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Conference nyoss1::market_investing

Title:Market Investing
Moderator:2155::michaud
Created:Thu Jan 23 1992
Last Modified:Thu Jun 05 1997
Last Successful Update:Fri Jun 06 1997
Number of topics:1060
Total number of notes:10477

45.0. "Annuities" by ALBANY::MCWILLIAMS (Improvise if you have to ...) Thu Feb 06 1992 13:39

    There's been a lot of clamor recently in the WSJ and elsewhere about
    possible changes in the rules governing tax-deferred annuities. Many
    people believe that if you want such an investment, you better make it
    soon, before the laws change.
    
    Has anyone been annuity shopping? What's it look like out there?
    
    My wife currently has an annuity through an insurance company that just cut
    its yield to 5.5% (from 7.5% last year). We may be looking for a place
    to move this investment, especially since Weiss rates the insurer (John
    Alden) a "C-".
    
    Brian
T.RTitleUserPersonal
Name		DateLines
45.1SMA variable annuityDEALIN::AXELMike AxelThu Feb 06 1992 14:5018
    We have been looking at a tax-deferred variable annuity from State
    Mutual Assurance (SMA) of Worcester, MA. This plan lets you put your
    money in up to nine investments including 4 Fidelity mutual funds,
    some SMA managed mutual funds and a fixed rate account. You are allowed
    a certain number of transfers between the funds annually without 
    a charge. SMA also has a variable life insurance product with the
    same investment options. The life insurance has the advantage that
    you can access your money in 2 ways before age 59 1/2 without IRS
    penalty and surrender charges - You can withdraw money you paid in
    as long as the minimum amount to cover the insurance remains or you
    can borrow against the cash value at 8% with the amount you borrow
    being put into a 6% fixed account so you're effectively borrowing at
    2%.
    
    Of course you have to purchase these products from an SMA agent (in
    this case a financial planner who is offering us "free" advice).
    
    Mike
45.2SUBSYS::GANESHGaneshFri Feb 07 1992 05:2120
    Re. the base note
    
    Good thing you looked up the Weiss report on the insurance company.
    Except Weiss, practically every other rating agency (including 
    Duff & Phelps, Standard & Poor's and Moody) gets paid by the
    insurance company to do the rating. This latter makes for some
    very objective analysis, I'm sure :-)
    
    Weiss has often been accused (mainly by the insurance industry,
    of course) of making overly severe judgements - he claims that 
    his analysis considers the possibility of bond defaults in a 
    severe, extended downturn. 
    
    My opinion is, better safe than sorry in this environment. Don't
    settle for anything but the highest couple of ratings from Weiss, 
    unless it's a variable annuity and you get to decide where the money
    is invested.
    
    Ganesh.
45.3"Variable" annuities, etc.ALBANY::MCWILLIAMSImprovise if you have to ...Fri Feb 07 1992 11:2418
    RE. .2:
    
    I actually called Weiss and got their rating for the insurer over the
    phone. Think it cost $15. A detailed written report was available for
    ~$50 I think. 
    
    RE. "Variable annuities"
    
    Does anyone in here have one? How are they different than an IRA
    (besides the unlimited contribution vs. $2,000 annual max.)?
    
    Also, can you "roll" an annuity -- in this case a single premium type
    -- into an IRA w/o paying the IRS anything? (I believe we'll escape
    "surrender" charges from the insurer.)
    
    Thanks,
    
    Brian
45.4You can't roll it into an IRACSC32::B_HIBBERTWhen in doubt, PANICFri Feb 07 1992 17:419
    No, you can't roll an anuity into an IRA.  There is no limit on the 
amount you can put into the anuity.  If they allowed this type of rollover
then there would effectively be no limit on IRA contributions.

    You can roll the anuity into another anuity offered by a different
company.

Brian