Ignore Harry's advice at your own risk
DEAR HARRY: Ignoring your sage advice about annuities, I allowed an agent to sweet-talk me into a 10-year annuity. He said a lot of wonderful things about this contract, including a statement that the company would split earnings with me on the basis of 53 percent for the insurance company and 47 percent for me. After my first year of participation, I discovered that the company would determine the actual percentages to be applied each year. To my dismay, the first-year split was 70 percent for them and only 30 percent for me. I was told that I can withdraw 10 percent each year without an early-withdrawal penalty. How can I get myself out of this mess and into something else without taking a huge penalty? I'm tired of these insurance toads taking advantage of us senior citizens!
WHAT HARRY SAYS: You must determine how much of a penalty they will exact for a total withdrawal and cancellation. That may be enough to cause you to want to consider staying. However, my vote is to take the hit and put your money into something better. That "something better" is to put half of the proceeds into bank CDs for three and six months, with the other half going to index mutual funds. Speak to the folks at Fidelity, T. Rowe Price and Vanguard. All are no-load funds. Please, dear readers, annuities are good only under special circumstances. Avoid them unless you have independent advice to the contrary.
Email Harry Gross at harrygrossDN@gmail.com, or
write to him at Daily News, 801 Market St., Philadelphia, PA 19107.
Harry urges all his readers to give blood. Contact the American Red Cross at 800-Red Cross.