To start, I admit I do not know enough, nor have the temerity to learn enough, about personal financial matters as I should. I pretty much trust our advisor to do the right thing for us.
That being said, I recently received a letter from Ameriprise/RiverSource Annuities, and read it just tonight. It is titled "Update to your annuity contract," and something seemingly unbelievable caught my eye:
"We are changing your Annuitization Start Date to a later date than what appears on your annuity contract. Your new Annuitization Start Date is now your 95th birthday or the annuity contract's 10-year anniversary, whichever is later." [bold text is theirs]
Well, that information gave me a big huge WTF??? So is Ameriprise/RiverSource Annuities saying that they will not begin paying annuity payments until the holder turns 95??? Not cool, considering that is well over half a century away!
Someone please clear this up for me, this CANNOT be what it means, and if it is, this is INSANE! I don't think I have ever personally known someone who lived to 95!
33% of the US can expect to live to 95 per Amerprise's own website. Each annuity is unique and you would need to call to clarify the letter however I would take the letter to mean exactly what it says - you must be 95 years old and had the annunity for a min. of 10 years for it to pay out.
FichteScholar
Member
posted: Jul. 30, 2010 @ 9:38p
Highly improbable... the old 95 could be the new 75!
PhrugalPhan
Thrifty Member
posted: Jul. 30, 2010 @ 9:42p
judyneric said: "We are changing your Annuitization Start Date to a later date than what appears on your annuity contract. Your new Annuitization Start Date is now your 95th birthday or the annuity contract's 10-year anniversary, whichever is later." [bold text is theirs]I admit I don't know much about annuities (nor do I ever plan to), but if you have an annuity contract, how can they unilaterally change the contract after it has been set up? I mean, why wouldn't every company do this if it was allowed? They could all just keep changing the contract so you never get any money and just keep the money to themselves.
dshibb
Senior Member - 2K
posted: Jul. 30, 2010 @ 9:53p
PhrugalPhan said: judyneric said: "We are changing your Annuitization Start Date to a later date than what appears on your annuity contract. Your new Annuitization Start Date is now your 95th birthday or the annuity contract's 10-year anniversary, whichever is later." [bold text is theirs]I admit I don't know much about annuities (nor do I ever plan to), but if you have an annuity contract, how can they unilaterally change the contract after it has been set up? I mean, why wouldn't every company do this if it was allowed? They could all just keep changing the contract so you never get any money and just keep the money to themselves.
They can't. That's why its called a contract.
PhrugalPhan
Thrifty Member
posted: Jul. 30, 2010 @ 10:27p
dshibb said: PhrugalPhan said: judyneric said: "We are changing your Annuitization Start Date to a later date than what appears on your annuity contract. Your new Annuitization Start Date is now your 95th birthday or the annuity contract's 10-year anniversary, whichever is later." [bold text is theirs]I admit I don't know much about annuities (nor do I ever plan to), but if you have an annuity contract, how can they unilaterally change the contract after it has been set up? I mean, why wouldn't every company do this if it was allowed? They could all just keep changing the contract so you never get any money and just keep the money to themselves.
They can't. That's why its called a contract.I understand that, but this is what the letter seems to be saying. So the letter is wrong, misunderstood, or option "C" - they actually can change it?
dshibb
Senior Member - 2K
posted: Jul. 30, 2010 @ 11:14p
I would be willing to take bets that either this is a mix up or wouldn't hold up in court if it wasn't.
barrister68
Member
posted: Jul. 31, 2010 @ 7:57a
Do you have a deferred annuity? Chances are that YOU have the option of changing the annuity payout date. Read your contract or contact the company directly to ask them. Age 95 may just be the default date set by the company.
judyneric
Cranky Member
posted: Jul. 31, 2010 @ 11:50a
thanks to everyone for all the input.
we'll definitely be looking at the original contract, and calling them monday.
InsuranceExpert
Senior Member - 3K
posted: Jul. 31, 2010 @ 1:27p
judyneric said: To start, I admit I do not know enough, nor have the temerity to learn enough, about personal financial matters as I should. I pretty much trust our advisor to do the right thing for us.
That being said, I recently received a letter from Ameriprise/RiverSource Annuities, and read it just tonight. It is titled "Update to your annuity contract," and something seemingly unbelievable caught my eye:
"We are changing your Annuitization Start Date to a later date than what appears on your annuity contract. Your new Annuitization Start Date is now your 95th birthday or the annuity contract's 10-year anniversary, whichever is later." [bold text is theirs]
Well, that information gave me a big huge WTF??? So is Ameriprise/RiverSource Annuities saying that they will not begin paying annuity payments until the holder turns 95??? Not cool, considering that is well over half a century away!
Someone please clear this up for me, this CANNOT be what it means, and if it is, this is INSANE! I don't think I have ever personally known someone who lived to 95!
They can unilaterally change the contract because it is a change that only benefits you and not the insurer. This is insurance 101. Deferred annuities have an "annuitization start date". This is the date that the contract will automatically annuitize if the contract owner doesn't take affirmative action to do something different. They moved this from 85 (or some other age) to age 95. As the contract owner, you want this to be at as old of an age as possible. At age 95, you MUST make a decision to annuitize the contract or take it as a lump sum. Before age 95, the option to do something or not do something is completely your choice.
A better way to look at this is that in the original contract you had the ability to keep the money growing tax deferred in the contract until age 85 (or some other age...I just don't know the contract). You now have the ability to keep the money in the contract growing tax deferred until age 95.
This 100% benefits you and has no benefit to the insurer.
InsuranceExpert
Senior Member - 3K
posted: Jul. 31, 2010 @ 1:28p
dshibb said: Well Ameriprise is a crappy company to go through, but no way! Something's mixed up. There is no way that its set to not start until 95.
Please tell me that you don't sell annuities.
dshibb
Senior Member - 2K
posted: Jul. 31, 2010 @ 1:49p
Not a ton but in every case, annuitization began almost immediately after contract was started. We have never sold one that was intended to remain deferred for some time. Thanks for the clarification.
InsuranceExpert said: judyneric said: To start, I admit I do not know enough, nor have the temerity to learn enough, about personal financial matters as I should. I pretty much trust our advisor to do the right thing for us.
That being said, I recently received a letter from Ameriprise/RiverSource Annuities, and read it just tonight. It is titled "Update to your annuity contract," and something seemingly unbelievable caught my eye:
"We are changing your Annuitization Start Date to a later date than what appears on your annuity contract. Your new Annuitization Start Date is now your 95th birthday or the annuity contract's 10-year anniversary, whichever is later." [bold text is theirs]
Well, that information gave me a big huge WTF??? So is Ameriprise/RiverSource Annuities saying that they will not begin paying annuity payments until the holder turns 95??? Not cool, considering that is well over half a century away!
Someone please clear this up for me, this CANNOT be what it means, and if it is, this is INSANE! I don't think I have ever personally known someone who lived to 95!
They can unilaterally change the contract because it is a change that only benefits you and not the insurer. This is insurance 101. Deferred annuities have an "annuitization start date". This is the date that the contract will automatically annuitize if the contract owner doesn't take affirmative action to do something different. They moved this from 85 (or some other age) to age 95. As the contract owner, you want this to be at as old of an age as possible. At age 95, you MUST make a decision to annuitize the contract or take it as a lump sum. Before age 95, the option to do something or not do something is completely your choice.
A better way to look at this is that in the original contract you had the ability to keep the money growing tax deferred in the contract until age 85 (or some other age...I just don't know the contract). You now have the ability to keep the money in the contract growing tax deferred until age 95.
This 100% benefits you and has no benefit to the insurer. this sounds right- FORCED annuitization will be at a later date, tax-deferred growth can continue...
