Think my f-i-l got taken by an annuity/insur company

[obgyn65]

The best answer so far :

I would back away fast.

 

[freebird5825]

I would back away fast. He fired you, without even telling you that you were being fired.

AMF, FIL!

BINGO!

This seems like a pretty tough situation all around. I see other posters have suggested getting your wife, i.e. his daughter, heavily involved. I completely agree. Blood is thicker than water.

You mentioned an email alert coming in, so I can only assume there was already some sort of connection to his accounts in place for you (or was it the Mrs) to have been notified about the trades.

One of the best "talks" I was ever given was by my Trust attorney after I was widowed. He SPECIFICALLY warned about Signficant Others trying to influence my financial decisions. It happens all too often, in his direct experience.

 

[Brat]

One option would be to convince him to revoke the contract 'for now'. He can always change his mind once he has had an opportunity to review it. He can put the $ back in the Fidelity account or establish a Vanguard account to hold the cash until he thinks this through.

One option would be for your daughter to find a fee for service financial advisor to help him invest his savings. You pay the advisor and provide him with a list of suitable professionals.

I agree with other that his lady friend has injected herself into his finances.

 

[JohnDoe]

I was able to talk to my FIL briefly this evening and this is what he said.

He bought a variable annuity probably inside an IRA account since that is what he liquidated.

He was guaranteed a 6% return for the 1st 3 years. His GF showed him her statements and she said she was doing pretty good.

I asked him for the paperwork and he said he doesn't have it yet.

He has no idea what he got into other than he is suppose to get 6% interest and it's a variable annuity.

I would image he'll bring some papers over at Thanksgiving. I don't really plan on discussing it with him any further. I don't want to put down the decision in front of his GF. None of my business anymore.

JD

 

[Dawg52]

I was able to talk to my FIL briefly this evening and this is what he said.

He bought a variable annuity probably inside an IRA account since that is what he liquidated.

He was guaranteed a 6% return for the 1st 3 years. His GF showed him her statements and she said she was doing pretty good.

I asked him for the paperwork and he said he doesn't have it yet.

He has no idea what he got into other than he is suppose to get 6% interest and it's a variable annuity.

I would image he'll bring some papers over at Thanksgiving. I don't really plan on discussing it with him any further. I don't want to put down the decision in front of his GF. None of my business anymore.

JD

I probably wouldn't either. He apparently values his GF's input, so there is only so much you can do anyway.

 

[sheehs1]

I was able to talk to my FIL briefly this evening and this is what he said.

He bought a variable annuity probably inside an IRA account since that is what he liquidated.

He was guaranteed a 6% return for the 1st 3 years. His GF showed him her statements and she said she was doing pretty good.

I asked him for the paperwork and he said he doesn't have it yet.

He has no idea what he got into other than he is suppose to get 6% interest and it's a variable annuity.

I would image he'll bring some papers over at Thanksgiving. I don't really plan on discussing it with him any further. I don't want to put down the decision in front of his GF. None of my business anymore.

JD

Oh my.
You are wise to let it be.

 

[chinaco]

I agree... if it is done, too late. Continuing to discuss it may just cause a rift.... one way or the other.


If the insurance company is strong... it may just represent an opportunity cost as opposed to real loses. For that matter, his deal may guard against loses.


Enjoy the holiday.

 

[target2019]

I was able to talk to my FIL briefly this evening and this is what he said.

He bought a variable annuity probably inside an IRA account since that is what he liquidated.

He was guaranteed a 6% return for the 1st 3 years. His GF showed him her statements and she said she was doing pretty good.

I asked him for the paperwork and he said he doesn't have it yet.

He has no idea what he got into other than he is suppose to get 6% interest and it's a variable annuity.

I would image he'll bring some papers over at Thanksgiving. I don't really plan on discussing it with him any further. I don't want to put down the decision in front of his GF. None of my business anymore.

JD

It really is time to just express your opinion that you don't agree with the move, and then back off. It's a no-win situation for you. If he ever brings it up, just say you did what you could, but can not help him with the details any longer.

