My mom's received a bit of money (under 100k) when her mom passed away and she spoke to her financial adviser at Fidelity about what she should do with the money. They are trying to convince her to buy a variable annuity.
Their reasoning is that it gives her tax-deferred growth on this money and on any money that she is forced to take via required distributions.
I am wondering why she wouldn't just pick some good mutual funds and pay taxes on the growth when she sells and get effectively the same thing, but not have a life insurance plan with surrender fees etc.
Can anyone help me understand the pros and cons of such a product? I am meeting with Fidelity today to discuss. Please list facts that I can argue rather than "annuities are always bad!"
Some facts for you:
- She is retired, above 67
- She still works on occasion (she might make more than 6500 and can thus contribute that amount to a Roth IRA instead)
- She has 30 days to reverse course on this product
- She wants to invest this inheritance because she isn't in need of the cash currently (other investments and SS)
- No debt, house paid off
- Lives on very little which is good because other than SS, her investments aren't a lot
Thank you, Reddit! I just want whatever is best for my mom and it may even be a variable annuity. But I don't want her tricked into something for which all I have heard about is negative.
Submitted March 31, 2017 at 09:10AM by Bocephis http://ift.tt/2nmEULV
