Help with IRA invested in Flexible Premium Deferred Annuity

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Topic Author
monicafaye
Posts: 30
Joined: Thu Mar 18, 2010 8:39 am
Location: San Antonio, TX

Help with IRA invested in Flexible Premium Deferred Annuity

Post by monicafaye »

I have just turned 59 ½ and have an IRA that is invested in a flexible premium deferred annuity which I knew nothing about when I was sold the product. I tried to transfer it to Vanguard but the policy is non-transferable. I am considering beginning withdrawals now, instead of waiting until 70 ½, and reinvesting the money in a taxable account using Vanguard Index Mutual funds. The money would be invested for the future benefit of my 24 year old son with special needs. The company that holds the IRA has given me a single premium immediate annuity quote. The option I am considering is Number of Years and Joint Life with guaranteed return of premium. I would designate my son as joint annuitant with 100% survivor benefits. I would receive a monthly payment until my death. Thereafter the same monthly amount would continue to be paid to my son until his death. I want to choose the option that will benefit my son the most. I would really appreciate your opinions.
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BL
Posts: 9874
Joined: Sun Mar 01, 2009 1:28 pm

Re: Help with IRA invested in Flexible Premium Deferred Annu

Post by BL »

I suggest you contact the Vanguard annuity people to see what options they suggest. Perhaps you can cash it in and keep it within an IRA to invest rather than in any annuity. Also check immediateannuities.com to see what the cost of something similar would be. You are a bit young to be buying a SPIA yet and would definitely try to learn your options.

After being sold that annuity, I personally wouldn't want to give them any more of my business.

Try to get an "in-force illustration" from the annuity company so you can evaluate it and the costs to keep or get rid of it.
Topic Author
monicafaye
Posts: 30
Joined: Thu Mar 18, 2010 8:39 am
Location: San Antonio, TX

Re: Help with IRA invested in Flexible Premium Deferred Annu

Post by monicafaye »

BL wrote:I suggest you contact the Vanguard annuity people to see what options they suggest. Perhaps you can cash it in and keep it within an IRA to invest rather than in any annuity. Also check immediateannuities.com to see what the cost of something similar would be. You are a bit young to be buying a SPIA yet and would definitely try to learn your options.

After being sold that annuity, I personally wouldn't want to give them any more of my business.

Try to get an "in-force illustration" from the annuity company so you can evaluate it and the costs to keep or get rid of it.

I have been told the IRA is non-transferable and non-surrendable. Plus they refuse to pay me the lump sum value. The shortest period pay-out they offer is 15 years with a total guaranteed income of less than the full value of my IRA. I really don't want to have any further dealings with the company but it looks like I have limited choices. Talking to the Vanguard annuity department for guidance is a great suggestion I hadn't thought about. Thank you.
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BL
Posts: 9874
Joined: Sun Mar 01, 2009 1:28 pm

Re: Help with IRA invested in Flexible Premium Deferred Annu

Post by BL »

As I understand it, the company is required by law to give you the illustration. I would not deal with the broker to get it. So sorry you were sold such a piece of junk!
You just want to get the best you can out of it, but I have no knowledge to help you there. Hopefully someone here with some experience can come up with better suggestions.
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