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Originally Posted by clifp
Moving somewhat back to the original topic.
Who typical insures Amerprise's annuities?
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The company behind them is Riversource........
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It seems to me that a variable annuity the man protection is the underlying value of the sub-accounts? is that true and if so are VA safer?
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The account value of the sub-accounts is the real value, because that's what you would get if you wanted the lump sum, NOT the "income base" or "living benefit" base.......
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Finally, Bill has another annuity with Amerprise I believe is worth roughly $150K it is almost 4 year old and the surrender charges are about 7K. I'm not going to press him to do anything but when he comes out to visit me at the summer, I may start nudging him to do something else.
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He will be out the $7K if he moves it. I guess it might depend on him if he feels like he wants to "take the hit" and move it. If he has made money in this contract, and he's more than $7,000 ahead, maybe. What I can tell you is that if I told him to take a hit on it, even if I didn't put him in another investment, I would be in deep doo-doo with my Compliance department.........sounds crazy, but it's true..............
I guess I would be cautious on that.........
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In general, should you wait to move until the surrender fees go away? Also if you make an exchange from one annuity to another to you still have to pay the surrender fees?
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If it was me, even if the annuity wasn't all that great, I would wait. You have to make up 4.5% just to get back, that may take time. However, if he agrees that he's ok with it, then maybe it would be ok. And YES, you have to pay surrenders on 1035 exchanges..........
One thing I DEFINITELY would do is to have him call the annuity company and ask how much of a surrender-FREE amount he has. Most annuities have an amount that gets bigger every year that you can take out without a penalty. Maybe in his case, he could take out $60K penalty-free. You could help him set up an account at VG and transfer that amount IRA to IRA. That should work pretty easily. Then every year, one day after the contract anniversary date, move the next piece. That way, he doesn't take a surrender, and you are helping him move over time to VG.............