We’ll close with this sad and amusing story, which kind of sums up the modern state of the annuities minefield.
Walter is a soft-spoken 83-year-old who popped up at one of our workshops. He said he came in so we could tell him just “what in the dickens I have.”
It seems Walter had gone into a branch of a huge, national bank looking to put $100K or so (most of his money) back into a CD like he had done most of his life. After all, banks are where they have bank accounts, right?
Of course, once we got the paperwork out of the bewildered Walter’s shaking hands, we were not surprised to tell him that he owned an annuity with a seven-year surrender period.
Walter will be 90 when the surrender charge goes away, but the contract and/or applicable law may force him to annuitize before then, forever locking his principal away from him and his family.
And if he dies before all his money’s been paid out, well, of course, the insurance company gets to keep that.
It’s in the contract.
