My brother a stock broker for 30 yrs just put my 90 yr old dad in a $800 k 5 yr annuity with Symetra . It was paying 5.2%. The reason my dad did is to leave $200 k to each grandkid on death . My brother said there very safe company. My dad didn’t want to do cd’s as he’d have to pay taxes yearly and he’s in the highest 37% tax bracket . Are they safe ?
How safe is Symetra ?
- Thread starter DonP
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They've been around for a long time and are A rated. They also have a NY domiciled company (first Symetra) which is great (NY is very tough on admitted insurers).
We do a decent amount of business with them. Your brother was limited with carrier options due dad's age. Only North American, Securian, Nationwide and a few others will have better ratings and still issue to a 90 yo.
I wouldn't have a problem with an advisor putting some of my parents' money with them.
- Thread starter
- #3
Yes he said few CO’s would do . He writes a lot with them . He said if they go belly up he’ll make good on it .
I would have put the 800K at that age with multiple carriers in case one insurance company goes under. While state guaranty funds will pay up to limit, they are not like FDIC and issue a check in 48 hours. If the estate needs liquidity at death and one insurance company fails it could cause a headache. 3 Companies would have been better in this case.
- 4,908
After watching the Colorado Bankers stuff, would split it between 2-3 carriers. Did something similar with my father's brokerage account cash recently with a couple different myga carrier's
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- #6
Believe me I shouted at him they weren’t insured and he laughed bragging how strong they were . He’s been a broker 30 yrs . He’s stacked with money and said if they go belly up he’d make it whole . Them again people have 10’s of millions in spic insured brokerage accounts . It’s not insured by govt .There owned by Sumitomio life who’s a massive big company
- 4,908
At his tax rate, you would think tax free bonds & corporate bonds or Drips would get him to same rate as a NQ annuity. NQ annuity is just deferring the tax for you guys to pay at your ordinary tax rates. Capital assets would get a step up in cost basis at death
NQ may work better. Its likely each grandchild will pay very little in taxes so the tax deferal first and pay at lower tax rate strategy works. Muni is more risky actually, it can be called before death and if the child needs the funds, it is not always liquid at the time of death. Also the coupon payments have to somehow get reinvsted.
- 4,908
Great points. I forgot the OP that these were for Grandkids too.
Plus, grandkids can spread tax out over 5 year deferral or by electing payout annuity at death.
Very real chance though that dad lives to maturity at age 99 or 100 & all of that deferred interest will be taxable to dad in a lump sum at maturity. Seeing this happen more & more today as some hit age 100. For most tax payers at those ages, they are in low or 0% tax bracket & should be taking some taxable gains out each year to spread it out & utilize their standard deductions & lower tax rates than leaving it for taxation at death or maturity
You can still stretch non-qual annuities too.
