Quote:
Originally Posted by Gigi3000
I'm 63, cost basis $160000, gain $200000. Bank advisor offered indexed variable annunity, 10 year spread. Anyone familiar with these? I have no experience with annunities. Trying to figure out whether to take lump sum and just pay the $70000 tax bill or do the annunity. If I take the annunity I'd put it into index mutual funds. My situation is very simple...I have no income, lots of savings, no mortgage on home, no tax deductions. If take annunity, goal.would be income I guess. Not taking social security, maybe take at 65.or wait until 70...
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The previous responses are correct to tell you to get a fee only financial planner i.e. one that does not sell any investment products. The main reason is this person will look at the specific products your money is currently in and they will also look at all avenues for inheritance that could reduce your tax outlay. They will not be looking at a specific product to put your money in that makes them a commission or only what their bank sells. Can't stress enough that they will look at your entire situation and will ask what your goals are in the future to give you the best strategy to make those goals a reality. An example would be giving you a recommendation on when taking social security is best to meet those goals. It might cost you $800 or $1,000 upfront for a good advisor, but they can save you thousands on future taxes or mistakes picking the wrong investment products to meet your goals.
We interviewed a few advisors and talked about what we wanted to get out of the process and got an overview of what they did, what to expect, fees, etc. Once we were set on an advisor, then we had to bring them statements and details of accounts like the annuity you speak of inheriting. After they had our information, it took them about a week and then we met again to go over what they came up with. The binder of information was a couple inches thick and provided detailed analysis from current age to end of life expectancy. It was well worth the $1,000 we spent as it kept us from making some mistakes that would have cost much more in returns and taxes over the following few year. Hope this helps.