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08-27-2013, 11:01 AM
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#1
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Dryer sheet wannabe
Join Date: Feb 2006
Posts: 11
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fidelity annuity
hello all,
I just visited my fido advise/rep for a yearly chat, I asked for ideas/direction on what to do with some cash I have from selling off some mid to long term bond funds recently, he advised to put it in a a 5 year CD at a return of 2.35%. That sounded OK so I asked a few more questions about the "CD". we then discussed a few more asset allocations issues and then he asked if I wanted to do the paperwork for the CD, I told him I would just do it on line and his reply was that I needed to sign papers at the office. then he stated it a was an annuity. that raised a red flag for me and I requested the paperwork and left. it's for a fixed deferred annuity. it would be over 25% of my IRA, the rest of my IRA is a 60/40 stock/bonds mix at this time.
Should I be leery of this sales pitch? It just doesn't seem right for me.
Dawgster.
__________________
mush mush!!
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08-27-2013, 11:06 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Quote:
Originally Posted by dawgster
hello all,
I just visited my fido advise/rep for a yearly chat, I asked for ideas/direction on what to do with some cash I have from selling off some mid to long term bond funds recently, he advised to put it in a a 5 year CD at a return of 2.35%. That sounded OK so I asked a few more questions about the "CD". we then discussed a few more asset allocations issues and then he asked if I wanted to do the paperwork for the CD, I told him I would just do it on line and his reply was that I needed to sign papers at the office. then he stated it a was an annuity. that raised a red flag for me and I requested the paperwork and left. it's for a fixed deferred annuity. it would be over 25% of my IRA, the rest of my IRA is a 60/40 stock/bonds mix at this time.
Should I be leery of this sales pitch? It just doesn't seem right for me.
Dawgster.
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If he said the words "CD", and it is a 5-year annuity, he's a crook.
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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08-27-2013, 12:26 PM
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#3
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gone traveling
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
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Seems kind of strange.
While FIDO has both CD's and annuities (various kinds), I never had to sign papers at the office - an hour's drive for me.
All transactions requiring signatures (including our joint SPIA) was handled overnight via Fedex.
I wonder if something was lost in the conversation...
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08-27-2013, 12:29 PM
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#4
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Dryer sheet wannabe
Join Date: Feb 2006
Posts: 11
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fido
he did offer to email the papers after I resisted signing on the spot.
__________________
mush mush!!
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08-27-2013, 04:32 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,411
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Never have an annuity as an IRA. Belt and suspenders.
__________________
Part-Owner of Texas
Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx
In dire need of: faster horses, younger woman, older whiskey, more money.
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08-27-2013, 05:05 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2007
Posts: 10,322
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I'd get a different adviser. It seems very wrong to me that he passed off an annuity as a CD. He should've also explained why he thinks it's appropriate in an IRA, because it seems doubtful it would be (but I've haven't looked into this too thoroughly). At best case there was a communication issue between you and him.
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08-28-2013, 06:41 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,197
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Talk to his supervisor, what he is doing is unethical.
__________________
"The only function of economic forecasting is to make astrology look respectable.” Ezra Solomon
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08-28-2013, 06:56 AM
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#8
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Location: North Scottsdale
Posts: 1,437
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Quote:
Originally Posted by mickeyd
Never have an annuity as an IRA. Belt and suspenders.
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+1. Why would you ever put an annuity in an IRA?
__________________
FIRE'D in July 2009 at 51...Never look back!
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08-28-2013, 07:04 AM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: No Country for Old Men
Posts: 47,480
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Quote:
Originally Posted by RockyMtn
+1. Why would you ever put an annuity in an IRA?
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To help the annuity salesman make his boat payments...
__________________
Numbers is hard
Retired in 2005 at age 58, no pension
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08-28-2013, 08:56 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 28,178
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I would dump him. One, he misrepresented a deferred annuity as a CD. Second, he recommended putting an annuity in an IRA, which is already tax deferred. I could never trust him again and would just move on.
At a minimum, report it to his supervisor and ask to be assigned a different adviser and be skeptical of anything they recommend.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56...target 65/35/0 AA TBD
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08-28-2013, 09:03 AM
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#11
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Recycles dryer sheets
Join Date: May 2010
Posts: 436
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Maybe you show up with the "60 Minutes" crew. I would like to see the back pedal.
Bob
__________________
You've got to ask yourself one question: Do I feel lucky? Well, do ya, punk?
Retired July '11 investments 60/40 in very low cost index and mutual funds, balance once a year at best.
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Are Fixed Term Annuities Ever a Good Idea?
08-28-2013, 09:07 AM
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#12
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Full time employment: Posting here.
Join Date: Apr 2006
Posts: 954
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Are Fixed Term Annuities Ever a Good Idea?
It sounds like the adviser sales guy may be trying to pass off a fixed term annuity as a CD; if so, I definitely agree that is unethical and he should be reported.
However, I have wondered myself if a fixed term annuity might make some sense for a piece of my fixed income portfolio. Granted, no real opportunity for capital appreciation; but, very little risk of absolute losses either. (Yes, I realize I would still be taking on inflation risk and some risk of insurance company solvency; but, these seem minimal to me in the short term.)
I have not taken the plunge on these products myself mostly because I have not done enough research to resolve my doubts about any investment product sold by insurance companies. But, I am wondering if others here can give good reasons for me to either run away from these products without looking back or to not think I am completely crazy for considering them.
