Comments on: Get Rid of Your High-Cost Variable Annuity Easily http://www.consumerismcommentary.com/2008/03/06/get-rid-of-your-high-cost-variable-annuity-easily/ A premiere personal finance blog, established 2003. Within, Flexo discusses his own experiences with money, and he and other authors comment on a wide range of personal finance topics. Sun, 08 Nov 2009 07:50:42 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: Mrs. Micah http://www.consumerismcommentary.com/2008/03/06/get-rid-of-your-high-cost-variable-annuity-easily/#comment-139204 Mrs. Micah Fri, 07 Mar 2008 03:16:18 +0000 http://www.consumerismcommentary.com/2008/03/06/get-rid-of-your-high-cost-variable-annuity-easily/#comment-139204 I like the idea of having an annuity, but the lack of wiggle room really puts me off. I don't like to feel trapped in anything. It's great you're posting some ways to get out of it. I like the idea of having an annuity, but the lack of wiggle room really puts me off. I don’t like to feel trapped in anything. It’s great you’re posting some ways to get out of it.

]]> By: Kyle http://www.consumerismcommentary.com/2008/03/06/get-rid-of-your-high-cost-variable-annuity-easily/#comment-139178 Kyle Thu, 06 Mar 2008 19:36:39 +0000 http://www.consumerismcommentary.com/2008/03/06/get-rid-of-your-high-cost-variable-annuity-easily/#comment-139178 If you do choose to do an exchange, I recommend Vanguard. You can get into one of their variable annuity portfolios (total stock market, reit, balanced index, etc) pretty cheaply. On average I think the total expense runs around 0.5% per year, which is probably less than 1/3 of what you will pay most other places. And that 0.5% is the out-the-door price. It includes all the mortality fees and all that. If you must own a VA, Vanguard is probably the place to be. As far as I know, there are no surrender fees either. If you do choose to do an exchange, I recommend Vanguard. You can get into one of their variable annuity portfolios (total stock market, reit, balanced index, etc) pretty cheaply. On average I think the total expense runs around 0.5% per year, which is probably less than 1/3 of what you will pay most other places. And that 0.5% is the out-the-door price. It includes all the mortality fees and all that. If you must own a VA, Vanguard is probably the place to be. As far as I know, there are no surrender fees either.

]]> By: Eric Toya - LWM Blog http://www.consumerismcommentary.com/2008/03/06/get-rid-of-your-high-cost-variable-annuity-easily/#comment-139168 Eric Toya - LWM Blog Thu, 06 Mar 2008 17:41:19 +0000 http://www.consumerismcommentary.com/2008/03/06/get-rid-of-your-high-cost-variable-annuity-easily/#comment-139168 Sadly for most people it is the surrender fees that keeps them trapped in their high cost annuities. The surrender fees are generally down played by the sales people as, "but it's a long term investment, so this shouldn't matter." Of course, the funds may be for a long term goal, but that doesn't mean that that particular annuity is the right long term investment. Consumers should NEVER accept a lengthy or high surrender fee. Annuities are especially maddening because many financial salespeople sell them because they do not have breakpoints. Breakpoints reduce their commission for large dollar sales. If you MUST consider an annuity, only consider a no-load annuity like that offered by Schwab or Vanguard. It's still more expensive than mutual funds, but I don't believe they stick you with loads or surrender fees. Sadly for most people it is the surrender fees that keeps them trapped in their high cost annuities. The surrender fees are generally down played by the sales people as, “but it’s a long term investment, so this shouldn’t matter.” Of course, the funds may be for a long term goal, but that doesn’t mean that that particular annuity is the right long term investment.

Consumers should NEVER accept a lengthy or high surrender fee. Annuities are especially maddening because many financial salespeople sell them because they do not have breakpoints. Breakpoints reduce their commission for large dollar sales.

If you MUST consider an annuity, only consider a no-load annuity like that offered by Schwab or Vanguard. It’s still more expensive than mutual funds, but I don’t believe they stick you with loads or surrender fees.

]]> By: TFB http://www.consumerismcommentary.com/2008/03/06/get-rid-of-your-high-cost-variable-annuity-easily/#comment-139167 TFB Thu, 06 Mar 2008 17:40:35 +0000 http://www.consumerismcommentary.com/2008/03/06/get-rid-of-your-high-cost-variable-annuity-easily/#comment-139167 The surrender charge *is* the trap. I don't see how you can get out of an expensive annuity "easily" if you have to pay a surrender charge. Once you buy into an annuity, you are trapped. There is no easy escape. Either you let them bleed you with high expenses year after year, or you pay several years worth of high expenses in one shot in the form of a surrender charge and admit your defeat. The surrender charge *is* the trap. I don’t see how you can get out of an expensive annuity “easily” if you have to pay a surrender charge. Once you buy into an annuity, you are trapped. There is no easy escape. Either you let them bleed you with high expenses year after year, or you pay several years worth of high expenses in one shot in the form of a surrender charge and admit your defeat.

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