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Annuities - another (sad) story. (But working on a good ending)

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  • Annuities - another (sad) story. (But working on a good ending)

    I wish I had known about WCI sooner. Very informative. I recently retired after almost 40 years in healthcare (non-physician Lab/Path Director) and both children now MDs. To new physicians - please be very careful with Annuities. I have advised both my children NOT to buy any Annuity. I am now an avid learner of "how to manage and invest". Learning from my mistake. Better late than never.

    Long story short: I have two Variable Annuities (group groan...) sold to me by Financial Adviser who presented to our Physician & Management group at a Hospital Lunch and Learn. And who I subsequently engaged to advise me. Primarily because in her presentation, she introduced herself and her team as "Investment Specialists specifically serving Physicians and Healthcare professionals".

    First in 2002, 100K post-tax. 100% into a VA. I never took any distributions from this Annuity, and I eventually rolled it over in 2014 when I retired, into a 1035 exchange SPIA and LTC -different insurance company.

    Second in 2009 when I qualified for early retirement from TPMG (any KAISER alums out there?) - 100% of pension lump sum and 401K into another VA. I'm now in the last year of surrender period (2%) ending on 12/31/2017. Fortunately, I never took any distributions from this Annuity either (even though I wanted to, for a house remodel). And Earlier this year, I rolled over Entire surrender-free value into my Fidelity Roll-over IRA that I now manage (with the rest of my 401K and RSUs from my last two employers). I plan to roll over the remaining Annuity account as soon as surrender period is over. 12/31/2017. Sooner, if there is a way to avoid the 2% surrender fee.

    My Querry to the more savvy members out there:

    1. This adviser is a Fiduciary. Do you think she met the Fiduciary standard? I read about the 35% guideline for annuities, and have been reviewing SEC and FINRA website.

    2. Even at the lower "Suitability" standard ---- 100% into Variable Annuities?? No mention of Roth IRA (which I may have qualified for in the earlier years) nor back door Roth IRA conversions, which I definitely would have been interested in. Nor a brokerage account of Mutual Funds etc. that Is more Liquid (as in when I was doing a house remodel).

    3. I'm open to suggestions re: how to get out of this Annuity sooner. Seven more months to full surrender free, but I'm hating every minute of it. Any other items I should research? I'm aware Annuities have a place in a portfolio, but not 100%.

    4. And last but not least,  I just wonder how many more physicians and Medical professionals out there bought more annuities than needed, and are now locked into surrender requirements. Can't help but feel sad and mad. This Adviser team is pretty active in No. California and they specialise in presenting and being active in Physician/Medical/healthcare groups.

    Thank you.

  • #2
    How do you know she is a fiduciary? Just saying so doesn't make it true. That's why i always recommend using an advisor who is a member of one of the groups that refuse to admit anybody except true fiduciaries, such as NAPFA. Doesn't sound like fiduciary behavior to me but, without knowing more, it's difficult to determine.

    I'm sure some others here on the board would like to know the name of the group, which may help keep them from repeating your mistake. Nothing wrong with posting it. Also, check out the ADV. icymi, this blog post will help you navigate.

    You can get out any time, but you'll have to cough up the surrender fee if you can't wait it out for 7 more months. Don't allow your emotions to cause you to make a poor decision. And be wary of disguised offers to extend - very common at this stage of the lifecycle of an annuity.

    To answer your last question, you have a lot of company. There is a reason these organizations prey on medical professionals. The presentations are very slick and professional and, if you don't have an independent resource that can help you question what they offer (like this site), it's easy for people who are very intelligent - but not in finance - to believe they are making a smart decision.
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3
      Thanks Johanna, just read your attached blog article (very helpful) and found the ADV (which I have to finish reading), but to answer your question:

      I asked her last week (via email) if she was a Fiduciary, and she responded "yes".

      She has 2 disclosures on FINRA broker check, (just saw all this last week after I started reading WCI). One Regulatory and the other a Customer complaint.

      She is a ChFC, Kelly Kaneski of Kaneski and Associates, based out of Sacramento/Roseville CA. And she did talk to me about switching to yet another Annuity a few years back!

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      • #4
        Ad hominem attack removed by Moderator WCI.

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        • #5




          Thanks Johanna, just read your attached blog article (very helpful) and found the ADV (which I have to finish reading), but to answer your question:

          I asked her last week (via email) if she was a Fiduciary, and she responded “yes”.

          She has 2 disclosures on FINRA broker check, (just saw all this last week after I started reading WCI). One Regulatory and the other a Customer complaint.

