# RiverSource Annuity w/SecureSource rider?



## Laurie (Feb 16, 2012)

Awhile ago I signed up w/an Ameriprise financial advisor thru a Costco free dinner offer, even tho I promised myself I wouldn't (like a TS presentation). I never had any financial advisor so thought I'd give it a try, and have stayed there, tho not for my main retirement acct.

Last year, my current rep started pushing something called a RiverSource annuity w/a SecureSource rider - which theoretically guarantees value doesn't go down and guarantees minimum of 6% accumulation, or market increase, whichever is greater. This sounds too good to be true, who wouldn't want that?

She's also "suggesting" I move my whole retirement acct from the current co to Ameriprise (one option) and use some funds to purchase one. Or I could use a much smaller acct they already have and try one, I guess. Now she has called saying fees will go up after Feb 21, so could save some $ by deciding in the next 3 days.

I realize this is their proprietary product and this isn't unbiased advice. I've read thru the literature several times and even tho have a pretty good head for math, just don't get some of the jargon. I've also googled, looking for unbiased info and advice about this, haven't found anything very helpful.

I'm not yet retired but within a decade will be. I could probably leave $$ in this thing for 10 years, which is the guaranteed growth period in the accumulation state. 

I could give more details about what this is and why it looks so appealing, but first -anyone know what this is? Anyone have either this annuity, or an opinion about it? Are there better things to be looking at?


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## Passepartout (Feb 16, 2012)

I have nothing on this particular product. However, I DO own a couple of annuities and can think of a couple of things. (a) an annuity is an insurance product. Make sure the underlying policy is with a company with very strong ratings. (b) While it's nice to have the retirement income at a guaranteed level to cover your necessities, don't put all your eggs in one basket. Over time inflation will eat up the value of annuity payouts. (c) 6% of guaranteed appreciation on something sure isn't bad in today's market, but before buying, make sure you can get your assets out when/if other opportunities arise that you might want to take advantage of. Many people think that since the market collapse of 3ish years ago, there is pent-up demand and that there may well be a historic rise in equities. It would be a shame to be sitting on the sidelines locked into 6% when the general market is doing 20% and some select issues are doubling and more. 

I can't advise you either way, just be sure what ever you do works best for your own situation. The next 10 years before you retire are critical in how your nest is feathered for the long run.

Best wishes...

Jim


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## Laurie (Feb 16, 2012)

Passepartout said:


> It would be a shame to be sitting on the sidelines locked into 6% when the general market is doing 20% and some select issues are doubling and more.


That's why this one sounds too good to be true: as I said, this one theoretically guarantees value doesn't go down, and guarantees minimum of 6% accumulation (I was told after fees), or market increase (minus total fees which run around 2%), _whichever is greater_. 

But I don't think these are the payouts - this is during an accumulation period which raises the value of the contract. 

The ratings are pretty good. 

So if this is such a great thing, and this is a reputable company (at one time) connected with Costco, aren't there other savvy TUGgers who have been pitched as well? 

Thanks Jim, and anyone else who can help me figure this one out.


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## grandcanyon (Feb 16, 2012)

The way these typically work is they will severely limit the number of choices at what you can put your money into. They do this so you won't take any risks that could leave them on the hook for a large payout. Also, I think after the rider and other fees, you'll be looking at a 3% fee each year so your net gain will be about 3% best case.  I just looked and even in this horrible rate environment you can get 2.8% on a 10 yr CD. These products are usually stinkers designed to lock you into a long term commitment. Just do google search on ameriprise opinions and you'll see the company has a real bad name.


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## pwrshift (Feb 16, 2012)

The biggest problem people have today with retirement is that few have defined benefit pensions as corporations found there was less corp risk with defined contribution plans, which stink in comparison for the retiree.  Don't get sucked into buying anything you don't fully understand.  It sounds like the plan you've been told about has a huge commission payable to the sales rep and probably a 2.5% management expense ratio MER before you get your resulting 'income'.

Annuities are somewhat different in that they guarantee a monthly income for life much like a DB pension plan.  There are many variables...the best rate comes from a straight life which means it pays for life but if you die a year after buying it, nothing is left for your estate.  I had one priced for $500,000 that gave $30,000 a year for 26 guaranteed years or life of both/either spouses.  I think no more than 1/3 of your estate should go into an annuity with 1/3 in fixed income BBB bonds and higher, and 1/3 in dividend achiever equities like MCD, WMT, KO, KMB, DUK, etc.  Annuity earnings before retirement age generate taxation even if you don't take the money...so you might be best to wait to buy one and concentrate on building your 4O1k to the max until retirement.

It's all quite complicated...for now the 401k seems best with dividends reinvested to buy more stocks without commission.  You can do this yourself online.

Brian


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## zinger1457 (Feb 16, 2012)

There has been much discussion on this forum concerning Ameriprise investments, http://www.early-retirement.org/forums/.  Take a look and ask questions.  A red flag should have gone up when they told you to act before a certain date or rates would go up. The type of product they are trying to sell you is very complicated (try reading the prospectus) and pay a very high commission to the seller, you are right to be concerned.  The general consensus concerning Ameriprise on the forum I referenced is don't walk away, run, and bring your money with you!!!


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## amycurl (Feb 16, 2012)

I would seek out an independent Certified Financial Planner that is not connected to any one particular company, preferably one to whom you pay either a flat fee or a percentage of assets under management. They get paid the same whether you buy or don't buy a product or take or don't take any particular advice they give.  If you are not paying your advisor directly, they are being paid by the financial service company--therefore, they are being paid to push product.

Annuities are typically considered to be not the best investment vehicles. Consumer Reports has excellent advice re: financial instruments, and I would strongly suggest you review some of their research before moving any of your money.


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## Laurie (Feb 17, 2012)

zinger1457 said:


> There has been much discussion on this forum concerning Ameriprise investments, http://www.early-retirement.org/forums/.  Take a look and ask questions.  A red flag should have gone up when they told you to act before a certain date or rates would go up. The type of product they are trying to sell you is very complicated (try reading the prospectus) and pay a very high commission to the seller, you are right to be concerned.  The general consensus concerning Ameriprise on the forum I referenced is don't walk away, run, and bring your money with you!!!


This is a great website, thanks! 

There's not much info on the specific product, but lots of negatives about the company. My rep may have done herself a disservice, because I'll probably have to consider moving my acct away from the company entirely.

Here's my favorite post so far:
"Now that you have gotten your money from Ameriprise, it is time to start thinking about a nice vacation timeshare.  (whistling smilie)  "


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## judyjht (Feb 17, 2012)

I have always heard that the broker make huge commissions on annuities - that is why they push them!  Just a thought.


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