Hi all. Thank you in advance for your time and consideration. My father in law (62 yo) is retired, my mother in law (58 yo) works, makes about 75k/yr, but job is not stable. They have the following and was looking for advice with the Variable Annuity, especially as that is the bulk of their assets.
Emergency funds: Three months
Debt: no debt, townhouse paid off. Property taxes, maintenance 10k/yr
Tax Filing Status: Married Joint
Tax Rate: 25% Federal, 6.37% State
State of Residence: NJ
Age: 62 him, 58 her
Current Asset allocation ALL in TAXABLE: $300K split 60% stks/40% bonds*
*account currently at ML/BoA in active managed MFs, not sure which funds*
Desired Asset allocation: 30% stocks / 70% bonds
*I suggested moving account to Vanguard and holding 20% Total Stk Mkt Idx, 10% Total Intl Stk Mkt Idx, 35% Total Bond Idx, 35% Inflation Protected (VIPSX)
Desired International allocation: 33% of stocks
Allianz Variable Annuity $800k, purchased in 1995, held at ML/BoA
As noted, I suggested he transfer his taxable account to Vanguard and allocate as above. The big question is what to do with the VA? Keep where it is or perhaps roll it into an IRA?? ML/BoA rep suggested he exchange the VA into a new annuity. I didnt think that was prudent and would involve a lot of fees especially on a 800k balance. Thanks again for your collective help.