Advice on Investing in a Variable Annuity?
I am 67, retired, drawing Social Security of $800 month which is adequate. Cashed in my 401(k) of $14,000 but now need to place it in an IRA somewhere within the next 30 days. I was advised by a Financial Planner of a local bank to put it into a variable annuity, but I am not sure after reading all the pros and cons. Any advice?
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posted by Jeffrey D. Voudrie @ 3:11 AM
3 comments
3 Comments:
Do you have any other investable assets or does this money from the 401k make up most of your savings?
I have some precious metals that are probably worth about $20K that I have been holding onto thinking they will go up. Don't know if I should sell these and invest in something else or keep holding them. Other than those, the 401(k) is all I have. My son owes me about $42K which he is paying me at $600 per month for the next 6 years.
Based on the limited resources that you have, I don't feel that it makes sense to move your money into a variable annuity. It's very important that you be able to access that money should you need it for some unexpected emergency.
It's also probably not worth taking much risk with that money because in the long run it's not going to change your lifestyle if you earn 10% instead of 5%. Yet it can negatively affect your lifestyle if you lose 10% instead of earning 5%.
Regarding the precious metals, I expect hard assets to continue to appreciate over the next several years. From that standpoint it may be worth hanging on to them. It's also important that you can get at it if you need it.
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