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Should *I* get the gains, or not?
Old 01-11-2007, 10:51 AM   #1
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Should *I* get the gains, or not?

Having become enlightened & educated by the folks on this forum concerning my lack of wisdom on my purchase of a variable annuity, I have cancelled the annuity contract.
(Original post: http://early-retirement.org/forums/i...?topic=11188.0 )

The FA finally did call me & I could hear the fear in his voice. He is concerned that I am going to dump both him & Ameriprise. (Yes, he's right.) He was practically begging (which makes me feel queasy ). At any rate, he has assured me & I am expecting that the $100K I put into the annuity will be back, without penalty or surrender charges, into the Ameriprise Mutual Fund from whence it came by next Monday 1/15. (Once that transaction completes, I will then pursue finding a new home for my retirement ne$tegg.)

So the Ameriprise Annuity had the $100K for about 8 weeks during which time the annuity value has gained $900-$1K. I asked the FA, who gets the gain? Ans: Not me. The value of the MF from which the $100K came, also increased about 1.5% during this time frame, so the $100K would have made $ if I'd left it there & not purchased the annuity. Either way I look at it, I've lost about +/- $1K market gain, by my foolhardy decision of purchasing an annuity.

Should I just chalk up this "loss" as the price of a "lesson learned"?
-or-
Should I pursue trying to get at least part of the gain? If so, any ideas on what steps to take to push the issue?


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Re: Should *I* get the gains, or not?
Old 01-11-2007, 10:53 AM   #2
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Re: Should *I* get the gains, or not?

Just be happy if you get your $100k back. I will be interested to hear what hapens, since 1/15 is a bank and securities market holiday.
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Re: Should *I* get the gains, or not?
Old 01-11-2007, 11:05 AM   #3
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Re: Should *I* get the gains, or not?

Yeah, just another little detail he overlooked when he gave me that date....
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Re: Should *I* get the gains, or not?
Old 01-11-2007, 11:45 AM   #4
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Re: Should *I* get the gains, or not?

Take your $100K, the lesson, and move on. You will loose more than the $1K in the future from other misinformed decisions.

I sat for awhile in a loser fund, becuase I didn't want to walk away - hoping it would come back. I finally got a push and moved along, and now wish I'd done so sooner.
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Re: Should *I* get the gains, or not?
Old 01-11-2007, 12:12 PM   #5
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Re: Should *I* get the gains, or not?

Quote:
without penalty or surrender charges ...
consider yourself lucky!
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Re: Should *I* get the gains, or not?
Old 01-11-2007, 02:37 PM   #6
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Re: Should *I* get the gains, or not?

Hmmmm.... seems very fishy to me...

You should get the increase of at least ONE of the investments... and taking the lower one is 'fair'...

BTW... what would they have told you if the fund had DROPPED 10%? Would they say you now have 90K

But as others have said... probably just ignore it and more on... a cheaper lesson learned than what it could have been...
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Re: Should *I* get the gains, or not?
Old 01-11-2007, 03:36 PM   #7
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Re: Should *I* get the gains, or not?

What I personally would do is wait until I had the $100k back, and then ask where my gains were. Either gain (Mutual fund or Annuity) would be fine. I mean hey, free $1k if they're really interested in being nice. If they say too bad, no harm is done.

In either case, I agree with everyone that you should be thankful that you got the money back at all, I just would hate to leave money on the table.
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Re: Should *I* get the gains, or not?
Old 01-11-2007, 05:07 PM   #8
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Re: Should *I* get the gains, or not?

Based on how VA's work, he will pay a penalty to get out of the contract, as he is past the "free look" period. Since he took the longer surrender and the "free" $2000............... :P :P The contract would state that you lose that, as you needed to hold the contract for a long period of time to "earn" that extra "money"........... :P

It depends on the particular contract whether you get return of principal, or return of principal less surrender. Let's say the contract made $1000. In many cases, you would lose the $1000, but get the principal back. In some cases, if the surrender was 8%, you would lose $7000.........$8000 in surrender minus $1000 in gains..............or net $93,000

If you get the $100,000 back, as they are going to reverse the contract and charge back the FA, while it's not "ideal", it is more than most firms would do.............

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Re: Should *I* get the gains, or not?
Old 01-11-2007, 06:37 PM   #9
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Re: Should *I* get the gains, or not?

Bram, I am delighted to hear that you got out of this annuity without having to pay the 8% surrender charge. I wouldn't expect to also get the gains from the annuity because if they are reversing the transaction, you technical didn't own the annuity.

An average money market is earning about 4.8%/year or .8% over a two month period which is $800. All in not getting the $800 is a relatively cheap price to pay to get out of an investment which would probably cost you more than $2000 year over a 10 year in excess fees.
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Re: Should *I* get the gains, or not?
Old 01-11-2007, 07:15 PM   #10
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Re: Should *I* get the gains, or not?

Thanks for your replies & advice.
It was only on the advice of several here that I even pursued getting the annuity reversed, when I had figured it was "too late" to change things. So I shall forgetaboutit.... the gain... and thank my lucky stars I escaped with my $100K!
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Re: Should *I* get the gains, or not?
Old 01-11-2007, 11:22 PM   #11
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Re: Should *I* get the gains, or not?

Bram....

Yes... a wise decision in the end... and as you said you are a 'winner' by getting it reversed... even though I think you should get something.... as they say hogs get slaughtered...

Move on and don't look back...

BTW... your financial advisor IS feeling the pain now... and he should be.. it was a VERY bad investment... he did it for HIS gain, not yours.. so good riddence there also (when you get it done...)
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