HOW OLD IS YOUR ANNUITY?
May 1, 2018 | View PDF
Look back over the past decade at some of the things you have done or accomplished. You may have gotten married, graduated college, had a baby, started a business, bought or sold a house or retired. Now examine the financial moves that you made regarding those accomplishments. Other than right now, how often have you thought about or reviewed those financial decisions? If your answer is not very often or never, then now is the time to do so. Now, when you talk about looking back over that past ten years of financial decisions, there could be a lot to review. One popular investment that many people make is to invest in a variable annuity. It could be that you changed jobs and your banker or financial advisor advised you to roll your 401k into an annuity. If you are invested in a variable annuity and it has been over five years, consider reviewing it to ensure that it is performing in the way it was designed to perform. I bring up annuities simply because they can be easy to forget about. Usually, money that you invest into a variable annuity, is money that you do not have an immediate need for and therefore you invest it as part of a long term strategy for retirement or estate planning.
Interestingly enough, you might not be the only one who has forgotten about your annuity. The advisor who sold you the annuity could have lost track of the fact that they sold it to you or that advisor could, very well, not be an advisor any more. If the adviso r is no longer with the company or is no longer an advisor, then the annuity company can reassign it or it could fall into an “orphan” status. If it is in an orphan status, it just means that it is not currently assigned to a specific advisor but the company still holds the investment. So it begs the questions, how old is your annuity? Is it five, ten even fifteen years old? Now I know that seems pretty old and that surely no one could go that long without reviewing their annuity, but it does happen. Some of my best clients I have, came to me as orphaned accounts. It can be a fairly common issue in this industry. You get wrapped up in life and it just falls by the wayside. I can’t help but to wonder, of those of you reading this article and that has an annuity, who has the oldest annuity? If you have an old annuity that has not been reviewed, contact your advisor to make sure that your annuity is performing the way it is designed to.
If you don’t have a Financial Advisor, please feel free to call me and I’ll be happy to set up a time to talk with you.
An annuity is intended to be a long-term, tax- deferred retirement vehicle. Earnings are taxable as ordinary income when distributed, and if withdrawn before age 59½, may be subject to a 10% federal tax penalty. If the annuity will fund an IRA or other tax qualified plan, the tax deferral feature offers no additional value. Qualified distributions from a Roth IRA are generally excluded from gross income, but taxes and penalties may apply to nonqualified distributions. Please consult a tax advisor for specific information. There are charges and expenses associated with annuities, such as deferred sales charges for early withdrawals. Variable annuities have additional expenses such as mortality and expense risk, administrative charge, Investment management fees and rider fees. Variable annuities are subject to market fluctuation, investment risk and loss of principal.
Buddy Hicks is a Registered Representative and Investment Advisor Representative of Securian Financial Services Inc, member FINRA / SIPC. Wealth Management Group, LLC is independently owned and operated.
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