[USER]

Interested in thoughts on best way to invest $560K, currently sitting in Vanguard rollover IRA MMF sweep acct, making 5.27%, but will go down when Fed lowers rates.

My financial planner suggests putting approx $200K in Guarantee Annuity with a 5-yr lock curr @ 4.75%.

[Frank]

What is it for? Endlessly reinvesting money in short-term instruments over and over again usually makes no sense at all.

And that is especially true in an IRA, which should be invested for the longer term.

What kind of goofy financial plan is this?

[Chris]

You mean your insurance agent recommended

[Ron]

No to the annuity.
Yes to some combination of VTI and a high yield savings, like your sweep account.

Tilt more towards VTI depending on how much cash reserve you have already and assuming you don’t need to touch the money for many years.

Invest the lump sum in VTI now.

Don’t try to time the market.

[Rick]

You should share your goals wants and needs for the money. Otherwise you get dart throwing at best.

[Amy]

What will this money be used for—retirement, house down payment? When do you expect to spend the money—in a few months, not for many years?

Finally, what does the rest of your financial picture look like—debt, IRA, 401k, brokerage, etc.

[Justin]

Your age? Time frame for needing the money?
First thought is your financial planner is looking at his commission with an annuity.

[Scott]

What is the money for and when do you need it? If you have a 7th grader and the fund is to pay for college then yes maybe a 5 year MYGA

(which is what this sounds like) could work but read the fine print.

[Phil]

No. No.
Do not agree to a product being sold to you without doing some more research.

Then say no.

It’s very unlikely an insurance product being sold to you is beneficial for you.

I should acknowledge it is possible an annuity product could be a help in your situation which I don’t know anything about. (doubt it).

[Michael]

An annuity is a legally binding contract. It is different than an investment.

Not advice, just data. Good luck.

[Grant]

Pass on ANY Annuity unless it helps you sleep at night. Without knowing your age and your retirement goals, it is hard to say, but VOO is always a solid choice for growth.

With bonds looking to take off, BND might make sense for you…

[Amanda]

Fire your “planner” immediately. Terrible advice. He is trying to make money for himself not for you.

Any advisor should have your best interest in mind.

[Author]

Posts