Personal Investments • Help on leaving Ameriprise

Beyond “market value” and “value if surrendered”, does it also show “account value” (or something similar)? If so, what is the account value?

Value of your contract
Beginning value this year. 288k
Rider fees. -6k
Fixed and variable results. 45k
Total change in value. 39k
Ending value. 327k
Charges/fees if surrendered. 10 k
Value if surrendered 317k

This is what is on the statement.

Really appreciate the help!

Thank you for providing all of the details. This gives me a much more complete idea as to what kind of annuity you have. And I'm going to recommend that you follow your instincts and surrender the policy now.

But first, let's look at the annuity. Here are my observations -

--- This is a variable annuity - that is, one that is likely mostly invested in underlying equity mutual funds. I can tell that by the word "variable" in the third line of your equation, plus the size of last year's return.

--- You paid rider fees of $6k. Compared to the beginning value of $288k, this is a rider fee alone of 2.1% per year.

--- It's almost certain that there are additional fees on the annuity that weren't broken out separately, and were netted against the "fixed and variable results" line of your statement. Typical variable annuities have a "mortality and expense" (or "administration") fee of about 1% per year. In addition, the mutual funds underlying the variable annuity are often about 1% per year more costly than equivalent low-cost mutual funds outside the variable annuity. So, this is 2% or so more per year in fees.

--- Combining the fees from the two prior paragraphs gives you a total fee of about 4% per year. Applied to your $288k initial account value, this annuity is costing you roughly $11,500 per year in fees.

As you correctly guessed, it's worth it to incur a one-time $10k surrender charge in order to avoid $11.5k annual fees for the next two years. So I'd surrender the annuity - and get the proceeds (along with the rest of your account) away from the clutches of Amerprise.

Post back if you have questions.

Statistics: Posted by Stinky — Sun Dec 08, 2024 7:19 am — Replies 8 — Views 489

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