|
Mr. Glass posted:really sorry for your loss. my dad died not too long ago and we had to deal with a similar issue, although the annuity was passing to my mom. what i learned is that what you can do in this situation is often hyper specific to the specific annuity terms that were agreed to originally; it's not like an IRA where there are general rules that apply across the board (or at least, the general rules are a lot looser). in her case, "stretching" the annuity boiled down to buying a completely new annuity, which i assume would have also involved a kickback for the dude managing it/selling the new one. Awkward Davies posted:I’m so sorry about your Mom. Antillie posted:It sounds like you are young. This means that those fees will really add up over time. You would need to calculate what the taxes would be and do some comparisons. jokes posted:I'm very sorry for your loss -- I'm sure thinking about money is the last thing you want to do right now. Thanks everyone. I'm 43 so not really 'young' and also have close to zero retirement besides some house equity 8 years into a mortgage, and had kind of resigned myself to working forever until this happened. My mom was in incredibly good health so we had hoped she'd make it to her 90s, which kind of backfired since the cancer was at stage 4 before any symptoms appeared. I'll go dig through the disclosure and handouts they gave me quite a bit more. I did see that the annualized returns over the last 5 years were 4% which seemed pretty mediocre, but I'd also paid so little attention to the market that I didn't know it had a downturn in 2022. When I brute forced the numbers in excel, assuming 4% returns to keep, 7% returns in a index tracker, and a 22% tax rate, it only takes 20 years for the tax now and reinvest myself to come out ahead. But I need a lot more info and I don't think that accounts for the non-taxable portion - which makes it seem even more obvious I should be getting out of this annuity. I do like the idea of talking with a financial advisor who doesn't have a stake in this, I have some friends in the industry who can probably point me to the right person.
|
#
?
Feb 15, 2024 18:37
|
|
|
|
| # ? May 18, 2024 04:35 |
|
|
No employment person - Consider Roth conversions during a low-income year (waiting until like October seems sensible). Annuity person - mid-40's is unlikely to make sense UNLESS it's a way to guarantee some retirement savings that otherwise would be spent frivolously.
|
|
#
?
Feb 15, 2024 18:42
|
|
|
smackfu posted:I’m surprised they don’t make the brokerages calculate more of this stuff. If they don’t report values to the IRS or state revenue service, mistakes will never get caught outside of a full audit. They probably should calculate it and report it, but I'm not surprised there is no push to do so. Most likely, the majority of mistakes are people not taking the state tax deduction because it involves looking up a number and doing a math. If you just enter the numbers on your 1099 and consider it done, its very likely you will overpay state taxes.
|
|
#
?
Feb 15, 2024 18:44
|
|
|
trevorreznik posted:Thanks everyone. I'm 43 so not really 'young' and also have close to zero retirement besides some house equity 8 years into a mortgage, and had kind of resigned myself to working forever until this happened. My mom was in incredibly good health so we had hoped she'd make it to her 90s, which kind of backfired since the cancer was at stage 4 before any symptoms appeared. I’m not certain if you’re currently doing this or not ?but you can always, from now until retirement, max your IRA contributions using earned income and/or the annuity which will likely offset the tax burden and increase overall returns so the 22% figure might not be as bad as you’re showing. Your 7% returns in an index is also lower than most conventional calculations. 4% returns over the last 5 years is really bad. And is enough to prompt a heavy review. jokes fucked around with this message at 18:58 on Feb 15, 2024 |
|
#
?
Feb 15, 2024 18:49
|
|
|
jokes posted:You can, from now until retirement, max your IRA contributions using earned income and/or the annuity which will likely offset the tax burden and increase overall returns. Is it bad? It’s an annuity. Isn’t the point of an annuity to maintain value and provide cash flow? Annuities aren’t about growth. They’re about fixed income.
|
|
#
?
Feb 15, 2024 18:50
|
|
|
I guess I mean it’s bad for his case which seems to be more about maximizing returns than considering cash flows, since he’s comparing it to index investment.
|
|
#
?
