kyounge1956
Thinks s/he gets paid by the post
- Joined
- Sep 11, 2008
- Messages
- 2,171
When you've made a financial blunder, do you tend to just get the pain over with, and chalk up the loss to experience, or do you try to minimize the loss even though it may take a long time?
Here are the particulars: at the beginning of 2004, I opened a Roth IRA account with Ameriprise and was sold a variable annuity within the account. Naturally, it had the longer of the two available surrender charge schedules (there's a reason it's called an "Advisor Advantage" annuity). It seemed to me that after six years the surrender charge should be a lower percentage than I calculated based on the numbers on my statement, so I called the customer service line and it turns out the surrender charge continues in force until ten years after the date of the payment, not ten years after the start of the contract. I made payments on the annuity until the end of 2006, which means the surrender charge won't go away completely until the end of 2016. Right now the balance is about $14K and the full surrender charge is around $855. There are three possible courses of action:
Here are the particulars: at the beginning of 2004, I opened a Roth IRA account with Ameriprise and was sold a variable annuity within the account. Naturally, it had the longer of the two available surrender charge schedules (there's a reason it's called an "Advisor Advantage" annuity). It seemed to me that after six years the surrender charge should be a lower percentage than I calculated based on the numbers on my statement, so I called the customer service line and it turns out the surrender charge continues in force until ten years after the date of the payment, not ten years after the start of the contract. I made payments on the annuity until the end of 2006, which means the surrender charge won't go away completely until the end of 2016. Right now the balance is about $14K and the full surrender charge is around $855. There are three possible courses of action:
- I can leave it alone for another 6-1/2 years until the surrender charge goes away, or
- I can retrieve 1/10 of the 12/31/2009 balance now and transfer it to my new Roth IRA with another custodian, pay no surrender charge but possibly incur a transfer fee, (I forgot to ask whether there is one), which will let me get at least some of my money away from those #%*@! now, without having to pay through the nose to do it, and perhaps retrieve the full balance somewhat sooner than 2016 (I think I can take out 10% of the year-end balance every year) or
- I can cash in the annuity, do a trustee to trustee transfer to my Roth at Scottrade, close the Ameritrade account, and be done with it. Doing this would incur the surrender charge, possibly a fee for the transfer, and IIRC a $100 account closing fee...maybe about $1K right off the top.