Advising Mom and Dad
My parents are both in their 80's. Dad's health is failing and Mom is hanging in there. They own their home, lbtm, and have long term healthcare.
About 7 years ago, they purchase a fixed and variable annuity. The fixed is coming due and the VA has two years left. The fixed annuity is paying just above 3%. There is about $10,000 in this account.
The VA has $90,000 -- I believe they can get a better return without paying the expense and insurance costs. There are 2 years left. If they move the money now, they incur a back-end fee of ~$5500.
They met with a financial planner who I trust and he has recommended moving the fixed annuity into CDs, paying 5 1/2%. What to do with the VA is more troublesome, especially with a exit fees. Even with this back-end fee, he is suggesting a balanced MF and CD with a target of 8%.
I believe my parents should be able to move some of the money out of the VA cost-free based on the age of the VA; 5 years . I think you transfer the funds you can move cost-free to the balanced MF/CD and leave the rest in the VA. In 2 years when the VA comes due, then move the remaining into the MF/CD account.
Any suggestions greatly appreciated.