Here's the situation: My mom hasn't wanted to learn anything about investing, so she's been having a financial advisor my brother-in-law introduced her to manage a large portion of her savings. He's lost more money for her than earned it, and at this point she's lost faith in him but doesn't know too much about what he's got her invested in or what her options are. She's a federal employee and will receive a pension that's 70% of her salary per year, so she's more concerned about holding value. Right now her financial advisor has about $200K of my mom's savings in a Metlife vaiable annuity (100% in PIMCO Inflation Protect Bond). She's over 60, so the 10% penalty wouldn't apply if she sold. I don't know much about annuities, since growth is what I focus on right now with my investments. Other than transferring this to a fixed annuity, does she have any good options if she doesn't want to pay taxes right now? If she's lost faith in her advisor, is there a way she can transfer this (the way you can rollover your IRA when you leave an employer) or would she have to sell, pay capital gains taxes, and reinvest?
An annuity can be transferred to an annuity with a different company. Depending on how long she's had the Metlife annuity,i there may or may not be redemption fee. Vanguard or Fidelity would be good choices. Or she could switch the Metlife annuity to investing in a different fund. If she transfers the annuity to Vanguard or Fidelity, there should be no commissions nor capital gains taxes as long as the transfer is done directly. She can talk to Vanguard or Fidelity, send them a copy of her most recent statement from Metlife, fill out some paperwork which they will supply. She does not need to discuss what she is doing with the "financial advisor" at all. It is just like switching brokers or rolling over a 401k. Best wishes, Chris
She does not need to discuss what she is doing with the "financial advisor" at all.In fact, given what we've been told, it would probably be better to just stay away from the "financial advisor" as it's almost a sure bet he'll try to switch her into something else, which just happens to have a heavy up-front load.Hedge
She's over 60, so the 10% penalty wouldn't apply if she sold. I don't know much about annuities, since growth is what I focus on right now with my investments.One thing to consider, family history of longevity. My mom is 65 and given the family history, has to plan on about 30 years of retirement living. So growth is part of her IRAs even though she has a teacher's retirement that covers all her necessities plus a little left over.JLC
Is your mom a teacher? If so, she's eligible for TIAA-CREF, which is one of the best annuity providers out there if not THE best.When you talk to Vanguard, TIAA, or whoever about the annuity, tell them you want to do a "1035 exchange". This is the specific tax form that must be filed to transfer an annuity between providers without incurring any taxes.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |