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TDA at Mutual of America

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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Reply to
Steve M
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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.

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.

Reply to
BreadWithSpam

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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-------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup.

Reply to
Steve M

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