Business

My Dumbest Investment

55 Years Young

Some time ago, my money in a managed brokerage account wasn’t doing too badly. When I got divorced, though, I tapped some of it to live on for a while, and I began worrying about the account’s hefty annual fee. An old friend introduced me to her boss at a brokerage, who said that at age 55, I should sell everything and buy investments such as annuities to preserve my assets. I agreed, but soon realized that my money was locked up and I could withdraw only a certain amount annually. Also, I suddenly owed a lot in capital gains taxes. There was time to undo my decision, so I did. Even at 55, I was firing up my career.

— H. H., via email

The Fool Responds: Some annuities can serve some folks very well, but learn a lot about them and any other investments before buying. Look closely at fees, restrictions, penalties and limitations on how well they can reward you. At 55, you may have 10 to 20 more working years, and it’s reasonable to still keep some money in solid stocks. ¦


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2012-10-18 digital edition


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