Bill: I'm 62 and retired and invested in pacific life annuity which guaranties your starting investment if it goes below that, I've lost 30% and 10% more if I pull out, your advice please. John
Thank you for your question, John. Like many Americans, you are clearly worried about how the financial crisis which you are hearing about on the news will affect you personally. This concern is justified, especially when it comes to the investments you have made to fund your retirement. Unfortunately, I do not have enough information about your overall financial situation to provide you with any specific advice regarding how to best protect your investments. I would strongly advise you to consult with a professional financial adviser who can review the details of your financial circumstances, determine what investment money you can afford to potentially lose based on your other assets and sources of income, and provide you with a personalized recommendation based on his professional experience. To read more about annuities, you can visit www.moneyextra.com.
In your question, you do not specify if the 30% you have lost is calculated based on the high value of the annuity or if you have actually lost 30% of your principal investment. You do mention in your question that Pacific Life guarantees your principal investment, so I assume that the loss you describe is not an actual loss of principal, but rather a reduction in the peak value of the fund. You also mention that there is a 10% penalty for withdrawal of your funds in the annuity. Assuming that you have not actually lost any principal, and that you will be penalized with withdrawing your funds, I would probably recommend that you take no action in regard to this fund, unless of course your research shows that Pacific Life is not a financially sound organization. That said, in these troubled financial times, many financial professionals would advise you to pull your funds out of any private account which is not insured by the Federal Deposit Insurance Corporation (FDIC) and put the funds either into an FDIC insured account, such as a standard savings account, or into government bonds, which are considered safe investments in uncertain economic times. However, the 10% penalty you will incur by withdrawing the funds from your annuity may more than outweigh any potential benefits, regardless of your concerns about the economy. Due to the limited view I have of your financial situation, I cannot make any specific recommendations regarding your investments, and again strongly encourage you to consult with a professional financial advisor.
I wish you the best of luck in finding the best investment choices for your situation, and hope that the information I have provided helps you Find. Learn. Save.