Feb 15, 2024 18:59
|
|
|
jokes posted:I guess I mean it’s bad for his case which seems to be more about maximizing returns than considering cash flows, since he’s comparing it to index investment. Oh yeah for him going forward it might not be ideal. I’m just saying, it seems like the existing financial advisor did what was asked, and wasn’t screwing OP’s Mom. OP I’m curious whether your calculations included reinvesting the 4% return from the annuity?
|
|
#
?
Feb 15, 2024 19:07
|
|
|
Thanks for the help, folks. I think I need to take this paperwork to an advisor because as I went through it, I realized that the overview is for two account my mom had : one annuity, one investment, where the investment side was slightly larger. The paperwork doesn't make much sense to me because it seems to show no return at all on the annuity and 4.35% for both combined, but also separately shows the annuity itself went up a sizable amount. One breakout shows the investment annualized since inception is 4.04% and the annuity annualized 5 year 5.54% (but no data from inception). I think I'm getting too emotional that my mom got ripped off even though that might not be what happened and I need to step away from figuring this out right now. I did find the annuity claim form though which is wild, here are the options: A) lump sum B) new contract (including internal exchanges) C) spousal consolidation into existing contrract D) spousal continuation E) tax-free external transfer (may not be available) F) Deferral for 5 years G) Stretch (life-expectancy) distribution H) Continue annuitized benefit payments I) Income option (annuitization) Gee whiz. trevorreznik fucked around with this message at 19:44 on Feb 15, 2024 |
|
#
?
Feb 15, 2024 19:42
|
|
|
You will want the word "Fiduciary." That won't be sufficient, but it's necessary.
|
|
#
?
Feb 15, 2024 20:11
|
|
|
It's hard to say if she got ripped off without knowing a lot more details that we won't get here and that you really shouldn't focus on. I mean, BND has an annualized 5-yr return of like <1%. Vanguard's 2020 target date fund returned ~4.5% in the last 5 years. Right now, today, figuring out what you want to do with whatever the current value of those assets are is important, not looking back to see how much she could have gotten. If you sold today, you would get $X and would expect Y% returns. Or, you can keep it invested and you would receive Z% returns. If your only goal is to maximize returns within your risk profile then there will be a right answer when you (or more accurately your fiduciary) run the numbers. It sounds like you have a lot of questions, and it's extremely worth it to get a professional opinion. It also gives you the space to deal with the WAY more important, and pressing aspects of your life. Every hour spent loving around in Excel is an hour not spent tending to your wounds. jokes fucked around with this message at 20:23 on Feb 15, 2024 |
|
#
?
Feb 15, 2024 20:18
|
|
|
Great, thanks. I quickly found a NAPFA member near me that's a fee-only fiduciary advisor and I'll dig around some more.
|
|
#
?
Feb 15, 2024 20:33
|
|
|
So sorry for your loss. I just lost my dad in the past month and am going through similar processes. Im close to age with you, and there aren’t words to describe the pain. I’ll be having my own post soon now that I’ll need to address tax situations in the future with inherited money. What I’ve learned so far is most brokerage accounts should be eligible for a step up in cost basis. This means you don’t owe any taxes on gains prior to the date of death. The brokerage processes all of this. I don’t know much about annuities but I don’t think they are eligible for a setup so you’ll want to plan the distributions around your tax situation. I wouldn’t personally keep the annuity going. I’m receiving my share of an IRA, which I will owe taxes on the entire holdings, but am receiving it as an “inherited IRA” account which gives me a 10 year draw down period. I flirt with the 12/22 tax bracket line and will be calculating my withdrawals around that. Sending internet hugs. Loan Dusty Road fucked around with this message at 16:49 on Feb 16, 2024 |
|
#
?
Feb 15, 2024 21:30
|
|
|
Any thoughts on which brokerage is best for a "new" investor? I'm finally maxing my 401k and am looking at starting a non-tax advantaged account. Plan is to buy and hold index funds, looks like ETFs generally have the lowest expense ratios. I see there are a bunch of Fidelity mutual fund indexes offering a 0% expense ratio, but don't know enough to evaluate if there a better offering vs a comparable ETF.
|
|
#
?
Feb 17, 2024 02:23
|
|
|
Vanguard or Fidelity are both good
|
|
#
?
