Posted by Matt M on November 04, 2003 at 22:40:30:
In Reply to: variable annuities posted by melgiljua on October 19, 2003 at 11:23:33:
:
: Are variable annuities a smart investment for an 80-year-old? What things should she or her heirs be aware of to ask before investing?
I agree generally a bad idea . I probably wouldn't do business with that agent unless he could prove to you that his reason for offering that was in your parents best interest .
There are all kinds of annuities and they vary greatly from company to company . A fixed or cd style annuity is generally more suitable for the senior set . They offer a better rate than the bank , are more liquid than bonds , and have legal advantages in certain situations .
This is probably what you want
1. An annuity that is fixed or cd style
A fixed will have a rate locked in for
usually one year then the rate will be
set by the company . There is a minimum
rate set by the company you want a 3%
floor (4% if you can get it )the actual
rate will change from time to time as they
generally follow bond rates; but never
below the minimum floor rate .
A cd style annuity will have the same rate
for the duration of the annuity .
Right now i lean more to the fixed annuity
because rates are low .
2 Is there a 1st year bonus ?
Some offer bonus on 1st year deposit but
the bonus tends to be small if any for an
annuity that is open for seniors to buy.
3 Penalties ?
You can draw a percentage 10%-20% yearly
if desired for income after that usually
penalties incure that's customary just find
out what they are.
4. Make sure you trust the agent and the
company if they already invested hurry
because there is a free look window but
with a variable annuity it is very short
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