Nationwide Platinum V Plus

Laurel, DE(Zone 7a)

As some of you may know Steve lost his job in January after many years. He turns 60 in 2 weeks, he has no severence or retirment where he worked as it was non profit, but he did have a 401 plan. He must now do something with the money in the 401 and we are considering the Nationwide Platinum V Plus. It offers a guaranteed interest for the first 5 years and then a 60 day grace period to consider renewal for the next 5 years. A withdrawal of 10% of the principal is penalty free each year, of course will be taxed.

We do not want to annuitize this but would be interested in some sort of payout in the years to come. We are not likely to w/d any money at least for a year or so depending on our financial situation. I don't believe however that this account would be insured by FDIC or NCUSIF, should we be that risky?
Is anyone familiar with this Platinum Plan?
Thanks for any information or experiences you may have.

We can keep the money in a rollover with his present Principal group. Interest would be lower than the nationwide, but money all accessible after 90 days w/o penalty, but we are going to try hard not to w/d as we will definitely need this money for our later years, if so fortunate to make it there!
We are also considering just CDs at our local credit union.

Waterman, IL(Zone 5a)

With our national debt being in the trillions of dollars, and the Fed printing Monopoly money for the stimulus package, we invested in gold American Eagles. Since credit unions are owned by it's members, they are safer than some of the big banks and investment firms that are floundering today.

Laurel, DE(Zone 7a)

Thanks for the info, I will go check it out.

Albuquerque, NM(Zone 7a)

I wouldn't go with anything not insured by FDIC and even then I
would not put all my eggs in one basket. With the current economy
it may be wise to play it safe for the near-term.

For the reasons mentioned by Pastime, I've just moved some money
into CDs at a credit union. Down the road I can always move that money
elsewhere for better returns. For the moment I just want to know that
my money is secure.





This message was edited Feb 28, 2009 11:38 AM

Ocean Springs, MS(Zone 8b)

June, I know less than zero when it comes to investing. Like you I have money in a credit union which is for my retirement and I cannot afford to lose it. What are CDs and are they safe. It is obvious that you know about CDs or you would not have put your money there, please share your knowledge with us. thanks.

Naples, FL(Zone 10a)

Certificates of Deposit; it's a type of savings account that has a fixed term and rate. The more you put in, and the longer you tie it up for, the better the interest rate, generally.

Ocean Springs, MS(Zone 8b)

So what you are saying is and correct me if I am wrong that it is like having a savings account but you have to have it in there for a period of time but what happens if an emergency comes up can you get your money out or not.

Naples, FL(Zone 10a)

Yes, you can always get to your money; you then pay a penalty in reduced interest but it is always accessible.

Here are some examples. It's worth shopping around a bit.

http://www.mlnbank.com/EN/services/premcds.htm?gclid=CNGXm7DlgZkCFQQRswodV0qUmQ

Naples, FL(Zone 10a)

This is a clearer link
http://www.mlnbank.com/EN/services/tradcds.htm

Ocean Springs, MS(Zone 8b)

Thank you Dutchlady.

Laurel, DE(Zone 7a)

You can cash out the CD when it matures as well w/o penalty just must include as income on your tax return. Most places will also allow you to borrow against the CD, you don't necessarily have to pay it back but you would have to pay the interest which may be as low as 2%.

Albuquerque, NM(Zone 7a)

Stetchworth -- I too was concerned about emergencies that might not be
covered by our cash on hand so made sure to include buying a few CDs in
the minimum amounts available, with a one year maturity date. The lowest
amount available for purchase from my credit union is $1,000 for a 1-year CD.
That varies from institution to institution. My larger CDs pay a higher rate and
have a longer maturity rate but the smaller ones are my "safety net" that in an
emergency can be cashed out without major loss of any kind. I sure feel a need
for that right now.

Laurel, DE(Zone 7a)

There is a method called the step CD in which you put some money in several CD's and have them mature every 3 month interval, so you would have one CD for some $ that matures in Jan, another in March, another in June and so forth, that way you have only a few "steps or months" between each to w/d the $.

Ocean Springs, MS(Zone 8b)

Haighr, if you take money from your savings and put in CDs and later when you cash them in why do you have to report those on your tax return when you have already paid taxes on that money, I can see paying on the interest but not on the amount of the CDs. good idea about the step CDS.

Laurel, DE(Zone 7a)

Am talking about the rollover from 401 to CD and believe you would have to pay interest on it for tax purposes? You put the money in a CD and it is tax free until you take it out.

The way to defer the taxes is by setting up the CD as an IRA, IRA Rollover, IRA-SEP or other form of tax-deferred retirement account. You pay taxes on the contributions and interest income but not until retirement when you take distributions from the plan. You may pay less in taxes on the distributions if your marginal tax bracket is lower in retirement than it is today.



This message was edited Mar 1, 2009 3:46 PM

Ocean Springs, MS(Zone 8b)

I understand, thanks

Laurel, DE(Zone 7a)

The step idea does sound like a good one. I think we are goin gto go with a savings plan at 2/12% guarnateed FDIC at least for one year and then decide later. Very skeptical going without federally insured although not sure that will be any help if the economy worsens

San Antonio, TX(Zone 8b)

I built a "ladder" of one-year CDs with a credit union (called share certifcates) with one maturing about the 15th of each month. That way I am always within 30 days of having some maturing money that I can withdraw without penalty. If I did make a witdrawal I would try to leave the minimum amount required for the certificate on deposit. I haven't needed to withdraw any and I sometimes add to certificates - I'm allowed to do that within ten days of each maturity date.

Laurel, DE(Zone 7a)

Yuska, that sounds like a great plan. So you got a dozen of them, now that is a great idea. Do you just take out the interest you have earned then each month? Would it not be possible to just have one CD earning a rate and each month have a check drawn to you with the interest money rather than rolling it back into the CD? Of course with the step you have the option of taking the entire amount w/o penalty.
We did decide to go with a safe account with Steve's money at 2.12% and we can change to anything we want after 90 days. Hoping interest may rise a bit in the next month or year and we can make some gains.

San Antonio, TX(Zone 8b)

In my case I just wanted the ladder as a hedge against possible emergencies, and I haven't needed the interest for income. Our regional banks/credit unions here in Texas have long been ultra-conservative (read - stingy!) with interest rates, so withdrawals wouldn't be exactly hefty. (But thank goodness, our banks are solvent!) I chose a credit union because with fewer expenses than banks the rates can be slightly higher.

I don't know of any CD system that would pay out interest monthly on one account. The main reason rates can be higher than passbook savings is that inactivity of the certificate keeps the expense ratio lower for the bank. Perhaps a money market account could allow more flexibility. Plans do vary quite a bit state from state.

The plan you have chosen seems quite sensible. We must all be extremely vigilant and seek safety first and foremost.

Albuquerque, NM(Zone 7a)

I didn't know about the "step" or "ladder" plans and really
appreciate all this input. Interest rates from local credit
unions and community banks are low here too but at least
they're solvent.

My husband has six years to go before he can retire and
we thought we were preparing wisely. But, as Yuska said,
vigilance and safety is now our primary concern.

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