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If there's one thing in my life that's missing; It's the time I spend alone
Sailing on the cool and bright clear waters; There's lots of those friendly people
Showin me ways to go; And I never want to lose your inspiration
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08-28-2013, 10:45 AM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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Quote:
Originally Posted by CoolChange
However, I have wondered myself if a fixed term annuity might make some sense for a piece of my fixed income portfolio. Granted, no real opportunity for capital appreciation; but, very little risk of absolute losses either. (Yes, I realize I would still be taking on inflation risk and some risk of insurance company solvency; but, these seem minimal to me in the short term.)
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You judge that the risks enumerated above are minimal.
What are the rewards that make these risks, whatever they are, worth assuming?
One of my major objections to even considering product is that unless I planned to invest a lot, the knowledge curve would be daunting. If I were an insurance agent, in the state there this product is offered, maybe I might know what tricks the company and it's salesperson have up their sleeves. But already I know I would not invest a lot, since if there might be any extra yield it is not going to matter much.
So, from my POV messing with things like this could only sidetrack me from what I know works. Keep my reserves safe, risk money or do investigative work only where it can really matter. Most pitches are not fat ones; most are pretty hard to hit.
Over the years we have had plenty stories of how investors can get snookered by investment products; and of course there are plenty examples beyond this board. We have rarely had investors report that they got taken using plain vanilla funds and safe fixed and CDs. Neither our time, nor our experience, not our brains are unlimited.
Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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08-28-2013, 11:06 AM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 16,294
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Quote:
Originally Posted by frayne
Talk to his supervisor, what he is doing is unethical.
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Quote:
Originally Posted by CoolChange
It sounds like the adviser sales guy may be trying to pass off a fixed term annuity as a CD; if so, I definitely agree that is unethical and he should be reported.
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+2. That's the kind of advisor that gives honest advisors a bad name...and I doubt Fidelity encourages that kind of very bad advice.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 40% equity funds / 35% bond funds / 25% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
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08-28-2013, 11:32 AM
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#15
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gone traveling
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
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Quote:
Originally Posted by CoolChange
I have not taken the plunge on these products myself mostly because I have not done enough research to resolve my doubts about any investment product sold by insurance companies. But, I am wondering if others here can give good reasons for me to either run away from these products without looking back or to not think I am completely crazy for considering them.
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As one (along with DW) that successfully used an SPIA to fund our retirement while delaying SS (DW at 66 - with me claiming 50% of her benefit and me actually claiming mine at age 70), it meets our needs.
I'm not going to argue the point of an (SPIA) annuity, especially at the age we executed it (59). However, here's a recent article that discusses the plan we actually executed on our own:
Mind the Gap If You Delay Social Security-Kiplinger
The difference is that our SPIA is a dual-life annuity, with a guaranteed payment period (28 years) rather than a shorter term annuity - as referenced in the article. While the annuity selected is different, they both act as "gap insurance" to cover the period of no SS, or even aide in the plan of delaying SS beyond FRA/age 70.
FWIW...
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08-28-2013, 12:35 PM
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#16
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Moderator Emeritus
Join Date: Sep 2007
Posts: 17,742
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Quote:
Originally Posted by Midpack
+2. That's the kind of advisor that gives honest advisors a bad name...and I doubt Fidelity encourages that kind of very bad advice.
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Ask about a CD, get offered an annuity without being advised of it. Wow. Good thing OP got the paperwork to look over. I would call the boss and discuss a new advisor (and look closely at all the other holdings the current advisor set up). Nothing for or against annuities here, but definitely wonder what the advisor is up to.
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
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08-28-2013, 12:38 PM
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#17
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Moderator Emeritus
Join Date: Sep 2007
Posts: 17,742
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Quote:
Originally Posted by rescueme
As one (along with DW) that successfully used an SPIA to fund our retirement while delaying SS (DW at 66 - with me claiming 50% of her benefit and me actually claiming mine at age 70), it meets our needs.
I'm not going to argue the point of an (SPIA) annuity, especially at the age we executed it (59). However, here's a recent article that discusses the plan we actually executed on our own:
Mind the Gap If You Delay Social Security-Kiplinger
The difference is that our SPIA is a dual-life annuity, with a guaranteed payment period (28 years) rather than a shorter term annuity - as referenced in the article. While the annuity selected is different, they both act as "gap insurance" to cover the period of no SS, or even aide in the plan of delaying SS beyond FRA/age 70.
FWIW...
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What if you wanted an SPIA and the advisor tried to get you to buy CDs without your knowledge? Wouldn't you be as upset as the OP?
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
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08-28-2013, 01:21 PM
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#18
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gone traveling
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
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Quote:
Originally Posted by Bestwifeever
What if you wanted an SPIA and the advisor tried to get you to buy CDs without your knowledge? Wouldn't you be as upset as the OP?
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Please see the question the OP was posing (re-quoted) that I answered. It has nothing to do with "being upset"
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08-28-2013, 01:29 PM
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#19
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Moderator Emeritus
Join Date: Sep 2007
Posts: 17,742
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It is very helpful understanding the post that you have now (after your original post which I quoted) edited to include the post to which you were referring. Not understanding the  given your original unedited post. Oh well, glad you are happy with your SPIA.
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
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