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my suggestion prestwich is to have someone who understands these annuity contracts review yours and tell you what your real return is.
Wow, thanks very much for the heads up on this. Would the CPA who does my income taxes be an appropriate person to look into this for me, or some other professional? An attorney? A CFP?
OK, I appreciate all the feedback. Here is the update. My BIL is a CFP, and agreed to review my contract to see if there is anything funny in there. However, since this was started 21 years ago (was thinking 30, but looked it up,) I don't have the contract anymore, so I will have to pay $25 for them to send me copy.
Good news so far is that the company (National Western Life Insurance) representative I talked to on the phone assured me that there are no back-end fees on this annuity. I know for sure, by looking at the numbers on my statements, that they aren't taking any maintenance fees. Phone rep said that when I retire, I will have the option of choosing a payout term of anywhere between 5 and 30 years, or a "lifetime" payout based on my life expectancy at that time, with no fees at all taken out.
When I started this policy in 1991, a passbook savings account was paying 5%, and typical 30-year mortgages were at 9%, according to my googling today. So 6% back then was not a lot. I asked the guy on the phone how they could afford to pay an honest, unadulterated 6% today, without conning me out of fees, and he assured me that my assumption was correct: we have a legal agreement.
Nevertheless, I will get a copy of the contract and have it reviewed, and post the results. Meanwhile, I won't try the "accidentally on purpose" technique of trying to put one over on the IRS, upon which the thread was started.
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