Kimo
Recycles dryer sheets
Hey Kimo, I have an identical investment through Great West life. I hate the .9% fee, but love the "floor" it puts under my mutual fund investment. Mine is in a pre tax account
My fund guarantees a 3.75% withdrawal will be available from the fund for the longer of my or my wifes life span. The investment is in a balanced fund, and the 3.75% is based on the balance at the time I start taking withdrawals (base) . Every year on the anniversary date the base that the 3.75% is calculated against is reset to the current balance in the fund, if the balance has grown. If the balance has not grown, the base stays at the original level, so the withdrawal amount will never go down.
Best case the fund performs well enough to overcome the 3.75% withdrawal and .9 % fee. (plus mutual fund fees also). In this case the balance grows and the amount that I can withdraw grows also. Of course in this case, the 1% fee is wasted because I did not need the guarantee.
Worse case, the fund does not perform well and gets eaten up by the withdrawals and fees. Then you still are guaranteed a withdrawal amount at least as large as the original one. (unless the company goes belly up)
The fund balance is mine to do with as I please, I can get out of the program at any time and move the money to a different investment, and take a chunk out for a special need (which decreases my base) Also the balance passes on to heirs if my wife and I get run over by a beer truck tomorrow.
Not for everybody, but I like it
Pinejake, I agree, there are people who hate them but I would never give mine up. I hold a lot of different investments in my portfolio and this is the one I worry about the least......good for you!!!