My 40 Yr old daughter said she was investing in her IRA. She has been investing in this annuity instead.

I learned today that my daughter's ex-husband's family accountant put them into this awful annuity. It's more than a little irritating to think he made more money on it in commissions than she will ever make on it. :mad:

How awful!
 
I learned today that my daughter's ex-husband's family accountant put them into this awful annuity. It's more than a little irritating to think he made more money on it in commissions than she will ever make on it. :mad:
I can understand the irritation but I believe it’s likely that new annuity sales people truly think they are “serving the client”.
 
I have a Flexible Premium Deferred Annuity. I opened it when I was 18 (circa 1994), when my parents sent me to their friend (an insurance agent) to get me started with retirement savings. It's inside a traditional IRA, so I was able to deduct contributions from my taxes while I was making them. It's always been hard to get straight answers about what exactly this product is.

I stopped contributing to the annuity once I figured out there were better options. But I left my contributions there, and it's worth about $100k now, gaining a paltry 3% per year for the last 20 years. I don't see it as an awful part of my retirement portfolio--it introduced me to monthly tax advantage savings when I was young. Now it makes up a small--but not insignificant--portion of my assets. I wouldn't recommend this investment to anyone, but at the same time I'm not angry that I have one. My parents simply weren't savvy enough to know better.
 
It is sometimes hard to deal with this when it is your kid...

My DD's boyfriend was talking about his investing and I asked about it... he said he has a FA... :confused:

WHAT... really.... and how much does this guy cost you?

Nothing!!

I tried to explain to him that his FA IS costing him money but he did not seem to understand... I dropped it... BTW, he graduated 4th in his HS class with over 1,000 students so he is not dumb... I might bring it up later in life when they get married and he is working...
 
I have a Flexible Premium Deferred Annuity. I opened it when I was 18 (circa 1994), when my parents sent me to their friend (an insurance agent) to get me started with retirement savings. It's inside a traditional IRA, so I was able to deduct contributions from my taxes while I was making them. It's always been hard to get straight answers about what exactly this product is.

I stopped contributing to the annuity once I figured out there were better options. But I left my contributions there, and it's worth about $100k now, gaining a paltry 3% per year for the last 20 years. I don't see it as an awful part of my retirement portfolio--it introduced me to monthly tax advantage savings when I was young. Now it makes up a small--but not insignificant--portion of my assets. I wouldn't recommend this investment to anyone, but at the same time I'm not angry that I have one. My parents simply weren't savvy enough to know better.
For some folks, I suppose, it would be in lieu of spending the money on week-end parties. In that regard, even a less than perfect investment comes out looking pretty good.

I think of any "forced savings" as a good thing within limits. I sure didn't know what I was doing when I started my 401(k) and I didn't invest well, but the savings really did add up over time. On that basis, flawed investment is better than none at all. YMMV
 
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