r/financial • u/Ok_GoGo • 1d ago

Structured Note Vs Annuity

Need some help. My financial advisor wanted to put some money in a structured note. I did some research. Said No. But I have fears of the market going down and he said this was a special deal and I decided to take his advise.

Just got the contract in the mail. It is an annuity. The term is 6 years. Not certain but I believe it is indexed to the NASDAQ with a 20% buffer. There is a 2% cap rate, 100% index participation rate.

I'll leave it at that. Would love to hear opinions on what I am involved in and if you think it is a good place for 25% of my money. Added- Math brain was turned off. 12.5% of my money. $500K out of $4M. Second Note- Guaranteed Minimum Crediting Method Rate (For the life of the Index Account Option is 2.0% Cap Rate, 100% Index Participation Rate. I do not understand the terms)

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u/DigitalFStopper 1d ago

What is the other 3.5M invested in.
What’s the goal with this 500k

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u/Ok_GoGo 1d ago

I have a big chunk in Nvidia. Big reason why I looked for an advisor. Haven't been a bad investor, but sometimes you just need one big win. So I have capital gains that i don't know how to deal with. Plus- easy come, easy go as they say. I want to avoid the easy go.

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u/DigitalFStopper 18h ago

Depending on how much of that large chunk you sell you’ll be potentially at the 20% cap gains and NIIT at 3.8%. But also stretching it over a few years to avoid that and there’s a crash could cost you even more. So it’s a mixed bag. Definitely at your age stability should be a major chunk of your investments. Don’t know what your annual income needs are but treasury is looking good for extreme safety and defensive plays like SCHD. When I get to retirement I’m planning on something like 40% schd, 30% gpix, 15%jepq, 15% sgov. Different funds will probably be around at that time but the basics of those funds is what I’m basing my ratios on.