Feb 17, 2024 02:49
|
|
|
I'm not the most experienced investor but my vote goes to Fidelity. They have a decent website, good customer service, and a lot of great cash management/hsa features if you're into those. Vanguard is very good for the low fees and their "shareholder-owned" organization, but lacks some convenience and their cash management isn't as good. Schwab has nothing. I don't know why you'd pick it over Vanguard or Fidelity.
|
|
#
?
Feb 17, 2024 02:52
|
|
|
They're all great
|
|
#
?
Feb 17, 2024 02:56
|
|
|
Jabarto posted:I'm not the most experienced investor but my vote goes to Fidelity. They have a decent website, good customer service, and a lot of great cash management/hsa features if you're into those. Schwab’s website, app, and customer support are leagues beyond Vanguard and you can get equally low cost funds and low transaction costs
|
|
#
?
Feb 17, 2024 03:37
|
|
|
I'm pretty ignorant about the whole topic, but doesn't Vanguard have a fiduciary responsibility while Fidelity is just some free market capitalist cowboy poo poo? I have vague memories of reading some years ago about Fidelity manipulating employers into inferior 401k investment choices because it was more profitable to them, while Vanguard target date funds were what the company genuinely believed to be the best choice.
|
|
#
?
Feb 17, 2024 04:32
|
|
|
If it helps make a choice, Schwab is giving $101 away for new accounts right now. https://www.schwab.com/investing-starter-kit Fidelity also gives a $100 signup regularly too but not at the moment. I would make a Schwab account today for the funbux and then a Fidelity account later when their promotion is running and then just pick whichever website you like better. E: regarding those zero fee Fidelity funds, everything I’ve read says that they are only “worth” it in tax advantaged accounts. Reason being that if you ever decided to transfer your assets to another brokerage, you’d have to liquidate those funds first which will/can be taxed. This isn’t a problem in a tax advantaged account. Boris Galerkin fucked around with this message at 05:28 on Feb 17, 2024 |
|
#
?
Feb 17, 2024 04:45
|
|
|
litany of gulps posted:I'm pretty ignorant about the whole topic, but doesn't Vanguard have a fiduciary responsibility while Fidelity is just some free market capitalist cowboy poo poo? I have vague memories of reading some years ago about Fidelity manipulating employers into inferior 401k investment choices because it was more profitable to them, while Vanguard target date funds were what the company genuinely believed to be the best choice. Vanguard is owned by the funds which are owned by shareholders of those funds. that doesn't prevent the company from doing a poor job of prioritizing customer service and having a sometimes garbage website. Fidelity is regarded as having better customer service but you're right that if you're not paying attention you can put your money in a very similar fund that has 10x the expense ratio, which is lovely, and part of how they make their money.
|
|
#
?
Feb 17, 2024 05:01
|
|
|
litany of gulps posted:I'm pretty ignorant about the whole topic, but doesn't Vanguard have a fiduciary responsibility while Fidelity is just some free market capitalist cowboy poo poo? I have vague memories of reading some years ago about Fidelity manipulating employers into inferior 401k investment choices because it was more profitable to them, while Vanguard target date funds were what the company genuinely believed to be the best choice. Fidelity is a privately held, for profit company. They've got some lousy products that are too expensive and seem to be designed to take advantage of customers who find investing and finance confusing. But, they also have some low cost or even no cost products that are among the best in the industry. Vanguard is owned by its mutual funds, which means it is owned by its funds shareholders. While the actual impact of that is a bit debatable, Vanguard has extremely competitive low cost products that are often the best in the industry. They have very few products that are investor unfriendly. As a point of comparison, Fidelity is happy to sell its customers Bitcoin both directly and via an ETF. Vanguard not only doesnt offer Bitcoin, but actually prevents its brokerage customers from purchasing Bitcoin ETFs from third parties. I think that says a lot to their philosophical differences.
|
|
#
?
Feb 17, 2024 05:26
|
|
|
Something that REALLY turned me off to Fidelity today was that I had to actually call them and their robot asked me to “enter your password using the letters on the keypad”. This means that if my password was say “diCK” for example then on the phone I’d have to enter “3425” which is raising all sorts of red flags because 3425 could also spell other passwords and also it means they don’t care if my password had capitals and since I can’t type in symbols on the keypad I’m guessing they don’t care about those either. I posted about this in the infosec thread and some former Facebook goon basically said yes it’s safe and standard practice but Jesus Christ.
|
|
#
?
