Comments on: What is a Variable Annuity? http://wealthpilgrim.com/variable-annuities-why-they-stink-how-to-get-out-now/ WealthPilgrim.com -No Money Worries. No Matter What. Thu, 24 May 2012 16:15:05 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Larry Gittens http://wealthpilgrim.com/variable-annuities-why-they-stink-how-to-get-out-now/#comment-35968 Larry Gittens Mon, 13 Feb 2012 04:45:09 +0000 http://326742485#comment-35968 The biggest disadvantage to variable annuities contracts is the treatment of losses. Due to the tax deferred nature of these contracts, there are no capital gains. Gains are treated as ordinary income. It is very difficult to write off losses on variable annuity contracts requiring a knowledgeable CPA. The biggest disadvantage to variable annuities contracts is the treatment of losses. Due to the tax deferred nature of these contracts, there are no capital gains. Gains are treated as ordinary income. It is very difficult to write off losses on variable annuity contracts requiring a knowledgeable CPA.

]]> By: Neal http://wealthpilgrim.com/variable-annuities-why-they-stink-how-to-get-out-now/#comment-2394 Neal Thu, 22 Oct 2009 00:09:04 +0000 http://326742485#comment-2394 This is maddening. Not much you can do other than tell your employer to stop playing golf with the insurance agent! That's often how 401(k)s "offer" VA's.....I believe it's completely against the interest of the employees and the only reason firms do it is because of personal relationships. This is maddening.

Not much you can do other than tell your employer to stop playing golf with the insurance agent! That’s often how 401(k)s “offer” VA’s…..I believe it’s completely against the interest of the employees and the only reason firms do it is because of personal relationships.

]]> By: michael http://wealthpilgrim.com/variable-annuities-why-they-stink-how-to-get-out-now/#comment-2387 michael Wed, 21 Oct 2009 04:38:16 +0000 http://326742485#comment-2387 ok, here is one for you. feburary of '06 i finally get started in a 401k. i was pleased as punch to finally be doing something about my retirement. i was so pleased that i didn't pay any attention to the fact that the company had just changed from a mutual fund 401k to a VA 401k. i just "learned" this last week. Oct 15, 2009. the value of the account is about 22,750.00 i am so disappointed that i have no power to fully control my investing and that i don't understand the stupid calculus formula that describes what my income will be when i start to "withdraw." i feel like a big idiot. can't roll it over until i leave the company. i am considering discontinuation of the automatic payments from payroll and starting a separate IRA. ??? the brochure from the company...happens to be one mr. buffet recently sold his stock from...is very complicated...what happens to fools who mix up 401k plans with VAs? ok, here is one for you. feburary of ’06 i finally get started in a 401k. i was pleased as punch to finally be doing something about my retirement. i was so pleased that i didn’t pay any attention to the fact that the company had just changed from a mutual fund 401k to a VA 401k. i just “learned” this last week. Oct 15, 2009. the value of the account is about 22,750.00 i am so disappointed that i have no power to fully control my investing and that i don’t understand the stupid calculus formula that describes what my income will be when i start to “withdraw.” i feel like a big idiot. can’t roll it over until i leave the company. i am considering discontinuation of the automatic payments from payroll and starting a separate IRA. ??? the brochure from the company…happens to be one mr. buffet recently sold his stock from…is very complicated…what happens to fools who mix up 401k plans with VAs?

]]> By: Neal Frankle http://wealthpilgrim.com/variable-annuities-why-they-stink-how-to-get-out-now/#comment-1511 Neal Frankle Mon, 03 Aug 2009 13:16:04 +0000 http://326742485#comment-1511 Parag, Without completely discounting the comments of the people who justify VA's, I take your point. I don't agree with the folks who like the VA's but I still learn a lot from them. Thanks for taking the time to make your points as well as you did. Neal Parag,

Without completely discounting the comments of the people who justify VA’s, I take your point.

I don’t agree with the folks who like the VA’s but I still learn a lot from them.

Thanks for taking the time to make your points as well as you did.

Neal

]]> By: Parag http://wealthpilgrim.com/variable-annuities-why-they-stink-how-to-get-out-now/#comment-1498 Parag Sat, 01 Aug 2009 13:16:18 +0000 http://326742485#comment-1498 Neal, Thanks for the article. I think what you've witnessed here are examples of the venomous repsonse people get from financial advisors ( aka insurance salesmen) when questioned about the utility of VAs. I usually find that when people's responses are particularly vehement, it usually stems from some deeper underlying insecurity about the matter being criticized. I've had the unfortunate experience of having to rehash my father's investment portfolio and have found it to be filled with nonsense such as VAs and redundant Whole Life Policies. He had a smaller annuity with another individual some time ago and most recently had his other traditional IRA rolled over into a new annuity product 3 years ago. Of course I dont have to tell you the incentive for beginning a new annuity contract. It certainly wasn't for my dad's benefit. The surrender charges are now exorbitant. Luckily, as you mention, the taxes are a nonissue due to market performance.. we are now doing the math to figure out the cost/benefit of paying up the surrender charge. Thanks again for all the work that you are doing and let the punches roll :) Oh... and if anyone else reads this... pleaseeeee dont let yourself or your loved one get swindles into a VA..Educate yourself , take control, and dont let the fearmongers and the financial institutions/establishment make you believe that you can't do this ( manage your own money ).. you certainly can. Cheers P Neal,
Thanks for the article. I think what you’ve witnessed here are examples of the venomous repsonse people get from financial advisors ( aka insurance salesmen) when questioned about the utility of VAs. I usually find that when people’s responses are particularly vehement, it usually stems from some deeper underlying insecurity about the matter being criticized.
I’ve had the unfortunate experience of having to rehash my father’s investment portfolio and have found it to be filled with nonsense such as VAs and redundant Whole Life Policies.
He had a smaller annuity with another individual some time ago and most recently had his other traditional IRA rolled over into a new annuity product 3 years ago. Of course I dont have to tell you the incentive for beginning a new annuity contract. It certainly wasn’t for my dad’s benefit.
The surrender charges are now exorbitant. Luckily, as you mention, the taxes are a nonissue due to market performance.. we are now doing the math to figure out the cost/benefit of paying up the surrender charge.
Thanks again for all the work that you are doing and let the punches roll :)
Oh… and if anyone else reads this… pleaseeeee dont let yourself or your loved one get swindles into a VA..Educate yourself , take control, and dont let the fearmongers and the financial institutions/establishment make you believe that you can’t do this ( manage your own money ).. you certainly can.
Cheers
P

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