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Your 53-year-old client, Ms. Antsy, just inherited $80,000 from her aunt and has decided to retire immediately. She wants to invest in something that will allow her to begin making withdrawals immediately, and she wants to be certain that she will continue to receive payments at least until she turns 62 and begins drawing social security. You should recommend Ms. Antsy invest in:
Suggested Answer: D
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If Ms. Antsy is 53 years old and wants to invest in something that will allow her to begin making immediate withdraws and continue to make withdrawals until she turns 62 , you should recommend none of the choices provided. They are all annuities, and Ms. Antsy will be subject to a 10% penalty for withdrawing any amount prior to turning 59 .
12 comments · newest first
DA
Daisy
12 months ago
Why not just keep it in a high-yield savings account instead?
MA
Maurine
1 year ago
I think D could be a better choice, depending on her needs.
LU
Lucina
1 year ago
Wait, can she really rely on an annuity for that long?
TI
Tijuana
1 year ago
Totally agree, C makes the most sense here!
MI
Mickie
1 year ago
C is the best option for immediate withdrawals.
CA
Carma
1 year ago
I recall a practice question similar to this, and I think the immediate annuity was the right choice for someone looking for immediate income.
CA
Carma
1 year ago
I think the answer might be C, a single-payment immediate annuity, because she wants to start receiving payments right away until she gets Social Security.
CE
Ceola
1 year ago
I'm a bit unsure about the difference between single-payment and periodic-payment annuities. Wouldn't she want the single-payment one since she has a lump sum?
VI
Vivienne
1 year ago
I remember studying that immediate annuities start paying right away, which seems to fit Ms. Antsy's need for immediate withdrawals.
ED
Edison
1 year ago
Hmm, I'm a bit unsure about this one. Is it really that simple? I feel like there could be some trick to it that I'm missing.
MY
Myra
1 year ago
Security requirements are definitely key for this process. I feel pretty confident that option A is the right answer here.
LI
Lindy
1 year ago
I'm not totally sure, but I feel like scheduling additional preventive maintenance could slow things down at the bottleneck.