Feb 17, 2024 05:38
|
|
|
Boris Galerkin posted:Something that REALLY turned me off to Fidelity today was that I had to actually call them and their robot asked me to “enter your password using the letters on the keypad”. This means that if my password was say “diCK” for example then on the phone I’d have to enter “3425” which is raising all sorts of red flags because 3425 could also spell other passwords and also it means they don’t care if my password had capitals and since I can’t type in symbols on the keypad I’m guessing they don’t care about those either. I posted about this in the infosec thread and some former Facebook goon basically said yes it’s safe and standard practice but Jesus Christ. I had a weird interaction with the Fidelity customer chat last week that also has me second guessing doing too much with them. I have a couple of 401(k) accounts that I recently rolled the balances over to another 401(k), so they were sitting empty. I reached out to Fidelity over their customer chat on their website to close them, and was told they couldn’t be closed, only hidden in the UI. When I asked why, I was told “for record keeping and security purposes”, the accounts cannot be closed. I tried to ask follow up questions and the chat person just copy and pasted the same “for record keeping and security purposes” line over and over again until I finally gave up and ended the chat. It was super weird, and kind of weirds me out that the accounts will just sit open, even though I can’t use them anymore. Maybe I’m overthinking it, but it was a really weird interaction
|
|
#
?
Feb 17, 2024 15:48
|
|
|
drk posted:Vanguard is owned by its mutual funds, which means it is owned by its funds shareholders. While the actual impact of that is a bit debatable, Vanguard has extremely competitive low cost products that are often the best in the industry. They have very few products that are investor unfriendly. ”bit debatable” is on point, yeah. it’s not like VG fund shareholders get input or a vote on anything at all related to VG. they have fewer rights and power than common stock shareholders of public companies. VG’s power is entirely concentrated in its board and execs and they will not even make C-level exec compensation known to its funds’ shareholders. there is substantially more public oversight and transparency at a publicly traded brokerage. since Bogle left his leadership role (and also since he died) they have consistently pushed more actively managed products and services at odds with the popular “boglehead” approach (I can’t tell you how many emails I deleted about this: https://investor.vanguard.com/advice/robo-advisor ), plus their site/app got totally enshittified a few years ago. they’re fine if you do nothing but autoinvest in simple accounts but one could say the same for most brokerages. I do give them props for pushing the low cost index revolution 20+ years ago but they’re not driving fees down there anymore. Just as often it’s someone like Blackrock, Fidelity, or Schwab with lowest-in-class fund ERs.
|
|
#
?
Feb 17, 2024 16:41
|
|
|
Pipistrelle posted:I had a weird interaction with the Fidelity customer chat last week that also has me second guessing doing too much with them. I have a couple of 401(k) accounts that I recently rolled the balances over to another 401(k), so they were sitting empty. I reached out to Fidelity over their customer chat on their website to close them, and was told they couldn’t be closed, only hidden in the UI. When I asked why, I was told “for record keeping and security purposes”, the accounts cannot be closed. I tried to ask follow up questions and the chat person just copy and pasted the same “for record keeping and security purposes” line over and over again until I finally gave up and ended the chat. It was super weird, and kind of weirds me out that the accounts will just sit open, even though I can’t use them anymore. Maybe I’m overthinking it, but it was a really weird interaction I personally wouldn't worry about it, but I definitely understand it being weird. My guess is that there are enough edge cases -- people calling up a year later and demanding records, etc -- that it's cheaper for them to just leave the account open. Sometimes I see people post about "I desperately need to know the cost basis for this investment I bought 20 years and 5 account transfers ago", but I don't know enough about 401ks to know if that kind of thing would be relevant to a 401k. Now, the thing with entering a password on a phone has me genuinely mad. Like, are they storing the "phone keypad version" of your password in plaintext, or a hash of it, or is your actual password in plaintext somewhere...no way of doing this seem acceptable? It's like when I realized a random door-to-door ATT salesperson could see my security questions and answers, along with all my account info. It's a miracle that we aren't all having our accounts drained on a daily basis.
|
|
#
?
