Annuity for a 33 Year Old?

[shepnerd]

I was talking to my best friend today and he's got some real money (multiple six figures) in CD's. He's got several, and one of them is even a 10 yr.

I know the basics of annuities, but have never sold one. He's good with his dough and has some in the market, but is mostly ultra conservative. With him not needing the money anytime soon and wanting to be super conservative, are there some good options in an annuity for him? Is there any product designed for that age bracket?

I'm way more concerned with giving him good advice than making any commission, the conversation just had me thinking he could be better off with an FIA or something over an F'n 10 year CD.

 

[MAnnuity]

I've got a couple of solutions that may work for him depending on what his ultimate goal is for this money, PM me your contact info and I'll be happy to help. Thanks.

 

[nathan.lee]

Shepnerd,

Assuming you recommend an FIA, I would look at a short term product with good caps considering the low interest rate environment that we are in. Something like a 5 yr. or 7 yr. product would mostly likely be a good solution.

Once again, this is assuming your client wants principle protection, is comfortable with the relatively illiquid nature of annuities, and is happy with a potential return between 2% and 4%.

 

[sman]

I'm not sure why anyone would recommend an annuity for a 33 year old. One thing nobody has mentioned is the fact that he would have a 10% penalty for ANY withdrawals until he is age 59 1/2. So unless he can live without the money which would be in an annuity for over 26 years, it's not a good solution.

 

[Franz Kafka]

At what age then should someone buy an annuity (so I can take a note)?

 

[Norwayguy]

I'm not sure why anyone would recommend an annuity for a 33 year old. One thing nobody has mentioned is the fact that he would have a 10% penalty for ANY withdrawals until he is age 59 1/2. So unless he can live without the money which would be in an annuity for over 26 years, it's not a good solution.

And you win the golden suitability award.

 

[sman]

At what age then should someone buy an annuity (so I can take a note)?

Whatever age is suitable for the individual Frank. But it probably isn't suitable for most 33 year old people. Just my opinion, but you're more than welcome to sell them to as many 33 year old people as you want.

 

[iceco1d]

If it's qualified money, I wouldn't hesitate to use an annuity if he's a conservative person. That money already can't be accessed till 59.5 (easily).

I'd probably have a hard time using one for a 33 y/o with NQ funds.

 

[VolAgent]

I thought suitability was supposed to be determined on a per case basis, not as a blanket rule?

 

[sman]

I thought suitability was supposed to be determined on a per case basis, not as a blanket rule?

That's why I said:

So unless he can live without the money which would be in an annuity for over 26 years, it's not a good solution.

This is all under the assumption this is NQ money.