Would You Recomment FIA To..

[bluemarlin08]

No emergency fund, why tie up the money in an annuity with surrender charges, they might need the funds in the IRA.
Could someone explain an 8% compounded rollup rate?

 

[Rollem]

My thoughts:

We don't know if there is a pension involved!(in a couple years)
No emergency fund!

 

[FIG]

I agree that putting the entire amount is a mistake when it appears she doesn't have any other emergency money. I would suggest converting a portion of the IRA to a Roth since her tax bracket is so low. Spread this tax liability over 2 years. This will allow the rollup amount to grow tax free and past to the heirs like the life insurance she cannot qualify for.

You could use the BPA if it's still available in your state or an Aviva fixed product which has a 7.2% rollup rate.

 

[Newby]

In rereading the original post, I'm kind of taking it like others here who think she has no other money. If that is the case she needs to quit worrying about leaving money to her kids.

 

[FIG]

No emergency fund, why tie up the money in an annuity with surrender charges, they might need the funds in the IRA.
Could someone explain an 8% compounded rollup rate?

Certain annuities (variable, fixed and index) have separate account values which grow based on a pre determined guaranteed rate, some grow simple and others grow on a compounded basis. This account value on 99% of the annuity contracts are used in the future to create a calculated stream of income based off a payout rate (the older the higher percentage payout rate) for life not matter what happens to the account values and with out annuitizing the contract. Therefore at death if the annuity has kept up with the withdraw rate the remanning funds are passed onto the beneficiary.

There are a couple income account values which can grow to not only be used to calculate income but can actually be inherited by the primary beneficiary!! Very cool, but rare.

 

[padthaiforlunch]

Would you recommend a FIA to a 64 yrs old female (turning 65 in 3 months) with some minor health issues? She is retired and receiving 700/month from social sec. She has 20k in IRA and plans to leave it for her children. She has no life insurance and doubt she can get one. Husband is still working and plans to retire in a couple of years. They have no emergency fund. They owe 20k on house. Household income is ~30k.

If yes, what company and product would you recommend?
If no, why not?

Oh yeah, I'm fairly new to annuities..

Good luck on finding a carrier that will take more than $10,000.

 

[VolAgent]

There are a couple income account values which can grow to not only be used to calculate income but can actually be inherited by the primary beneficiary!! Very cool, but rare.

What is the charge for this?

 

[bluemarlin08]

Fig, I assumed that was what it as. I assume you work at FIG, I spoke with one of your reps a few weeks ago regarding one of these products, can't remember the product, I did some comparison using a lump sum in a 3.7 % rate, non annuity, then took that sum in 10 years and got rates for a SPIA, smaller accumulation but higher payout, plus you pay a substantial fee for this income rider that comes out of the real account value really dragging earnings. It would really be great if a wholesaler would put on a webinar and go over the different products, addressing questions we might ask. I had a client I hadn't spoke with in a couple of years invest 3million in these things, what am i missing? Big sales obviously.

 

[aztec]

That's correct. She has no savings except for the IRA.

My concern is that she may need the money for emergency because of her not so perfect health. And that the money, if put in an annuity, will be tied up for years.

I'm now more confused than when I started the thread..

 

[Norwayguy]

That's correct. She has no savings except for the IRA.

My concern is that she may need the money for emergency because of her not so perfect health. And that the money, if put in an annuity, will be tied up for years.

I'm now more confused than when I started the thread..

Don't be, your initial feelings were correct based on the info provided. The only question I would have is what is the funding vehicle of the IRA currently?