After two children per Putting College, Tim and Kay Plumlee still expected a comfortable retirement with a balance of $ 126000 in Tim’s profit-sharing plan.
But if a real estate agent told them how they can order that a sum guaranteed annual return of 6 per cent of investment in a variable annuity, plum Lees, Ulysses, Kan., jumped on what seemed a population, the risk assessment of investment.
“It seemed too good to be true,” said Kay Plumlee.Two years later their retirement nest egg geschwunden to $ 60000th The couple are in their 60 years in their dreams of fixing their homes and a cruise.
“It was our economy,” she said.William Stapp, 58, Overland Park, Kan., lost even more. He presented his Hallmark $ 433000 in a variable annuity of the annual pension in 2000, that investment now is worth $ 190000th
To be sure, many people have lost money in the stock market over the past two years. And insurance industry officials say that the market collapse is the real culprit.
But the regulators say many aggressive insurance agents and brokers oversold thousands of people like the plum Lees on the virtues of diesig Variable Annuities, often as investment funds wrapped in an insurance. They say, consumers have not been warned of risks or said that the complexity of markets lead to large commissions, hidden fees and steep surrender charge, if the money is too early.
Hundreds of thousands of Variable Annuities months have been sold in the stock market in its peak, experts say. From 1995 to 2000, an annual turnover of Variable Annuities ballooned to $ 49.5 billion to $ 137.2 billion. Many elderly, for the first time in seminaries planned retirement served with three full dinner dishes. Baby Boomers, blinded by dreams of early retirement, rolled million for the plans of participation in profits in variable Annuities.