Feb 17, 2024 17:15
|
|
|
I posted about it here: https://forums.somethingawful.com/showthread.php?threadid=3750534&perpage=40&noseen=1&pagenumber=495#post537838891 There’s someone that used to work for Facebook? and said it’s common to basically treat users like loving dumbasses and save your password in all caps and with a capitalized first letter because it’s better for the users???? It blows my mind but this isn’t really place to discuss it. Just thought I’d mention it. E: vvv well the thing is my password should be immutable. I entered the exact sequence of letters and symbols for a reason. Nobody should be saving a version of the password in all caps on the chance that I had caps lock on. And nobody should be translating my alphanumeric symbol password to 9 loving numbers. Boris Galerkin fucked around with this message at 17:28 on Feb 17, 2024 |
|
#
?
Feb 17, 2024 17:25
|
|
|
remembertorelax posted:Now, the thing with entering a password on a phone has me genuinely mad. Like, are they storing the "phone keypad version" of your password in [...] a hash This seems like a better option than "key in your SSN " and afaik they're all doing hashes. How else should they be verifying someone that is better? Most info about people, like their SSN, has been exposed in various breaches.
|
|
#
?
Feb 17, 2024 17:25
|
|
|
Pipistrelle posted:I had a weird interaction with the Fidelity customer chat last week that also has me second guessing doing too much with them. I have a couple of 401(k) accounts that I recently rolled the balances over to another 401(k), so they were sitting empty. I reached out to Fidelity over their customer chat on their website to close them, and was told they couldn’t be closed, only hidden in the UI. When I asked why, I was told “for record keeping and security purposes”, the accounts cannot be closed. I tried to ask follow up questions and the chat person just copy and pasted the same “for record keeping and security purposes” line over and over again until I finally gave up and ended the chat. It was super weird, and kind of weirds me out that the accounts will just sit open, even though I can’t use them anymore. Maybe I’m overthinking it, but it was a really weird interaction I have had that same interaction. I have a bunch of old 401k that are empty and an old espp that I can't do anything with but it still shows up.
|
|
#
?
Feb 17, 2024 17:29
|
|
|
I did my grad school internship with a consumer products company in the summer of 2010, worked there for a total of 11 weeks. I somehow was included in their pension and 401k programs. Both still show up, with zero balances, in Fidelity.
|
|
#
?
Feb 17, 2024 18:45
|
|
|
Pipistrelle posted:I had a weird interaction with the Fidelity customer chat last week that also has me second guessing doing too much with them. I have a couple of 401(k) accounts that I recently rolled the balances over to another 401(k), so they were sitting empty. I reached out to Fidelity over their customer chat on their website to close them, and was told they couldn’t be closed, only hidden in the UI. When I asked why, I was told “for record keeping and security purposes”, the accounts cannot be closed. I tried to ask follow up questions and the chat person just copy and pasted the same “for record keeping and security purposes” line over and over again until I finally gave up and ended the chat. It was super weird, and kind of weirds me out that the accounts will just sit open, even though I can’t use them anymore. Maybe I’m overthinking it, but it was a really weird interaction I've had that with accounts at other brokers as well, they claim the account can't be closed only hidden, even wtih a 0 balance.
|
|
#
?
Feb 17, 2024 19:18
|
|
|
Pipistrelle posted:I had a weird interaction with the Fidelity customer chat last week that also has me second guessing doing too much with them. I have a couple of 401(k) accounts that I recently rolled the balances over to another 401(k), so they were sitting empty. I reached out to Fidelity over their customer chat on their website to close them, and was told they couldn’t be closed, only hidden in the UI. When I asked why, I was told “for record keeping and security purposes”, the accounts cannot be closed. I tried to ask follow up questions and the chat person just copy and pasted the same “for record keeping and security purposes” line over and over again until I finally gave up and ended the chat. It was super weird, and kind of weirds me out that the accounts will just sit open, even though I can’t use them anymore. Maybe I’m overthinking it, but it was a really weird interaction yup i have this with a 401(k) from an old employer 15 years ago, i just hid it and it's not a big deal
|
|
#
?