          She is a ChFC, Kelly Kaneski of Kaneski and Associates, based out of Sacramento/Roseville CA. And she did talk to me about switching to yet another Annuity a few years back!
          Click to expand...


          You are on the right track. Better late than never - sounds trite but true in this case. I'm sure you are proud to have 2 children who are physicians and it has to be a huge comfort that you can guide them to not repeat your mistakes. No parent is perfect, but any good parent wants their child(ren) to get closer to perfection than they have reached.

          I don't see how Ms. Kaneski can qualify as a fiduciary. Recommend you ask her to confirm in writing, as we do for our clients and as any true "fee-only" advisor is happy to do. I believe NAPFA has a template you can use. This is typically when the "advisor" starts to backpedal.

          Good luck - you've only got 7 more months! Start searching for a true fee-only advisor in the meantime.
          Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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          • #6
            Ad hominem attack removed by Moderator WCI.

            I am new to WCI. Just interested if any possible ways to roll-over without surrender fees. And the first responder (Johanna) has answered that and has directed me to a couple of VERY HELPFUL sites that I have been reading.

            So, please don't worry about my "not winning". I am good. I have already WON what matters to me most:

            - Both children now MDs. Both Ivy League. No student debts (all paid). Both new homeowners.

            - Kid #1 finished with residency and two fellowships (Residency program Top 10 in the US). Joining a well established specialty group. Partner after one year.

            - Kid #2 about to start a surgery residency (also in a Top 10 program).

            - That said, to borrow from Physician On Fire, I was FI at 55, RE at 60.

            Gotta love California Real Estate. Was so busy working, raising kids, managing real estate investments, I did not read all the fine print in annuities sold to me by the wife of a physician where I was working. My bad.

            Ad hominem attack removed by Moderator WCI.⛵️⛵️⛵️?????????

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            • #7
              JOHANNA -

              Thank you again. I am feeling better about all this after reading up on what you sent me. The good news is that both Annuity accounts did grow. 6.1% and 5.5% annualized. (though not as much as my self-managed Fidelity accounts - Balanced portfolio and a growth portfolio).

              Fortunately I can wait out the 7 months, and have instructed NYL going forward that no one is authorized to touch my account except me. Now that I'm retired, have more time reading WCI, Bogleheads etc and meeting with my CPA who has an FA in their office. And as they say, a little knowledge is a dangerous thing, I can't wait to get the remaining accumulation value so I can manage and invest it myself. I'm finding that I enjoy doing my own investing. And I can see that WCI and Boggleheads are both very good resources.

              So thank you again Johanna, and yes, I am grateful that both kids are now both physicians, new homeowners, and student debts paid off. ???

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              • #8
                Ad hominem attack removed by Moderator WCI.

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                • #9
                  Ad hominem attack removed by Moderator WCI.

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                  • #10
                    I can piss better than both of you.

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                    • #11
                      DMFA - Right on!!! LOL. Thank you!! ??????

                      And I do mean that sincerely - that you are helping Med students with the learnings in your journey is truly commendable. I applaud you. In my old age, I have had the honor of seeing pre-meds, residents, fellows and new attendings reach their milestones. Some still reach out to me every now and then (my "work kids" that I have had the honor to give orientations and walk-throughs through the Lab and Path, patient service centers, call centers and Billing/marketing depts).

                      You are paying it forward. Thank you.

                      And your kid may be terminally cute. I recently had my first grand baby. Cute babies are dangerous. I have just re-allocated a chunk of my portfolio to help with his education, and if market cooperates, hopefully some left over for his first house down payment.

                      My very best to you and your future ???

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                      • #12
                        Ad hominem attack removed by Moderator WCI.
                        An alt-brown look at medicine, money, faith, & family
                        www.RogueDadMD.com

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                        • #13
                          Ad hominem attack removed by Moderator WCI.

                          Regardless, congratulations on a job well done with your finances (it doesn't sound like the annuities have really harmed you) and on your kids success.

                           
                          An alt-brown look at medicine, money, faith, & family
                          www.RogueDadMD.com

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                          • #14
                            Ad hominem attack removed by Moderator WCI.

                            And thank you for stating the positives, specially about my kids. I recently had my first grand kid, part of the reason why I want to get the rest of accumulation value out sooner than later - I just started his educational fund (not 529, but ROTH IRA conversion and I want to put more, now that I know how to do it)

                            best regards!

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                            • #15
                              Ad hominem attack removed by Moderator WCI.

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