Should I take lump sum annuity?

wildgift · 11-25-2008, 09:23 AM

My father left me an annuity sold by Genworth, which is presently tanking. I was thinking of bailing out with the $$ with haste, but then web research turned up messages (on WSJ) saying two interesting things.

1. Genworth is the holding company of Genworth Life and Annuity, which is a separate company that sold my dad this annuity. Supposedly, these deposits are insured by the state, but I haven't found out the specifics.

2. Genworth Life and Annuity is still AA rated.

It seems like Genworth is tanking because it had exposure to the real estate market, and also exposure to the commercial paper market, from which it was recently barred because its rating was downgraded. So now, the stock is looking like it's going into the toilet, into BK territory.

On the other hand, it looks like they have cash flow, and the life and annuity products seem to be fairly stable businesses. BUT, I really know nothing about this investment.

Does anyone have a pointer about where to start doing some research to figure out if I should pull the money out?

khorrell · 11-25-2008, 10:41 AM

Annuities are tricky, and I don't know as much as I'd like. I think you probably need to get a professional to check out the details: how long, how much, is it variable, etc. Ideally, the company should be able to answer all these questions for you, but you might need to hire someone. Depending on how much money you're talking about, it may or may not be worth your time and money.

Good luck!

wildgift · 11-25-2008, 01:19 PM

It's around 25k. Not nothing, but not a lot.... but after doing some reading, it's possible there are taxes to pay on it. It would be bad if I took the money and it got taxed. I'm not in a high bracket, but it's high enough that the hit would not be good.

I guess this is a tip to the older folks here. Take distributions on any annuities and enjoy them when you're alive and your income is low. Don't leave them to your adult children :-)

11-25-2008, 09:23 AM	#1
wildgift Member Join Date: Feb 2008 Posts: 54 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (10)	Should I take lump sum annuity? My father left me an annuity sold by Genworth, which is presently tanking. I was thinking of bailing out with the $$ with haste, but then web research turned up messages (on WSJ) saying two interesting things. 1. Genworth is the holding company of Genworth Life and Annuity, which is a separate company that sold my dad this annuity. Supposedly, these deposits are insured by the state, but I haven't found out the specifics. 2. Genworth Life and Annuity is still AA rated. It seems like Genworth is tanking because it had exposure to the real estate market, and also exposure to the commercial paper market, from which it was recently barred because its rating was downgraded. So now, the stock is looking like it's going into the toilet, into BK territory. On the other hand, it looks like they have cash flow, and the life and annuity products seem to be fairly stable businesses. BUT, I really know nothing about this investment. Does anyone have a pointer about where to start doing some research to figure out if I should pull the money out?

11-25-2008, 10:41 AM	#2
khorrell Senior Member Join Date: Jan 2008 Location: near Washington DC Posts: 610 Thanks: 0 Thanked 1 Time in 1 Post Reputation: (84)	Annuities are tricky, and I don't know as much as I'd like. I think you probably need to get a professional to check out the details: how long, how much, is it variable, etc. Ideally, the company should be able to answer all these questions for you, but you might need to hire someone. Depending on how much money you're talking about, it may or may not be worth your time and money. Good luck! __________________ The Paycheck Chronicles "helping military families make the most of their paychecks"

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11-25-2008, 01:19 PM	#3
wildgift Member Join Date: Feb 2008 Posts: 54 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (10)	It's around 25k. Not nothing, but not a lot.... but after doing some reading, it's possible there are taxes to pay on it. It would be bad if I took the money and it got taxed. I'm not in a high bracket, but it's high enough that the hit would not be good. I guess this is a tip to the older folks here. Take distributions on any annuities and enjoy them when you're alive and your income is low. Don't leave them to your adult children :-)