Ameriprise annuity draw down/surrender?

[calmloki]

Sis has all with Ameriprise - hasn't wanted anything to do with management of the money. Hasn't drawn down funds there as far as I know. I've suggested shifting to Fidelity, because I've been impressed with their telephone support and experience buying and selling.
There is one "proprietary" position that has annuitant mentioned, that her advisor told her could not be moved. Makes me think it is an annuity. It has ~$36k, don't know how long she's had it, and has an annual benefit of $2600, with another column claiming $2300. I know many annuities have hefty surrender charges, so am wondering if she should just draw down the annuity over the next 15 years (is that how an annuity works?). Can one start drawdown whenever? She is 70+ and the couple grand wouldn't really be life changing, but I'd like her to maximize value.
Going to give her a hand in the process within my limited knowledge, would appreciate any help boosting that knowledge off the floor!

 

[Koolau]

^^^^^^^^^^^^

Basically, that's how some of these annuities w*rk. Withdrawal limits over a certain number of years.

Thankfully, it's been a while since I had an annuity with limits on withdrawals. I think my "period" was 10 years. IIRC there were limits on how much could be withdrawn without penalty and even a period of maybe a year or two when no withdrawals could be made without penalty. After withdrawals were allowed, it was so much per year (or maybe it was %.) In any case, it was very restrictive to avoid penalty. I'd suggest taking the max each year to get as much out as possible.

At age 70+, an annuity would seem to be borderline inappropriate on the part of the sales people - especially with a 15 year period!

 

[OldShooter]

Too many unknowns. Get the document and, if necessary, get CPA or legal help understanding it. Strong odds are that the advisor doesn't understand the product and is getting paid a little bit of commission every year, so has no motivation to help.

If the advisor won't get you the document, ask for the name of his/her Compliance Officer and pursue that avenue. Also take the time to understand this stuff: File a Complaint

 

[Trooper]

Too many unknowns.

Try to find out:
- Does the annuity have a surrender period? If so, and if Sis is past that, she should be able to either start withdrawing on it, or possibly move it somewhere.
- The type and of annuity: Immediate/Fixed/Variable, and whether it was funded with pre-tax or post tax dollars i.e. qualified or non-qualified. This will determine tax impact of future decisions with the money.
- Annual fee structure
- How the money is invested ("subaccounts" in annuity lingo)
- Cost basis, if the annuity is qualified.

 

[aja8888]

Agree with Old Shooter...get the document. I helped my sister-in-law go thru this and you definitely need to see the terms of the annuity.

 

[Koolau]

Under the right circumstances (like changed economic climate, significantly changed interest rates, poor performance of the annuity, etc.) it can be advantageous to take the penalty hit to get out of an annuity. You have to sharpen the pencil for this, but I suggest not dismissing it out of hand just because there is a penalty. It just might be a good move - depending. Best luck.

 

[Al18]

Your sister should contact her Ameriprise agent and say she’s thinking about annuitizing now and want to know what the payment amount and terms are, in writing.