Ask Terry Questions Annuities – Was I taken?

Annuities – Was I taken?

By Terry Savage on September 24, 2019 | Wild Card

Hi Terry,
I retired 5/1/2019. Before retirement I met with a different advisor than my current to get another perspective on how to invest my funds to provide monthly payouts and not run out. I paid for this advice, and since they also would gain from me moving my funds to them, I realize now this was a mistake.
Anyway in a nutshell this is what they recommend: my funds: $1.5Million in IRA and 401k and brokerage account.
Advice: $800k in annuities to get 10% payouts over 10 years ($80k annually), $150k keep for future emergency savings account – balance to be placed in markets at 80% stocks, 20% bonds. AND their financial investiment company charges 1.65% fees. Love to get your initial thoughts. I know the commissions are high on annuities — i felt this proposal was so self serving on their end. Allianz is the annuity product.

Terry Says

Yep — the fees on the annuity were designed to ensure the salesman’s retirement — not yours.  And you’re likely stuck with surrender charges.  Better save some of that $80,000 annual payout — because if you’re retiring at age 68, you’re likely to live at least another 10 years after the payout ends!

Second, you don’t want to stick with them in their stocks/bonds account.  The fees are way too high — and that’s on top of the commissions you paid to invest in those stocks!!  Call Fidelity  or Vanguard and begin the process of transferring the investments to a brokerage account with either of them. At least if they advise you to get into low-cost mutual funds, you want be paying sales commissions when you sell those stocks!  Fidelity or Vanguard will advise on a diversified program.  But MY advice is to keep $100,000 in money market funds.  I’m assuming the money is still in an IRA rollover!  Keep it that way.  Let Fidelity or Vanguard handle the rollover transaction so you don’t wind up paying money on taxes!

This still doesn’t all add up, so something is missing here.  Where is the rest of that money??And if you want someone to let you know exactly how much of a ripoff you received when you bought the annuity, go to — Call him (number is on the website) and be prepared with all your annuity info.   If it is truly egregious he may be able to help.




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