I found out yesterday that my mom (late 60s, retired, with a good pension and social security) moved about ~$200k from a CD into an annuity at 2.25% in her traditional IRA. It will be three-years before she can withdrawal penalty free (I think!).
1) First of all, why would you put an annuity into a tax deferred account? 2) I think she's in the a 30-day window where she can cancel. Should she? I think so.
For more context, and maybe the bigger problem, is that she has 5 annuities totaling a couple hundred thousand (not in a tax-free or tax-deferred account). Various sizes, various interest rates, various types, various years before we can pull money out without paying up to an 8% penalty.
Does it make sense to have all of your investments in annuities? Everything I've read says no, especially as she does not need fixed income.
Before anyone tells me that I need to talk to her about it or better manage it. I know she shouldn't have been in a cd either. But, she does not listen and does not remember. She never wants to admit that she doesn't know/understand something, so she just plows ahead. It happens with everything....
She spent 10 minutes arguing with me that she had $200k more than she did because she did not remember consolidating them into one account a few years ago. It's just a nightmare, tbh.
Submitted April 08, 2021 at 10:56PM by emacked https://ift.tt/2Q6Luue
