tax statement was a 1099-Int. Never a mention of an IRA then or in the past.
__________________
Free to canoe
Free To Canoe is offline   Reply With Quote
Old 04-29-2011, 01:00 PM   #34
Thinks s/he gets paid by the post
Free To Canoe's Avatar
 
Join Date: May 2008
Location: Cooksburg,PA
Posts: 1,738
Quote:
Originally Posted by clifp View Post
I guess my answer is it depends on the condition of your parents. A large percentage of people over 80 have some signs of senility. You couple that with poor hearing and bad vision (My mom has macular (sp) degeneration and wears hearing aids), confusing financial products like annuities, and slick salesman and you have a recipe for seniors to think they are buying X but ending up with something much worse.

For instance the Salvation Army offered her a charitable remainder annuity, she understood that at the end of her life unlike a CD all the money went to the Salvation Army rather than her kids. I told her I was fine with her doing this, but it turns out what appealed to her was the 7% return she'd get for the annuity. Once I explained that much of the 7% was the return of her own money, and not the same as 7% interest rate on a CD, she didn't really want the product. I talked to the man at the Salvation Army and I am convinced that he was not being deceptive it is just that she heard the 7% and thought interest rate, she didn't hear/understand his explanation of the annuity aspect of the product. This is for upstanding charitable organization and a man who doubt is paid on commission.
Interesting. I am betting this is how it is with my mother.

Quote:
Originally Posted by clifp View Post
As for the internet I got my 95 year old grandfather on the internet and this was back in the around 1997 when most people weren't on it. Sadly his widow, who was suffering from dementia that was diagnosed too late, ended up getting taken advantage by a trust officer working for a church. This trust officer manage to undo all the careful estate planning my grandfather put in place, and ripped of the family for between $500K and $1 million dollars.

Just because you giving sound financial advice to your kids now doesn't mean that the situation won't change in 10 or 20 years. Aging happens.
Wow. Incredible. Sorry to hear that but it is good that I do.
It seems that no matter how bulletproof the plan, there is somebody that can and will undo it. Stories like this help to shape my belief that you should do and give what you want while you are still alive to see it through.
__________________
Free to canoe
Free To Canoe is offline   Reply With Quote
Old 08-15-2011, 06:43 PM   #35
Thinks s/he gets paid by the post
Free To Canoe's Avatar
 
Join Date: May 2008
Location: Cooksburg,PA
Posts: 1,738
Quote:
Originally Posted by Free To Canoe View Post
Checked with the bank's investment person over the phone as to what vehicles they can offer for an 85 year old wanting to get more return on their money. His suggestion was a bond mutual fund or an annuity. He was up front with the fact that his annuity was paying 1.5% and he did not recommend it.

The whole thing is bizarre. This is what I think I know. You can't start an IRA if you are over 70 1/2. She has never owned an IRA and has not had any earned income in recent decades.
The 1099-R has the IRA box checked. Also, she showed me the year end paperwork that states "Traditional IRA" (see above). Naturally she does not remember any of the details of what happened.

If it is a mistake, it is a good one. I will leave it alone for now. The only way to know more is to go with her to the bank with the account info and ask. She does not want me handing her finances but then asks me if everything is OK.

If anybody has insight as to how she did so well with the interest rate and why the money is in an IRA format, please post.
Funny what a few pieces of misinformation can lead you to. Found out today that Mom has a traditional IRA and is taking RMDs from it. She renewed the CDs long term in 2006. Getting 5.1% interest. The RMD lead her to believe that she is getting 7%. How she "got" an IRA? Perhaps I was mistaken, perhaps someone else is. Oh well. Everyone is happy.
__________________
Free to canoe
Free To Canoe is offline   Reply With Quote
Old 08-16-2011, 08:14 AM   #36
Recycles dryer sheets
 
Join Date: Jul 2008
Posts: 136
Where have you been?

Lots of banks have been "pushing" annuities for years/decades.

In reality, a lot of CD customers can benefit from them, especially the ones that continually roll them over (heck, a good deal of those folks should have bought bonds or stocks with that money).

As to the issue about insurance companies and banks: Lots of insurance companies have created their own banks. One word: CONVERGENCE

http://www.statefarm.com/bank/bank.asp
http://www.statefarm.com/bank/bank.asp

http://www.metlifebank.com/
Deposit products and services provided by MetLife Bank N.A., Member FDIC

http://www.allstatebank.com/

http://www.nationwide.com/online-banking.jsp
Nationwide Bank, Member FDIC

https://www.usaa.com/inet/ent_logon/Logon
USAA means United Services Automobile Association and its insurance, banking, investment and other companies. Banks Member FDIC.


And investment companies are doing the same

http://www.schwabbank.com/

http://www.tdbank.com/

==============================================

As to the 5.1% fixed annuity. That rate isn't ridiculous if she "bought/opened" the account a few years ago (haven't seen rates that high lately, though).
__________________
TN_INVEST is offline   Reply With Quote
Old 08-17-2011, 11:53 AM   #37
Thinks s/he gets paid by the post
Brett_Cameron's Avatar
 
Join Date: May 2011
Location: South Eastern USA
Posts: 1,010
I was logged into USAA the other day and clicked on the link for annuity information, looked around, sniffed the air and left. Two days later a person from USAA called me and stated I had looked at annuities on the website and offered to "help" me. I told him I would call him back if and when annuities became a potential solution to my retirement income needs.

This was the first aggressive sales pitch I have ever had other than occasional queries from the representatives while I was on the phone with them for other business. Annuities must be lucrative for insurance companies.
__________________
Brett_Cameron is offline   Reply With Quote
Old 08-17-2011, 12:44 PM   #38
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Quote:
Originally Posted by gsparks2 View Post
Annuities must be lucrative for insurance companies.
So is life insurance.

If you have the need for either (life or income policies) than an insurance company can sell you a policy that will fit your needs.

Do they make a profit? Of course; if not, they would not be in the business.
__________________
rescueme is offline   Reply With Quote
Old 08-17-2011, 01:46 PM   #39
Thinks s/he gets paid by the post
Brett_Cameron's Avatar
 
Join Date: May 2011
Location: South Eastern USA
Posts: 1,010
I agree that insurance companies fill several needs and the world is better with them than without them!
__________________

__________________
Brett_Cameron is offline   Reply With Quote
Reply


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


Similar Threads
Thread Thread Starter Forum Replies Last Post
Banks Canadian Grunt FIRE and Money 10 09-15-2008 09:53 AM
Banks Ain't What They Used to Be tangomonster Other topics 13 02-06-2008 10:36 PM
University Peddling Credit Cards TromboneAl Other topics 8 07-01-2007 08:28 PM
help! friend peddling WFG and VUL's bright eyed Young Dreamers 41 01-30-2007 10:19 PM
What are the Banks thinking? ESRBob Other topics 4 12-20-2004 06:38 AM

 

 
All times are GMT -6. The time now is 04:18 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.