Pharos-Tribune

November 9, 2013

SMART MONEY: Value of variable annuity deserves to be monitored

by Bruce Williams
Syndicated columnist

---- — DEAR BRUCE: My wife is 60 years old, and I am 59. In addition to $300,000 in other investments, she has around $200,000 in a variable annuity, which went way down in 2008, but has since recovered. With the Dow at 15,000, I am pleading with her to get out of it and simply park it for the time being.

She just resigned today from her job at the hospital. She will have to pay COBRA for a while until a new position comes along. She doesn't take my advice, but maybe she will take yours. I used to listen to you on WMCA. — N.N., via email

DEAR N.N.: As a former listener on WMCA, which takes us back over 30 years, you and I have been together for a long time. Whether your wife will listen to me is another question.

Since the variable annuity has been around for quite some time — you mentioned it went down in 2008, which means it has been around for five years or more — the likelihood is that you can get out without any type of penalty. If you are nervous about the value changing a substantial part of your investment portfolio, I have no quarrel with keeping an eye on it as long as it's doing well.

The moment it starts to sink, you should consider getting out or deciding at what point you will. You didn't indicate what your wife does at the hospital, but the likelihood is that she will be able to find some reasonable employment. You guys are in pretty good shape with $500,000 in investments.

DEAR BRUCE: Following my uncle's death, two war bonds came into my possession. They are valued at $10 each, dated August and October 1945. Do they have any value beyond the face amount? Both are series E and were issued by the war department. The instructions on the backs of the bonds are faded. — V.S., via email

DEAR V.S.: One thing is certain: Those war bonds stopped earning interest many decades ago. Whether they have any value depends on a couple of things. It may very well be that the bonds were reported lost, stolen, destroyed or replaced and cashed in years ago.

The easiest thing to do is check with your bank. Even though banks are not handling bonds anymore, sometimes, if you are a decent customer, they will make inquiries for you. The value can be easily ascertained since the records are kept permanently.

You say they are $10. I thought the minimum war bond issued was $18.75, but I could be mistaken. It should be fun to trace this down. You can also go on the Internet and find instructions as to how to make inquires about the bonds' value. If nothing else, they will make an interesting wall hanging.