Fixed Indexed Annuity
 

My wife just retired and won’t take Social Security for 5 years. I am considering replacing her income with a Fixed Indexed Annuity with West Financial Group. Has anyone used them or have a fixed indexed annuity they would recommend for immediate income? I am 66.

I wouldn't. It is a life insurance contract. Fixed index annuities have high fees and surrender charges. You can achieve better returns by investing the money yourself in a diversified portfolio of stock and bond index funds. I would suggest Vanguard Investments or Fidelity Investments.

I would suggest that you ask the company to send you a copy of the "entire" annuity contract so you can review it before you sign it. They will probably refuse to send it to you.

Have you look at the return you will get. In most cases you are better off not doing an immediate income annuity. CD’s rate are high. Think about laddering CD’s or take what you need the first year and put the balance in a one year CD at 5%.
With the immediate annuities, you tie up your principal, you can’t touch it at all and they give you minimal returns. In fact in most cases the agent selling the annuity makes more than you.
Also putting in an index annuity gives you no benefit of the index because once you annuitize the funds go into a fixed rate.
If you give some numbers like original deposit and monthly income I can help with the numbers.

Fixed Index Annuities do not have high fees. The fees come from riders that you add to them. If you have an index annuity without riders and have a fee you bought the wrong one because 99% of them do not have fees

Some weeks ago we attended a dinner seminar they put on. They spent the entire hour pushing this.

They made claims that I found unbelievable and when I asked questions he never did answer me.

I would never buy an annuity. There is an old saying, annuities are sold and never purchased.

Also index annuities are not the right vehicle for immediate income because you are going straight from the principal your first year, because index credit interest after your first year anniversary.
You can private message me and I will go over any questions you have.

Agree and disagree
Not a fan of income annuities but simply Fixed or Fixed Index have a good place for you safe funds. I five year fixed annuity paying 5.05% guaranteed for the your safe funds make sense.
An Index Annuity with income riders is what a lot push here in TV and I agree those are bad but an Index Annuity with no rides can be a way to safely grow your funds without fees or risk to your principal.

Why not just buy CDs with your safe money?

Also, if some of your money is invested in stocks, you will get a reduced capital gains tax rate, but any income you earn in an annuity is taxed at your ordinary tax rate.

do some dd and invest in the market. Investors are making a killing this year

I would not invest in an annuity, put your money in a CD.

OK but to me a better way to grow our funds is a basket of no load mutual funds with low fees with a good growth record.

A laddered CD for the next 5 years seems to the way to go in your scenario.

Also, my advice any time the investment question comes up, take time to read Paul Merriman’s 3 FREE ebooks.
1. First-Time Investor
2. 101 Investment Decisions
3. Get Smart or Get Screwed (read this first!)

Found at paulmerriman.com

Also on his site are recommended portfolios for using Vanguard, Fidelity, T.Rowe Price or Schwab for DYI'ers. Much good info, ignore the puffery and sales pitches.

Also, if you want to know too much about annuities, listen to Stan The Annuity Man® | Brutally Honest Facts About Annuities podcasts.

Podcast | The Annuity Man

Would the payout be more than you paid?
Without the actual terms of the annuity I would say do not get it.
I think annuities are good when you are toward the end of your life and your savings are low. The annuity would provide security that you will have income for the rest of your life where as the savings may not last. Thus you are buying insurance that you will not run out of money.

Annuities are only good for someone who cannot budget their money and find better investments

If you choose to buy an annuity I would not buy from Mr. West as he was arrested for a felony offense (it hasn't gone to trial, I believe). It involved a waitress after hours with alleged sexual overtones. He has pled not guilty.

While he is innocent until proven guilty there are dozens of salespersons who have not been arrested. I only deal with people above reproach who have not been accused of false imprisonment and battery against women.

Ground News - Prominent financial adviser arrested after alleged attack at Wolfgang Puck

You can Google "West Financial arrest" for other news articles.