Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Planning on moving from Annuity to IRA
Old 06-22-2015, 07:07 AM   #1
Recycles dryer sheets
 
Join Date: Aug 2013
Posts: 188
Planning on moving from Annuity to IRA

During working years, my wife invested in a MetLife Universal (Deferred) Annuity thru a 403b plan. All contributions were pre-tax. She has been retired 1 year longer than the surrender period, so I think now is a good time to move the money to a rollover IRA with Fidelity. No money has been withdrawn from the annuity yet. I'm looking for advice for forum members who have been thru this process - any advice or comments? Should I expect the balance on the quarterly statement to transfer, or were there other fees?
__________________

__________________
Al18 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 06-22-2015, 12:21 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W
Posts: 5,884
You should be able to easily surrender the annuity (403b) and roll the proceeds directly from MetLife to Fido or Vanguard directly. Suggest that you contact Fido or Vanguard directly via phone, set up an account and ask them to make to request after you sign the papers. Should be a simple deal.

BTW I'm including Vanguard in my response as I think that to be the better choice for fund company.
__________________

__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is offline   Reply With Quote
Old 06-22-2015, 01:04 PM   #3
Recycles dryer sheets
fosterscik's Avatar
 
Join Date: Jun 2013
Posts: 183
I'd check the annuity terms offered in her original contract - she may be better off taking the annuitization. Some of these older annuities were written with old mortality tables (and not updated) which is in her favor (higher payouts) and assumed much better accrual rates (bonds were much more attractive way back when) - again in her favor.

I have an older annuity holding around $100k. It's accruing at 4.75% (guaranteed) and the payout on conversion to an annuity is more favorable than current commercial offerings. I treat this lump of cash as a bond in my asset allocation (a really nice bond) and I have no intention of transfering to an IRA unless the stock market tanks and I see a great buying opportunity.
__________________
fosterscik is online now   Reply With Quote
Old 06-27-2015, 08:49 AM   #4
Recycles dryer sheets
 
Join Date: Aug 2013
Posts: 188
All,
Thanks for the info. This is a deferred annuity, with about 45% in a 3.5% fixed rate investment and the remainder in stock mutual funds. The fees are not defined well in the plans, but based on similar holdings in a rollover IRA, they must be about 4% per year. With those high fees, I see no advantage to holding onto the annuity.
__________________
Al18 is offline   Reply With Quote
Same dilemma
Old 06-27-2015, 09:44 AM   #5
Recycles dryer sheets
kneehigh's Avatar
 
Join Date: Aug 2014
Posts: 89
Same dilemma

If I did the math right, I have an annuity (pretax) that pays 36% annually for 3 years or 8% annually for life. It sound good, but it forces me to take out money that I don't need and pay the tax on it. I could take it out and put it into a roth. The other option is to roll it over to a 403B and hope it gets better than 8% return and still have access to it as needed. I'm leaning towards the latter.
__________________
kneehigh is offline   Reply With Quote
Old 06-27-2015, 09:49 AM   #6
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: 42,156
Quote:
Originally Posted by kneehigh View Post
If I did the math right, I have an annuity (pretax) that pays 36% annually for 3 years or 8% annually for life.
How much of that is the return of your own money?
__________________
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 06-27-2015, 09:58 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,617
Quote:
Originally Posted by kneehigh View Post
If I did the math right, I have an annuity (pretax) that pays 36% annually for 3 years or 8% annually for life. It sound good, but it forces me to take out money that I don't need and pay the tax on it.
I'd do some "what-ifs" with a spreadsheet to see what really produces the best result, and be careful not to let the tax tail wag the dog. Of course the 8% also constitutes return of principal, but if you are young that might still represent a decent return. Expected returns on equities aren't very rosy right now, and neither are expected returns on bonds/cash Also, when you do the numbers don't neglect that taxes will eventually be due, maybe at higher rates.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   Reply With Quote
Old 06-27-2015, 10:12 AM   #8
Recycles dryer sheets
kneehigh's Avatar
 
Join Date: Aug 2014
Posts: 89
I contributed less than half over the years. The other half are employer contribution and interests.
__________________
kneehigh is offline   Reply With Quote
Old 06-28-2015, 09:14 AM   #9
Recycles dryer sheets
kneehigh's Avatar
 
Join Date: Aug 2014
Posts: 89
This is db supplement that I didn't even know I contributed to so to me I just found 100% free money. But reanalyzing the annuity, I did put 50% of my hard earned money. If I take that out, then the return on my principal would be around 3.5% annualized for life if I want. I think I would rather roll it into my 403B (both pretax) and earn the same guaranteed return on a money market and still be able to access it as needed.

Thanks for the tip samclem.
__________________
kneehigh is offline   Reply With Quote
Old 06-29-2015, 11:25 AM   #10
Recycles dryer sheets
robertf57's Avatar
 
Join Date: Jun 2014
Posts: 329
Quote:
Originally Posted by kneehigh View Post
This is db supplement that I didn't even know I contributed to so to me I just found 100% free money. But reanalyzing the annuity, I did put 50% of my hard earned money. If I take that out, then the return on my principal would be around 3.5% annualized for life if I want. I think I would rather roll it into my 403B (both pretax) and earn the same guaranteed return on a money market and still be able to access it as needed.

Thanks for the tip samclem.
Not certain where you are finding 3.5% guaranteed money market returns.....
__________________

__________________
robertf57 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
Planning to Retire in 5 years; Need Moving Information Flex4 Hi, I am... 2 02-17-2012 04:20 PM
planning IRA to Roth IRA conversion in 2010? tmm99 FIRE and Money 64 01-11-2010 06:43 PM
Can I max out my Roth IRA, Trad. IRA, and SIMPLE IRA? thefed FIRE and Money 9 09-24-2007 05:52 PM

 

 
All times are GMT -6. The time now is 04:53 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.