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meowkittymeow: "My parents (74 and 70) are confronted with the decision to buy an Immediate Fixed Annuity,"


"The particular money is in an IRA (my father's)."

So why move it to an annuity? What purpose is served?

"and have asked me for advice."

Good. I will defer to the others as to the details.

"The particular annuity in question is with Bankers Life and Casualty Company (yes, the salesman came calling; my parents already have a Long-Term Care policy with Bankers Life). It is called the "Bankers Security Builder Equity+" with a "Strong Guarantee." The annuity he is selling is an Immediate Annuity, with a rate tied to the S&P-500 index. He presented it as paying out at a "Participation Rate" of 85% of the index appreciation. [I note in the actual document that it really has a variable Participation Rate, resetting each year, initially not set until the annuity is funded, and with a minimum guaranteed rate of only 25%. This discrepancy is enough to make me seek some other company, even if my parents want to go ahead with an annuity. I looked at the website of the oft-recommended Vanguard, but can't figure out what is what there. At least, not without doing a lot more reading.] It appears to have no direct fees -- i.e., all their fees must be taken in the form of a lower payout ("Participation Rate")."

You may want to cross post on the Insurance Board.

Regards, JAFO
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