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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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Indexed mutual funds are a great place to put your money. In my opinion, annuities are among the worst places to put your money. They won’t give you that big an annuity, and usually when you die, it is gone. With a mutual fund, when you die, it can be passed on to your heirs. Put the money in the fund and leave it there. Don’t try to play the market. Don’t get nervous if it drops—it will go back up. You can arrange to have a certain amount put in your bank account every month, just like with Social Security, but better if you just let it grow. I like T Rowe Price New Horizons Fund right now. My mutual funds have doubled in value since the Fall of 2016. That’s 100% in five years. Don’t listen to the people who say that at your age you should put part of it in bonds, and part in the money market, etc. that’s how brokers get their fees and get rich. With a good indexed mutual fund from a company with a very good reputation, you pay very little in fees. By contrast, some of these brokerages and money managers will charge you a lot in fees, like thousands a year.