Sunday, March 19, 2006

struggling to shift into my new investment allocation model

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As mentioned earlier, I'm in the process of selling off several off several cash value insurance policies and reinvesting the proceeds in ETFs.

Last night I saw an advertisement by Fidelity about their low cost 0.25% mgmt fee annuities. Essentially it discussed rolling over annuities to their lower cost products. The key difference between them is Fidelity's lack of a guaranteed death benefit (in exchange for lower mgmt fees) and are more of a pure investment product (albeit with a 0.25% annual fee).

I'm going to give them a call tomorrow to see if they can help me, however, I fear that I will still have to pay ridiculous back end charges for cashing out the policies (the fees add up to almost $7-10k) - it really upsets me.

What I'd like to hear is that my variable annuity can be rolled over without paying the surrender charges (back end fees), but what I'm pretty sure I'll here is this:

  1. Sure I can roll it over, but I still have to pay the surrender charges
  2. I'll be able to defer the capital gains tax obligations
  3. I'll have lower management fees

I'm also hoping I'll have transparent investments that I can actually get online quotes for and review in morningstar, etc....

However, since I'm most likely going to have to pay the surrender charges, I'll probably not reinvest the money (rollover the money) into new annuities and put it directly into the ETFs as planned -- and take the surrender charges on the chin.

I have a feeling it will take another 6-8 weeks before the new term policies are in place. Consequently, I'll have my money stuck in these ugly little vampires for a bit longer.

Have a great Sunday,

Making Our Way

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