Similar service to "Annuity Review" from Macro consulting?

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Raffert
Posts: 30
Joined: Tue Jun 02, 2020 10:36 am

Similar service to "Annuity Review" from Macro consulting?

Post by Raffert »

I'm a loooooong time lurker, but first time questioner:

I'm searching for a service which will review my in-laws' four variable annuities purchased in the early 2000s (yes they have asked for my help with this). I was planning on using Macro consulting's "Annuity Review" process based on all the experiences I've read about here through the years and the referral in Jane Bryant Quinn's book. I'd engaged with them a couple of months ago but wasn't able to get the required documents to initiate the review until recently. Unfortunately in interim Macro has merged with another company and I was told they will no longer be offering this service.

Does anyone know of a comparable service? "Stan the annuity man" and "Annuity gator" (amongst others) have been mentioned in previous threads but they seem to be more focussed on selling new annuities rather than reviewing old one (please correct me if I am wrong).

For background: My in-laws are in their late 70s and are quite comfortable living on their pension and SS, so they've just been rolling with the "status quo" for years. These 4 annuities were sold as "investments" (insert pained eyeroll here) and make up about 2/3 of their mid-6 figure portfolio, but the details of the annuities have always been a mystery to them. Honestly despite reading one of the 80 page contracts, I'm comfortable saying that I don't understand them intricacies of them either. They're held in IRAs and none of them are annuitized (just taking RMDs), so they have options to cash out, hold them, or annuitize - but the specific $ amounts/riders/clauses etc might as well be greek.

This "Annuity Review" service sounded exactly what they needed: a low cost review which would explain (in English) their annuities and outline their choices going forward - so no I'm looking for an alternative. I've looked into some local fee-only hourly CFPs, but most are either a) quite a bit more expensive than Macro's defunct service, or b) un-interested in this minor review if it didn't include more substantial business (A full blown financial plan or moving all assets into their AUM services). They're not interested in anything other than understanding their annuities.

TLDR: Does anyone know of a firm that will provide an "Annuity Review" similar to Macro Consulting's former service? Many thanks!

Raffert

P.S. I know that there are annuity experts here, and that I could ask for help by providing more detail. However, I honestly don't think that I understand these contracts well enough to ask the appropriate questions or even get the details right! hence my quest for a review service.
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Stinky
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Joined: Mon Jun 12, 2017 11:38 am
Location: Sweet Home Alabama

Re: Similar service to "Annuity Review" from Macro consulting?

Post by Stinky »

Welcome to the Forum!

First, I do not know of a commercial service to help you and your parents out.

It sounds like your parents have four IRA annuities totaling $300-$400k, all purchased about 20 years ago. They should be well out of the surrender charge period, so they could be surrendered now for their account value and rolled into a regular IRA.

The annuity policy charges and excess mutual fund fees are probably in the range of 2% per year, every year. In addition, the policies might have additional riders with charges. There could be no riders; or there could be riders with an additional 1-2% charges per year.

Life insurers underpriced many of their benefits like withdrawal and income benefits on variable annuities issued before 2008-09. So, if your parents’ policies had such riders, it may be that it would make sense to exercise the riders.

If your parents’ policies have such riders, I’d encourage them to call up the insurance company (hopefully with you also on the line). Tell the insurance company that they want to understand all of the options available under their policies right now - surrender value, monthly income payable under any “withdrawal” or “income” riders, the amount of death benefit in excess of the account value (if any), etc. Some of these amounts might have been on the most recent annual report on the annuities.

Also, some VA policies issued years ago have high interest rates (like 4%) on the fixed account. You might ask about that, and also ask what policy and rider charges would apply to funds in the fixed account.

If you want to make that call and post the numbers, we can likely help you to understand the options.

It may very well make sense for your parents to do something with the annuities now. Those annual fees are like termites, eating away at the account value and it’s growth every year.

Post back with questions.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Topic Author
Raffert
Posts: 30
Joined: Tue Jun 02, 2020 10:36 am

Re: Similar service to "Annuity Review" from Macro consulting?

Post by Raffert »

Thank you Stinky,

This is why I love this forum: practical, no-nonsense advice. It's very much appreciated.

I probably should have already tackled this head-on and called the insurance companies to ask them what the options for these annuities were. I had just assumed that the insurance co would make it impossible for us to understand, or would only present the least favorable options. I am certain that they are being clobbered by fees, and I assume the insurance company wants to keep it that way, so assumed I couldn't get reasonable info from them. Why would they helps us? This is why I was hoping to engage the Annuity Review service... to cut through the BS (am I allowed to say BS? Apologies to the Mods if not)

Now I'm smacking my head repeatedly - calling the insurance companies is the first step. If I had called them already I'd at least be able to ask an intelligent question to the helpful folks here.

In other words, I was probably taking the 2nd step (find professional advise) before I took the 1st step (evaluate and decide if we need it). I will take the 1st step presently, and once I find out some info I will return back with questions.

Thank you!
Raff
User avatar
Stinky
Posts: 14158
Joined: Mon Jun 12, 2017 11:38 am
Location: Sweet Home Alabama

Re: Similar service to "Annuity Review" from Macro consulting?

Post by Stinky »

Raffert wrote: Tue Jul 27, 2021 11:09 pm I probably should have already tackled this head-on and called the insurance companies to ask them what the options for these annuities were. I had just assumed that the insurance co would make it impossible for us to understand, or would only present the least favorable options. I am certain that they are being clobbered by fees, and I assume the insurance company wants to keep it that way, so assumed I couldn't get reasonable info from them. Why would they helps us? This is why I was hoping to engage the Annuity Review service... to cut through the BS (am I allowed to say BS? Apologies to the Mods if not)

Now I'm smacking my head repeatedly - calling the insurance companies is the first step. If I had called them already I'd at least be able to ask an intelligent question to the helpful folks here.

In other words, I was probably taking the 2nd step (find professional advise) before I took the 1st step (evaluate and decide if we need it). I will take the 1st step presently, and once I find out some info I will return back with questions.
Yes, on the one hand the insurance company “wants” the annuity to stay in force.

On the other hand, the customer service reps are charged to provide info to the customer. If the policies have various riders and options, I’d expect that those would be explained to them (and to you if they give permission).

There might be a lot of information on the most recent annual statements for each policy, if your parents retained those.

Best to you. Post back when you have questions.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
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