Modern Woodmen Flexible Prem Def Annuity?

[Rose3408]

Can anyone tell me more about the Annuity I have with Modern Woodmen of America - 90FPA - Flexible Premium Deferred Annuity?

When the market was starting to crash in 2009 my financial investor (for lack of a better term) transferred my funds $20k with American Funds into this Annuity when I called him so beside myself because I was losing so much money and knew I needed every cent given I do not have the luxury of a spouses retirement funds, SS, etc. I know, I know, I just should have left the $$$ along in American Funds, but I didn't, and we can't fix what already has bee done.

From what I can read he only received a % at the time the Annuity was opened and told me there are no future fees, commissions, etc. Accordingly to the breakdown sheet, when I turn 68 I will receive $160 for life a month or $182 if I wait to start withdrawing at 70. He also told me should I die before the funds are exhausted, the $$ would go to my beneficiaries (sons).

Surrendering: When I tun 62 (6 yrs) I would have owned the Annuity for 9 years and there would be no surrender charge.

Am I missing anything here in hidden info and fees? To be honest I personally feel given the market, and monies being lost in almost any and all investments, receiving no less than 3% and a check for $160 a month is not all that bad.

Your information and thoughts are greatly appreciated.

 

[Independent]

I don't know anything specific about the Modern Woodman product. This page http://www.modern-woodmen.org/Produ...axProviderFlexiblePremiumDeferredAnnuity.aspx
looks very typical.

Most fixed flexible premium annuities will accumulate your premium at some interest rate. If your contract guarantees 3%, then you will get that without any additional fees/charges except a charge for "early" surrender. If you cash out early, you'll pay a percentage surrender charge that will be listed on one of the first few pages of the contract.

The wording in the contract may say that it automatically converts to monthly payouts at age 68. There should be language about starting that monthly income sooner or later, at your option.

The great majority of people who buy deferred annuities take their money out as a lump sum, not as a monthly income.

If you are interested in a monthly income, cross-shop against Single Premium Immediate Annuities. You can take the lump sum out of the Woodmen policy and use it to buy and SPIA from a competitor.

If you bought the annuity with non-qualified money, then you're deferring taxes on the interest today. You'll pay tax on the gain when you surrender, unless you roll to another annuity.

That's all pretty generic information, can't say much more without seeing the contract.

 

[mickeyd]

Hey Rose,

receiving no less than 3% and a check for $160 a month is not all that bad.

Independent has given you pretty good advice. Sounds like you have already decided what to do IMHO.

It all seems to boil down to you preferring a lump sum @65 or a monthly income in addition to SS. You have already paid most of the fees/commissions that the insurance company will charge, though you may also still be paying a few % per year depending on the contract (CHECK YOUR POLICY).