We don’t get all of the facts, but I appreciate the viewpoint of two professionals

November 13, 2024 by Sheryl J. Moore

 A MarketWatch article, ‘We now realize what a horrible mistake this was.’ Almost 10 years ago, we bought three $100K annuities that guaranteed 5%. Now we want out. What’s the move? asks:

“We now realize what a horrible mistake this was.’ Almost 10 years ago, we bought three $100K annuities that guaranteed 5%. Now we want out. What’s the move?”

Of course we don’t get all of the facts, but I particularly appreciate the viewpoint of two professionals-

“…certified financial planner Al Faber, CFP®, ChFC®, CLU® at Woodson Wealth Management says you likely need a more in-depth analysis before you sell the annuities and answers to questions such as, what’s your current age, health status, liquidity needs, time horizon and risk tolerance? Are there any fees or penalties associated with liquidating the annuities? What are the potential tax consequences of selling the annuities?”

“Keep in mind that annuities can provide valuable benefits such as guaranteed rates and downside protection. “My first recommendation would be to obtain specific details regarding the term of the contract and surrender fees, charges and penalties you would incur should you decide to reposition your $350,000. Once your contracts are out of surrender, meaning you can leave without incurring any penalties for early withdrawal, consider initiating a custodial transfer to a new IRA so you don’t incur tax consequences,” says certified financial planner Marguerita (Rita) Cheng, CFP® Cheng at Blue Ocean Global Wealth.” -sjm