N/A IRA's

flhrci

flhrci

Final Approach
Joined
Jan 26, 2007
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Groveport, OH
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David
So, today I called USAA to work on transferring my Thrift Savings Plan (like a 401k) and a real 401K, neither of which I can invest in any more, into an IRA. After asking a bunch of questions, the advisor came back with recommendations for an IRA annuity and a traditional IRA with brokerage account in which the funds would be in a life cycle investment strategy targeted at a 2040 retirement date to me moderately aggressive now and get more conservative as time goes on which is what my TSP is now.

I realize the annuity is basically an insurance policy with a guaranteed and fixed payout, but the risk is low and it gets a minimum 1% return on investment. The money is unfortunately untouchable for 1 year and up to 7 years is heavily penalized for withdrawls above 10%.

I have read about the upsides and downsides to the annuity. I did agree to it but have a while to fund it and then after that a period to decline it.

I am 43. The amount going into the annuity is about a 1/3 of the amount of the two accounts combined. I am also able to contribute more money any time and USAA gives me 3% match for the first year.

Not sure if the annuity is the right thing to do for a stable investment or not. USAA says these financial advisors do not get commission so in theory, this advice is not weighted by commission and should be better than a commissioned advisor would give.

Need advice.

David
 
Your basically in an insurance savings plan,very safe, take a good look at the commission schedule. Also look at penalty clause on withdrawal of the principal. At your age you may want to look at a more aggressive plan.
 
Ask how many non-USAA annuities they sell.

How can they be finding the very best deal for you, if they only sell one product/brand name?

I love USAA for lots of products but this isn't one of them.

-Skip
 
NO! There is no need for an annuity INSIDE an IRA, if that's what may happen.

I like USAA and have them for some insurance and a credit card. You need a good dose of Bob Brinker then you need to consolidate your IRA(s) at Vanguard.

Since the 'Capital Opportunity' fund is closed, check out the 'Explorer' fund, for that portion of your investment that will be in growth stocks.
 
frfly172 said:
Your basically in an insurance savings plan,very safe, take a good look at the commission schedule. Also look at penalty clause on withdrawal of the principal. At your age you may want to look at a more aggressive plan.
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There is no commission on it that I am aware of and since I am investing over $5000, the $2.50 monthly maintenance fee is waived.

David
 
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sourdough44 said:
NO! There is no need for an annuity INSIDE an IRA, if that's what may happen.

I like USAA and have them for some insurance and a credit card. You need a good dose of Bob Brinker then you need to consolidate your IRA(s) at Vanguard.

Since the 'Capital Opportunity' fund is closed, check out the 'Explorer' fund, for that portion of your investment that will be in growth stocks.
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1 401K is in Vanguard, but why stay there? I goggled Bob Brinker. Is he equivalent to Suze Orman? lol

David
 
Vanguard offers very low expense ratios. Fees make a huge difference to long-run investment returns. They also offer target date funds that invest in underlying index funds (which are low cost).
 
sounds liek the "advisor" is steering you toward the options with the most fees for him
 
JHW said:
sounds liek the "advisor" is steering you toward the options with the most fees for him
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Good possibility. The more I think about this annuity thing, it bothers me. So I am probaly going to call and canx that part of it tomorrow. Moving the TSP to an IRA somewhere is something I need to do so I can put more money in it. Having the brokerage portion added onto the account to me is neither good nor bad. It just means I can add stocks to the IRA myself.

David
 
How old are you? Consider a roth conversion. Not advocating you do it necessarily, just that you consider it for your circumstances whatever they are.
 
Why move from the TSP...almost no cost to it and no fees....I am planning on actually rolling a money into the TSP from a couple of retirement accounts...also no need for an Annuity inside an IRA its already tax deferred. I am a USAA member and in the business and even their annuities are full of expense.
 
Warlock said:
Why move from the TSP...almost no cost to it and no fees....I am planning on actually rolling a money into the TSP from a couple of retirement accounts...also no need for an Annuity inside an IRA its already tax deferred. I am a USAA member and in the business and even their annuities are full of expense.
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Well, I can't contribute to it. I suppose I could leave it alone and find another one to contribute to. I know it is a good fund. Would be nice to have everything under one roof so to speak for management and monitoring purposes also. That is another reason to move it from TSP.

David
 
You missed the statement as to how old you are. USAA is a good company but frankly they ARE an INSURANCE company at heart so I'm leary of their advice (frankly the further you get from their core product of Auto and Property insurance, the less they are distinguished as a company).

However, that being said, since interest rates are pretty depressed, a lot of people are moving into annuities for moneys that would have been the "bond" part of their portfolio. The risks/returns are comparable. The days of 5-6% returns on munis and 8% on private A or better bonds is pretty much gone for now.
 
Left a message for the USAA Financial advisor to get back to me about canx the annuity. Its in the process of being canx before he even called me back to confirm it. No hassles and he did not try to change my mind. He was curious as to why and I told him my misgivings about it and he understood and reiterated its my money and my decision. So I feel better now. That is why I prefer USAA.

I think I will rolled TSP and my other 401k into the new brokerage IRA so I have more flexibilty.

David
 
flhrci said:
Left a message for the USAA Financial advisor to get back to me about canx the annuity. Its in the process of being canx before he even called me back to confirm it. No hassles and he did not try to change my mind. He was curious as to why and I told him my misgivings about it and he understood and reiterated its my money and my decision. So I feel better now. That is why I prefer USAA.

I think I will rolled TSP and my other 401k into the new brokerage IRA so I have more flexibilty.

David
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If he says anything else he runs the risk of breaking the law. I wouldn't hold it to any particular good/bad customer service orientation. If you say "cancel" and he delays that process at all, he can get in some hot water if his delay causes you any problems.
 
denverpilot said:
If he says anything else he runs the risk of breaking the law. I wouldn't hold it to any particular good/bad customer service orientation. If you say "cancel" and he delays that process at all, he can get in some hot water if his delay causes you any problems.
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Ah. I did not know that. He made several disclosures that he can't advise on non-USAA products or do tax advice but I did not realize what you said. Oh well. I will choose to call it nice customer service, for once. Its rare any more.

David
 
USAA reps are polite and bend over backwards. Also being used to a mobile client base (military) they were way ahead of the game of handling things directly. I also liked it that I could read my VIN number in phonetics without missing a beat.

They do try to SELL you stuff (they are a private company after all). Sometimes it's helpful (they sold me an umbrella policy when I was making some other change), sometimes it's not.

Alas their general agency really let me down. Their preferred underwriter (USAIG) bailed from writing Navion policies and as an agency they weren't very good at finding me alternate coverage. I ended up going elsewhere.

My retirement stuff (as well as other stuff) is now with an independent broker. He was an Ameriprise guy but he split off to an independent operation when Amerprise started getting flakey. He's backed up by a "brokers broker" which is really on the ball and the transactions are handled NFS (a division of Fidelity).
 
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flhrci said:
Ah. I did not know that. He made several disclosures that he can't advise on non-USAA products or do tax advice but I did not realize what you said. Oh well. I will choose to call it nice customer service, for once. Its rare any more.

David
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Yeah no big deal. Just letting ya know. Doesn't mean there aren't shady financial folk who break the law every day.
 
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