The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing


Subject:  variable annuity question Date:  1/8/2004  7:59 PM
Author:  snafflekid Number:  38425 of 104258

I didn't know where to ask this but I figured this board would know the most about variable annuities.

My sister's husband died last year and his insurance left her $125,000. She took the guidance of a local banker and bought a variable annuity from him for $50,000. She does not work and has a 6 year old son. She has no retirement vehicles She recently went back to college to finish her bachelor's degree and is living off the insurance.

I'm thinking a Roth IRA would have better served her but she does have a big chunk of money to deal with. I looked at the annuity (New York Life) 50% invested in a fixed account earning 3%, 45% in a junk bond fund and 5% in an international stock fund. Yikes right away I hated it but she is worried about loosing money. I've already made recommendations on rebalancing but it's her money.

This fixed account which I don't remember the exact name only allows 20% to be transferred to investment funds per year! AND the total fund management fees average around 2.1% each making it expensive. So was this the best choice considering her circumstances?

Copyright 1996-2021 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us