Question:

Variable annuity went down. We lost SOME MONEY, will it go back up or should I take my money out?

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I'm working with a financial planner and I just don't get what's going on, so I wanna know if I need to take my money out or if my money will go back up if and when the economy gets better??

thanks all help greatly appreciated!!!

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5 ANSWERS


  1. Everyone gave you good advice about what to do with your annuity.  However, your second question was about what else is out there for risk-adverse investors.  Actually, a lot.

    Banks offer CDs and stuff like that ... you probably know that.  Soooo ... what else?

    Go to your local library and check out a book called "The 25% Cash Machine" by Brian Perry.  This guy educates you on investments that regularly return 10% ... without much risk.

    Learn about investing at Morningstar.com.  Look for the "classroom" tab at the top of the screen.  They explain terms and have ideas.

    Any investment has a risk.  Your annuity should go back up ... don't worry about it.  Everyone has taken a beating during this downturn.  It is just part of the process ... sigh.

    I wish you luck!

    Uppity Wench


  2. I wouldn't take it out, you would be charged a huge penalty fee.  Just wait until the market rebounds later this year, you should break even.  The major indexes just surpassed a big resistence level which is a very bullish sign.  If you redeem your money now you could pay 15% in fees, which would really hurt your portfolio.  Variable annuities usually track the market, but never beat it.  I rarely recommend them to my clients because theres more lucrative investments types out there.  Annuities are not for most people, I hope you weren't talked into buying one that you didn't need.

  3. Everyone seems to be "Dumping" on annuities and advisors,  but ithey also have some grat guarantees today.f you're looking for a great guaranteed income stream with a no loss provision of principle and the possibility of gain don't listen to these 'experts' and find yourself a good referred advisor and ask about these new types of annuities. Yes, they increased fees but they also offer some great guarantees.

  4. First respondent's assessment was correct.  The last thing you want to do is take money out of the market right now.  Add to that the surrender charge for early withdrawal and you are looking at a painful situation.

    Remember that you didn't lose your money until that you have sold it.

    Ask your planner why that he put you in the annuity instead of another income investment.  Ask him if there was a commission on this product.  Ask him if he is also charging you an assets under management fee.

    The odds are that he made the industry average of 4-7% commission on your annuity.  So if you purchased a 100000 annuity from him, he just got a check for 5 thousand or so.

    That's the bad news.  Here's the good news.  You can find the prospectus and dig up the exact date when that you can pull your coin without penalty.

    You can then go to the library and read a couple of books so that you can educate yourself and not fall prey to another "adviser".

    I would recommend the Investing for Dummies and Stock Market for Dummies books (they are full of great info.)

    p.s. You should know that Annuities are underwritten by insurance companies, and if the company goes under there is a good chance that you are out of luck with your investment.

    Good Luck to You!

  5. I'd stay in... the market has been going down... so your annuities are doing the same.

    The only mistake you made was having a commission hungry adviser. Annuities are sold as a tax deferral with great growth opportunities. The hidden fees (very high hidden fees) negate any so called tax advantage. With a regular mutual fund after 1 year or more... you're maximum tax rate is the capital gains rate (a good thing). With an annuity your maximum rate is your "earnings rate"....... usually a bad thing.

    My general advise to people using financial planners... run from the adviser if they mention the word "annuity".

    There are many consumer groups looking to restrict or make better disclosure forms for annuities. The insurance industry is fighting that.

    Some people are sold annuities within an IRA or retirement plan. Many industry experts are looking to  make this illegal. There is no benefit of putting a tax differed product into an IRA (especially with their very high fees)................

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