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It is a very very bad deal.
I would not trust the Financial Planner and I think I would look for a new one unless their are other facts I do not know about.
Annuities are good in the correct situation so the first question is why do you want one. The major problem with an annuity is its cost and then generally no inflation protection. I would go to Vanguard (mutual fund co) and get some quotes on annuities. Can also check other large mutual funds and on line stock brokers.
Vanguard is trying to make shopping for these annuities a bit easier. This month, it introduced an online marketplace called Vanguard Annuity Access, which allows Vanguard customers to compare the costs of annuity contracts from different providers. Price quotes are provided in real time, but what really sets Vanguard’s service apart from its competitors is that it discloses its commissions upfront, something providers aren’t required to do. (Did you read that, Elizabeth Warren?)
Yes, you can use this service to get quotes for immediate annuities as you said. As you said Fidelity another large mutual fund company offers the same service. It is in the link etc etc etc.
thanks, everyone. The consensus seems to agree with our gut feelings on this one. And we are taking your advice!
We also now realize that this Planner actually ADDED numbers incorrectly when computing our anticipated pension numbers to advise us on which survivor benefit option to choose!!! I'm talking adding two 4-digit numbers & coming up with a $1000 p/mo error!!!
We nearly finalized our pension applications on her advice...these choices are IRREVOCABLE!!! We would have been short $12K p/yr if I hadn't double-checked her numbers. And I ain't no accountant! Yikes!!
Needless to say, I'm thinking we aren't even going to pay this Planner the fee they were to charge!!!
Everyone, be careful out there as you plan your futures!
Called the FP to tell them we are not happy w/ the Plan so far & especially the pension error that nearly cost us HUNDREDS monthly in survivor benefits. Planner said it was insulting to imply that offering that annuity was only benefiting them (that we would have rec'd more info before signing on the dotted line) AND while readily admitting the pension computation error was their responsibility, we should have better reviewed their info & then their error would have been revealed & corrected.
Maybe. But we went to them because we DON'T have the advanced expertise (believe me, we can't understand so much of what is discussed in these financial threads). We feel we do need advice. Maybe we jumped the gun in canceling with this firm??? Still skeptical but so confused now
Called the FP to tell them we are not happy w/ the Plan so far & especially the pension error that nearly cost us HUNDREDS monthly in survivor benefits. Planner said it was insulting to imply that offering that annuity was only benefiting them (that we would have rec'd more info before signing on the dotted line) AND while readily admitting the pension computation error was their responsibility, we should have better reviewed their info & then their error would have been revealed & corrected.
Maybe. But we went to them because we DON'T have the advanced expertise (believe me, we can't understand so much of what is discussed in these financial threads). We feel we do need advice. Maybe we jumped the gun in canceling with this firm??? Still skeptical but so confused now
No, you didn't.
Your mistake was going to a financial planner in the first place who benefits from "selling" an investment to you. You need to find a fee-only financial planner. What that means is that he is compensated solely by his clients. You either pay him a set fee for designing a financial plan for you or you pay him by the hour. In either case, such a planner will not be recommending a product that he himself sells or for which he receives a commission.
thanks, everyone. The consensus seems to agree with our gut feelings on this one. And we are taking your advice!
How old are you and your husband - and is this an annuity on one life or two (with this info - it's easy to calculate the return on the annuity assuming you live out your normal life expectancy). I assume this is a regular annuity (monthly payments for life). The 5 year thing simply guarantees that your heirs would get something if you and your husband were to die before the end of 5 years. Robyn
Robyn55.....
We are mid-50s. This was to be a 5 yr supplement to our income (& a supposed safe-haven to stash some cash while avoiding some taxes on interest). But the cash is not earning interest now. So we were 'advised' we'd be earning at least some lower-taxed interest.
But we weren't told that just putting the cash into a 2% svngs account would yield a few dollars MORE monthly than this annuity - which at just $200/yr interest gain hardly-to us-replaces the importance of having access to our $40k in the next 5 yrs.
MadMan....
FEE ONLY PLANNERS???? In searching, it seems they are still licensed in insurance, etc...so don't they still try suggest specific products??
You would get Nothing back at the end of the 5 years. The Ins Company can pay you a little more then the intrest you would get on your own, cause some % of the IA holder will die before the 5 yrs are up, and they dont have to pay them.
Suize Orman did a segment on her show last night ... check it out
Home Page - NAPFA - The National Association of Personal Financial Advisors = You want to find a FEE only. You may need to call/check few to find the right match. You should get the 1st meeting free, so you get a idea if you want to retain the person/firm. what they can offer, what there fee's are etc. Just remember you hiring them, treat the meeting as a interview where they are getting hired by you.....
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And an update.....
I'm talking adding two 4-digit numbers & coming up with a $1000 p/mo error!!!
Am I crazy?