Feb 17, 2024 20:41
|
|
|
A 401k is not a checking account. It's not something that you close. It's removed from the system according to the record retention schedule set by the record keeper.
|
|
#
?
Feb 17, 2024 21:28
|
|
|
I've had quite a bit of interaction with Fidelity customer service both over the phone and in person at a local branch. Overall they are pretty great. Much better than most giant companies I have dealt with over the years. When I rolled my wife's rIRA and tIRA over to them from another provider they accidentally swapped the balances, a huge no no, but quickly fixed the issue once I called them up and pointed out their mistake. There were also very helpful in getting a bunch of DRS shares I had in a few companies transferred over from Computershare to my Fidelity brokerage account. They helped me navigate the dark sorcery that is Computershare's transfer paperwork and Ireland's arcane stamp tax exemption process in person. They even filled out all the forms for me and paid to next day send them over to Computershare. They made what was truly an annoying and complicated process much easier. To their credit they have never tried to sell me active management services or push me towards any AUM percentage fee products. But that may be due to me making it pretty clear that I was a DIY index investor when I did speak to them in person. They clearly offer such services and would probably love nothing more than to start collecting 1% AUM from me. But like I said, they haven't tried to sell me on it beyond mentioning in passing that they could assist me in managing my investments. Antillie fucked around with this message at 21:59 on Feb 17, 2024 |
|
#
?
Feb 17, 2024 21:36
|
|
|
Antillie posted:a bunch of DRS shares I had You trying to ride them to the moon or what?
|
|
#
?
Feb 17, 2024 21:42
|
|
|
pyknosis posted:You trying to ride them to the moon or what? No they were shares given to me by my grandfather when I was 2 or 3. They were originally actual physical paper stock certificates from the early 80's before I had to convert them to DRS in the early 2010s. Converting from DRS to normal brokerage was part of the reason the transfer to Fidelity was such a hassle. I am super glad to be rid of them. Antillie fucked around with this message at 21:57 on Feb 17, 2024 |
|
#
?
Feb 17, 2024 21:53
|
|
|
Oh that's actually really nice. Gotta stop letting the meme stock thread rot my brain. FWIW I've had good experience with Fidelity's customer support too, although I'm new and have tiny li'l accounts.
|
|
#
?
Feb 17, 2024 22:04
|
|
|
daslog posted:A 401k is not a checking account. It's not something that you close. It's removed from the system according to the record retention schedule set by the record keeper. If they had just said that, I would have been fine with it. But the copy and pasting the same line over and over again when asked for clarification is what frustrated me. I went ahead and hid the accounts so I at least don’t see them in the UI anymore, it was just overall a frustrating interaction. Edit: is the whole not closing thing unique to 401(k)s or is it true for other accounts as well? I guess I haven’t encountered it before Pipistrelle fucked around with this message at 22:27 on Feb 17, 2024 |
|
#
?
Feb 17, 2024 22:17
|
|
|
the chatbot was pasting the same line because that's all it can do, it was probably not an actual human or it may have been "human guided" where a single human handles 40 conversations at once by clicking canned responses for 99% of the questions and stuff this will get worse in the future as bots become cheaper and cheaper to run I apologize because the company I work for makes some of them, they're built into a lot of sales type cloud software now, they're really cheap to put together and train on your most frequent questions and interactions and then you only severely piss off like 5% of your customers which depending on industry and how much you pay the people in another country who used to handle your customer service, can actually be a huge improvement
|
|
#
?
Feb 17, 2024 23:51
|
|
|
I had two robo-advisor accounts with Fidelity (before I read this thread) and they treat them the same way -- "closed" just meant emptying them out, and I had to hide them in the UI but they're still there.
|
|
#
?
Feb 17, 2024 23:51
|
|
|
|
| # ? May 18, 2024 04:35 |
|
|
rational reminder has an episode making GBS threads all over ray dalio and bridgewater. it matches my priors, so it must be good https://www.youtube.com/watch?v=DfasR5p7YJI
|
|
#
?
Feb 18, 2024 20:49
|
|
