Help Me Convince Her! — "Advisor" Rolling 401(k) into Variable Annuity

Home Retirement Accounts Help Me Convince Her! — "Advisor" Rolling 401(k) into Variable Annuity

  • Avatar mamaham 
    Status: Spouse
    Posts: 77
    Joined: 12/08/2016

    “This is plain stupidity and a money grab. When I rolled over a 401K from a previous employer I just opened a roll over IRA at Vanguard. Since the funds were not available at Vanguard I just sold the 401K funds and had them transfer to Vanguard to be within 60 day rule. I then got Vanguard index Admiral funds and have forgotten about it. Let it grow slowly.”



    I did the same thing, and now I cannot contribute to backdoor roth.  Just be aware that if you do this, then the backdoor roth option is closed.  I was not aware of that when I rolled over the funds.

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    That’s not the end of the world, not being able to do the backdoor roth. What is the end of the world is a partner in life who makes foolish financial decisions and does not listen to reason. Do you think that will change when you get married? Really?

    I am semi-serious when I say that this is grounds for ending the relationship.

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    agreed.  money definitely needs to be discussed thoroughly in premarital counseling.  if the parties are not on the same page, then some serious discussion/action should be taken.  Dave Ramsey always quotes money as the number one reason for divorce.  I do not have the evidence to back that up, but many people quote that as the number one reason….

    #49497 Reply
    Avatar Penguin_MD 
    Status: Physician
    Posts: 7
    Joined: 06/02/2017

    Thank you all for your timely help! We have abandoned that planned process. Fortunately I was able to intervene at the last minute, since she asked me to review this piece of paper so she could sign it.

    We have discussed finances extensively prior. I honestly didn’t know this was in the works, and she naively had enough “faith” in this individual not to pull this stunt. Frankly this is a situation where, as a poster previously noted, you would expect someone in thia social circle not to screw her. Instead this is the exact type of person using that social circle to abuse people with good salaries and minimal investment knowledge.

    I look forward to in future months explaining our situation much more closely…Incomes, student debt, existing retirement and investment on both sides and walking through the process with you.

    Thanks again for saving the day.

    PhysicianOnFIRE PhysicianOnFIRE 
    Status: Physician
    Posts: 1545
    Joined: 01/08/2016
    Cited Advantages – Future annuitization options, lower up front sales charge than brokerage options

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    Well, yeah, except for the thousands of no-load mutual funds and ETFs with lower ongoing fees sold by trustworthy companies like Vanguard, Fidelity, and Schwab.

    Has she read this forum thread yet? If not, do you plan to show it to her?

    40-something anesthesiologist and personal finance blogger @ [Part of the WCI Network] Find me on Twitter: @physicianonfire

    FIRE. Financial Independence. Retire Early.

    #49546 Reply
    Liked by Hank
    Avatar adventure 
    Status: Spouse
    Posts: 1207
    Joined: 10/24/2016

    Could you show her a difference of the compound growth of a portfolio with a 4.5% load vs one without it?

    I just did the back of a napkin calculation on a $100k portfolio at 7% vs $95.5k at 5.78%. Over 20 years that’s $100k difference! ($403k vs $302). Does she really want to pay this guy $100k or similar versus whatever the initial ammount is of her money?
    If you have the actual amount we could calculate the difference for you.

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    Data. That’s key.

    See attached file for a comparison. Update the #’s in the yellow cells. Initial investment, projected growth, and annual contribution.

    Pretty steep loss for taking the more expensive option. As in… delaying retirement losses.

    You must be logged in to view attached files.
    #49795 Reply
    Liked by StateOfMyHead
    Avatar High Income Parent 
    Status: Physician
    Posts: 37
    Joined: 03/26/2017

    Glad to hear the news. Keep up the good work.

    Children are not a distraction from more important work. They are the most important work. | | C. S. Lewis

    #50351 Reply
    Arkad Arkad 
    Status: Physician
    Posts: 114
    Joined: 07/27/2016

    Ask her if she understands what his commission is for this product.  If she can’t see the problem then, the other numbers may not have much meaning to her.

    #50352 Reply
    Vagabond MD Vagabond MD 
    Status: Physician
    Posts: 3486
    Joined: 01/21/2016

    I wonder whatever happened to this couple. It happens a lot. People come and ask advice, we give it, and we never hear back. It’s kind of like being a radiologist in 2019. 😉

    #205622 Reply
    Avatar bean1970 
    Status: Physician
    Posts: 570
    Joined: 07/12/2017

    i’m not saying you should do this, but just to question the FA’s fees, pull up Fidelity’s Personal Variable Annuity.  You could pull up Vanguard’s as well, but Fidelity has the cheapest out there. What is being proposed to you is $$$$$ to the benefit of the FA, not you.

    i just realized this was an old post…..

    #205633 Reply
    Avatar Peds 
    Status: Physician
    Posts: 4695
    Joined: 01/08/2016
    i just realized this was an old post…..

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    #205635 Reply
    CordMcNally CordMcNally 
    Status: Physician
    Posts: 3059
    Joined: 01/03/2017

    My guess is that they had a discussion and the fiancé got upset. She then ran off with the financial advisor and now the OP is closer than ever to FI.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #205639 Reply

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