On Thu, 3 Apr 2008 15:00:39 -0500, BreadWithSpam[at]fractious.net wrote:

- quote -

Thanks for the response. I will start researching other places to put
this. They were paying 5% on this fund when I switched in 09/2006 but
currently it's paying under 4% and expect it will drop in the next
couple of months.


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Steve M <stephen.moore[at]REMOVETOREPLYipa.net> writes:

- quote -

You might want to reconsider that - regardless of the insurance
or quality of the funds you've chosen in which to invest your
IRA. MofA appears to charge 50-90bp as "annual separate account
expenses" *on top of* the charges for managing the underlying funds.

That's a lot of money they're taking from you.

[And they don't tell you about it up front on their web site -
I had to download a 300+ page prospectus PDF file and dig
into there to find this.]

I know that's not what you were asking, but it's enough
that it's very hard to ignore.

- quote -

It's not. It's guaranteed by the claims-paying ability of the
insurance company. Mutual of America is rated AA- according
to Insure.com. That's pretty good. But it's not the same as
FDIC.

I'd be more concerned about the high costs of the account
there in the first place. The odds of you having a loss
due to their credit quality are very very small - much
smaller than the guaranteed loss you take when they charge
high fees.

Do you have a documented history of the returns on that
fund? I could not find any anywhere on their site or
in the prospectus - just the noted guarantee of 3+%.

If you really do want FDIC or similar insurance, there's
nothing stopping you from rolling that IRA over to a CD
at a bank, a mutual fund which is invested in treasuries
or other insured bonds. Just make sure that you do a
custodian-to-custodian IRA rollover so you don't pay
taxes (and possibly penalties) when you do it. Not only
will you get the insurance/guarantee you seem to want,
but you can also avoid that 90bp/yr fee MofA is apparently
charging you.



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After leaving a former employer I left my Individual Retirement
Annuity at Mutual of America and have recently converted to their
Interest Accumulation Account which I assumed is similiar to a Money
Market account. With what's going on in the financial markets lately
I called to make sure my balance was protected by a government
insurance agency such as FDIC. The person I spoke with told me they
don't have insurance per se but not to worry because MA is one of the
country's largest insurance companies. Should I be concerned? Do they
have government insurance?

TIA

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