Marcie is divorced and is the 38-year-old mother of one child. She really has to scrape to get by on the $15,000 or so she makes a year carrying plumbing supplies and gluing plastic pipe. Like so many these days, she wandered into the bank looking for investment advice when she got her meager divorce settlement (the $10K) that represented every nickel she had, if you don’t count next week’s paycheck.
Instead of putting it in a savings account where it belonged, the bank rep took the far more profitable route of selling Marcie a variable annuity, which promptly plunged in value.
After surrender charges, Marcie lost nearly half her money.
At least this 38-year-old avoided (because of the loss when she surrendered) the 10% tax penalty that would have applied for 21 years until Marcie broke 59 ½ on the product the bank rep so carefully chose for her.
The preceding story is based on an actual situation and was shared by an investor we met in our professional practice. The names and non-material details have been changed to protect identities. The essential facts dealing with product representations and sales practices have been faithfully recorded.
This case history may amaze, amuse, and incite you. It may also inspire you to take action if you had a similar experience.
Most importantly, this case study may help you to realize that you are not alone, if you feel that you may have been subject to less-than-forthcoming annuities sales tactics. From the high number of cases we’ve seen like this, we can only infer this kind of monkey business is too common where these products are concerned.
Camarda offers free Portfolio Stress Tests which can include annuity cost/benefit analysis and rescue plans. To request one just click here – no cost or obligation.
