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- Hopeful Ever After #013
Hopeful Ever After #013
September 2025
Carolyn Howard, CFP®
October 02, 2025 • Estimated Reading Time: 5 minutes
Hopeful Followers,
It is official – it is Fall. The days are getting shorter, the sun is setting sooner, and there are signs that our gardens are waning into the sleep of Winter. As you think about moving forward after your person’s death, think of this time of year as a time to reflect on yourself and the quietness of the closed windows and cooler days. You may not feel like it yet, but you do still have your “wings” that emerged in the Spring. I hope this month’s newsletter will inspire you to enjoy the colors of Fall, the change of what we wear, and the quieter sounds, and stillness of ourselves.
Sending Hugs,
Carolyn
❝
“A friend is one of the nicest things you can have and one of the nicest things you can be.”
Snoopy
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This Month’s Financial Tip
TIP: Read the prospectus of your investments prior to making these important decisions. Don’t pay too much. Exchange traded funds (ETFs) are generally the lowest cost option – outside of an insurance product.
We have been talking about fees for the last 2 newsletters. I promise this is the last one but an important one.
Internal fees: These are the fees that are hidden inside of mutual funds, exchange traded funds, and variable insurance products. They are the way the managers get paid and it includes the cost of operating these investments.
Generally, the most expensive of these products are the variable insurance products. If it is a variable annuity, it can include mortality and expense charges (M&E charges) are 1.0%-1.5%. In addition to those fees, there are underlying fund expenses that can be .25%-1.25% (the fund expenses are generally higher than funds that have the same names inside the insurance products.
Optional fees can include lifetime income fees which can add another 0.95-1.5%. You can also have surrender fees. Those are fees charged prior to the contract maturing. Generally, you can withdraw 10%/year surrender charge free. Guaranteed Death Benefits can add 0.25%-0.50%. Variable products are the most expensive.
Please call me 941-841-6564 or email me at [email protected]
A Lesson from Joy
Our client, Joy, came to us with an IRA that had been invested in a Variable Annuity. We reviewed it.
Her mortality and expense fees were 1.5% per year; she also had bought an extra Death Benefit for 0.5% per year; the mutual funds that were invested averaged 0.95% per year.
Her total fees were 2.95%.
She had a surrender charge for 5 years beginning at 7% and declining to 0% after year 5. Fortunately, she had the contract for 6 years.
We discussed her options, we transferred the account out of the variable annuity into a Traditional IRA. We invested the account based on her current strategy.
The total fees internally were 0.05% per year. Our advisory fee was 1.0% per year. Her total fees were 1.05% which also included ongoing Financial Planning updates at no additional cost.
Her account automatically increased in returns by 1.9% per year. Please understand how you are investing in your accounts.
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