InsuranceExpert
Senior Member - 3K
posted: Jul. 31, 2010 @ 2:01p
dshibb said: Not a ton but in every case, annuitization began almost immediately after contract was started. We have never sold one that was intended to remain deferred for some time. Thanks for the clarification.
And Ameriprise *is* a crappy company.
That's fine, but you still should be reading the contracts.
barrister and IE are right, this is a good change and you can annuitize earlier
RiverSourcesteals
New Member
posted: Sep. 20, 2010 @ 12:28p
Don't know about the 95yo part but if you have NOT been swindled by this company yet... This company should be avoided at all costs. They outsource jobs overseas depriving legal US Americans of jobs. They refuse to honor contracts and "steal" your money with outrageous fees when you try and withdraw funds.
RiverSourcesteals said: Don't know about the 95yo part but if you have NOT been swindled by this company yet... This company should be avoided at all costs. They outsource jobs overseas depriving legal US Americans of jobs. They refuse to honor contracts and "steal" your money with outrageous fees when you try and withdraw funds.WTF?
ProfessorEd
Senior Member - 1K
posted: Sep. 20, 2010 @ 6:54p
InsuranceExpert said: judyneric said: To start, I admit I do not know enough, nor have the temerity to learn enough, about personal financial matters as I should. I pretty much trust our advisor to do the right thing for us.
That being said, I recently received a letter from Ameriprise/RiverSource Annuities, and read it just tonight. It is titled "Update to your annuity contract," and something seemingly unbelievable caught my eye:
"We are changing your Annuitization Start Date to a later date than what appears on your annuity contract. Your new Annuitization Start Date is now your 95th birthday or the annuity contract's 10-year anniversary, whichever is later." [bold text is theirs]
Well, that information gave me a big huge WTF??? So is Ameriprise/RiverSource Annuities saying that they will not begin paying annuity payments until the holder turns 95??? Not cool, considering that is well over half a century away!
Someone please clear this up for me, this CANNOT be what it means, and if it is, this is INSANE! I don't think I have ever personally known someone who lived to 95!
They can unilaterally change the contract because it is a change that only benefits you and not the insurer. This is insurance 101. Deferred annuities have an "annuitization start date". This is the date that the contract will automatically annuitize if the contract owner doesn't take affirmative action to do something different. They moved this from 85 (or some other age) to age 95. As the contract owner, you want this to be at as old of an age as possible. At age 95, you MUST make a decision to annuitize the contract or take it as a lump sum. Before age 95, the option to do something or not do something is completely your choice.
A better way to look at this is that in the original contract you had the ability to keep the money growing tax deferred in the contract until age 85 (or some other age...I just don't know the contract). You now have the ability to keep the money in the contract growing tax deferred until age 95.
This 100% benefits you and has no benefit to the insurer.
Without reading you contract this sounds right (I am a retired fiance professor and have several million in annuity contracts I have read). Such contracts usually gives you the option of taking your money out at a time of your choice (or give you heirs the value at the time of your death). This is what usually happens. There is a provision for an annuity at some age and this makes the contract an insurance one, which has tax and regulatory advantages.
Always read contracts. Annuity products (especially deferred ones) are suitable for only a few individuals due to the high fees, but they have been sold to many who should not have bought them.
InsuranceExpert
Senior Member - 3K
posted: Sep. 20, 2010 @ 10:24p
Annuity products (especially deferred ones) are suitable for only a few individuals due to the high fees, but they have been sold to many who should not have bought them.
Let's be careful with these generalities. Fixed deferred annuities don't have any fees.
Even if we are talking about high fee variable annuities, the arguments against the high fees are compelling, however, they have worked out very well for consumers over these last bunch of years.
We simply have to keep in mind that they are insurance products and they should be purchased because of the insurance features. If one doesn't want the insurance features, they (variable annuities) rarely make sense.
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