To begin, let me apologize for my long absence from this blog. I have been very busy making money, and today took the day off of handling my own affairs to assist my mother with some retirement planning. Which brings me to the purpose of this post.
The truth is, when I woke up this morning I had no intention of posting to the blog, but much to my dismay, I found some interesting issues when working with my mother this morning.
My mother is currently retired, and like many other members of the work force has amassed a great number of miscellaneous retirement accounts from various jobs and time periods throughout her life. For the past several months, we have been inventorying these plans, and then making decisions about what to do with them. Usually it goes this way: We find a plan of hers or of my fathers, decide whether to cash it in or keep it, then, depending on what we did in the previous step, either grab the windfall and buy something nice, or decide what we will buy when we eventually do get our grubby hands on that cash! Just kidding, but I couldn’t resist the humor, sorry, back to business!
I should mention that this has all been complicated by my father's sudden death at what would have been the end of his working years, and yes that's right, mom wasn't totally up to date with what was around to feed everyone for the next several decades.
Anyway, two of these plans are annuities with very small values, about $10,000 and $20,000 each, but they still must be dealt with appropriately. As all my readers know, I am not a big or little fan of annuities, especially as a tool for long-term investment, but we must play the cards as they are dealt. So with the interest of saving fees and reducing expenses in mind, I directed my mother to call the annuity companies and find out what fees and cost are involved should we decide to roll these funds over. Upon calling, she discovered that it was going to cost her almost $2,000 to roll these deferred variable annuities over into a regular IRA with a different investment company. Upon hearing this predictable message, I decided to call myself. First, I made a list of questions, one of which was "do these fees apply if my mother makes her withdraw/rollover after reaching age 59 1/2?" The larger fund answered "no," but only after asking me a variety of questions (one of which was "what is your mother's birth date") and then telling me only that it would cost about $1,500 to roll that account over into an IRA "as of yesterday's prices." I only found out about the waiver of fees at age 59 1/2 because I asked specifically if there was one!
Taken alone this could be seen a mere oversite by the customer service representative I spoke with on the phone, but I had the exact same experience when I called about the smaller plan that is with a different company. (Side note: She hasn't been in this plan for very long, so she must still wait 2 more years to avoid any fees, but again, they did not volunteer this information). I only learned she would not incurr any withdraw fees after reaching age 59 1/2 (and having 5 years in the plan) after asking that exact question. Both companies seemed content to let me make the rollover/withdraw and incurr the fees, even though my mother reaches age 59 1/2 in 6 weeks! So all I need to know now are the questions that I don't know to ask!
