new investment from structured capital strategies
took out a structured capital strategies in july of 2017. this was a s&p 500 5 year 20% buffer. july of 2022 i’ll be talking to my agent (prudential) about a different investment. i’m 75 now and have been getting a rmd from this current investment. this investment is a 16B ira. i would like to get something i can understand better than this one. just tossing a few things around for now. was wondering if this structured investment could be transfered into a I bond account. I bonds seem to have a good interest rate right now. i’m thinking that the rmd would be a problem but don’t know for sure. would hate to get a tax bill if i did away with the ira. don’t mind dealing with prudential, been with them since 1992. any thoughts or better ideas? thanks
Permalink Submitted by Alan - IRA critic on Mon, 2022-05-02 15:28
Other than a fixed rate annuity, investments sold by insurance companies are going to be complex to understand and a high commission will be deducted from your IRA balance. If you want a wide choice of simple to understand investment options with very low expenses, you should have the proceeds of this annuity directly transferred to a brokerage firm like Fidelity, Vanguard, or Schwab in July. You can even buy brokered FDIC insured CDs from these firms and the interest rates offered should be better by July. There is no risk for these CDs and no hidden expenses or commissions. Of course, you could also continue with an index fund or ETF if and when you want to without commissions and with near 0 expenses. Of course, it is also easy to split up your168k IRA into different investments. A direct transfer to another firm is not a distribution and you do not get a 1099R. If you are interested, initiate the transfer from the new IRA custodian, but start at least a month before the current investment matures. Finally, expect resistance and maybe a hard sell from your current Pru agent.
Permalink Submitted by charles welch on Mon, 2022-05-02 22:23
thank you very much for your reply. won’t need these funds unless the bottom falls out. would like something easy to understand with decent returns and access to like i said if the bottom falls out.