I can relate, as in-laws get talked into things too often. They do not understand the tax implications or yield or much else than "we lost $10K." They don't understand volatility or returns or anything else.

Recently he complained about declining dividends on stock he holds. Without my advice, a daughter had him place all stock into a USAA brokerage, and had dividends reinvested. He had no clue, but certainly wanted his dividends being 82 years old.

The point is that once someone turns down your free advice and goes elsewhere, there is little that can be done. The GF involvement is a warning siren, but you can't help him in that department.

 

[nun]

Annuities (other than maybe SPIA) don't get much respect in this forum....and for good reason as most of us are money and investment geeks. But for people who are frightened of money and just want to get a stream of income the variable annuity will satisfy them. It's obviously far from the best way in terms of return, liquidity etc and we all hate the fees, but most people just don't care or understand enough to worry about that. They see 6% return guaranteed in a volatile market and just dive in.

To the OP I would tell your FIL that you don't agree with his choice and why and then leave it alone. You've done you duty, but it is his money.

 

[FinanceDude]

I was able to talk to my FIL briefly this evening and this is what he said.

He bought a variable annuity probably inside an IRA account since that is what he liquidated.

He was guaranteed a 6% return for the 1st 3 years. His GF showed him her statements and she said she was doing pretty good.

I asked him for the paperwork and he said he doesn't have it yet.

He has no idea what he got into other than he is suppose to get 6% interest and it's a variable annuity.

I would image he'll bring some papers over at Thanksgiving. I don't really plan on discussing it with him any further. I don't want to put down the decision in front of his GF. None of my business anymore.
JD

Probably good to leave enough alone. The 6% return is NOT guaranteed, but showing him that will just cause strife. Just enjoy Thanksgiving, and talk about the weather or drink your favorite drink and have fun.........

 

[sheehs1]

Granted this deal is done..but I"d be cautious in believing he is getting a 6% return on his money. I think what he may be getting is a 6% bonus for 3 years. The annuity company is probably charging him 3% to 4% on the cash side.

If he brings it up to you, you might ask "What is the percentage they allow you when you start to take withdrawals? " I don't know of any annuity company that currently allows 6% withdrawals but then I have not looked at annuities the last year or so. Perhaps they have sweetened the deal somewhat. Still, 6% say on $100K is $6,000 taxable income. Whoopdy Whoop. He no longer has access to his principle. When he starts to take his withdrawals they will charge other fees and if he takes more than the 6%, he may really get nailed. A lot of us on this board understand how annuity companies, pay you back with your own money hoping you pass away before you become a liability for them. The percentages are on their side.
I've long thought variable annuities have their place as "at death wealth transfer" vehicle but not as an retirement income vehicle based solely on 2 things. The fees they charge and the fact you loose access to your money.

 

[haha]

Much younger people than your FIL do weird things with money. And it often but not always involves boyfriends or girlfriends, who at a certain stage of a relationship may seem to walk on water.

When something like this hapens and goes bad I just think, I hope at least the sex is good.

Ha

 

[Rustward]

This may not have been the best move the OP's FIL ever made, but there is a seemingly infinite number of worse things that could have happened.

 

[rescueme]

This may not have been the best move the OP's FIL ever made, but there is a seemingly infinite number of worse things that could have happened.

He could have married his GF and left everything to her?

Don't laugh - that's what DW was concerned about after her DM passed and her DF was "catching up" in his later years with his "GF"...

 

[Dog]

My mom did something similar. She took about 1/3 of her portfolio and invested in a 7 yr annuity with a bank (where she holds her CD's). The selling point was that it offered 3% guaranteed interest for 18 months. Her health is bad and I'll be surprised if she lives 7 more years. Nothing I can do now....hopefully she won't need the money anytime soon. They are easy targets.

 

[obgyn65]

I would not mention anything to him about this topic.

I was able to talk to my FIL briefly this evening and this is what he said.