Thanks Hans and Tom for helping us put our Midland Annuities together. To us, it is like buying our own pension for a stream of income the rest of our lives. The guaranteed income for life is nice to have in our retirement plan.
Thanks for a most helpful video. It begs a question about using money in an IRA or 401(k) to fund an annuity income rider. Your example is for a single 65 year old and for a couple both age 65 and what the guaranteed payouts are 0 - 10 birthdays after he annuity is issued. If the income is taken ten birthdays after issue, the annuitant would be 75 but generally, the RMD should start when they are 73. A more extreme example is buying an annuity income rider when one is say age 72, the year before RMDs are to start. So, my question is how are annuity income riders treated in terms of RMDs? Thanks very much…
@@davearey4922 Thanks for your insightful question. The annuity is an IRA so any distribution from the IRA/annuity counts toward the RMD. We seldom put ALL of a persons IRA into an income annuity. Other IRA funds are available to take the RMD from at 73, 74, 75……. One can add up all their IRAs and calculate the RMD in total and then distribute it from just one of the IRAs.
@@CardinalAdvisors Thanks for your prompt and helpful reply. Please check my understanding with an example. A married couple, both with the annuitant (IRA owner) age 68 and spouse (joint annuity) is 65. The annuity income rider is based on the age to the younger spouse (age 65). Five years after the annuity is issued, the IRA owner and annuitant is 73 and RMDs start. As of 12/31 the IRA owner has this annuity income rider and an IRA with a couple of mutual funds. The mutual funds together are worth $1,200,000. The annuity has both a "cash value" of the annuity contract (say that's now $110,000) and there is a value of the income rider that is $135,000, both are as of 12/31. Am I correct that the IRA owner's RMD would be to add the $1.2 million to (which one, the annuity cash value OR the income rider cash value?) and then apply the appropriate IRS factor to that amount (either $1,310,000 ($1,200,000 plus $110,,000)) or $1,335,000 ($1,200,000 plus $135,000))? And, once the annuity income rider begins paying out the monthly annuity, those dollars would be treated/counted toward) the RMD? For a married couple...I guess it gets a bit more complex when the IRA owner - annuitant dies and the spouse starts getting annuity payments for his or her life. Taxable, I would think and when that spouse is subject to RMD, those annuity payments "count" toward his or her RMD, right? Complex stuff it seems to me. Thanks again for your helpful videos...
I am in the last year of my FIA with Midland...............there cap they gave me was a whole 3.9%. Next August I will be out of the surrender value period and will roll over my FIA with Midland to a buffered ETF
@@JasonSoloman absolutely which I find a strange question since we are talking about in the video fixed index annuities Is the whole fix index Annuity idea only in and ETf wrapper No fees, you can trade them anytime and they are wonderful And as you know for those approaching retirement and those in retirement, it’s all about principal protection and here’s the way to be in the market at all times with some guard rails and upside of 12 to 15% and that upside is not dictated by some insurance company that once You take out a fix index annuity then they lower the rates meaning the caps because now you are on the hook for 5 to 7 years or whatever the timeframe is As far as income writers and such I just don’t see both things being such a big deal when there’s other ways, especially to protect principal
@@missouri6014 Can you post the specs on that contract here please? Most buffer products offering 12-15% growth potential only protect the first 10% of your account.
@@TacticalInvestmentAdvisors I am not sure if you’re asking for the specs of my index annuities that I have now If so, there’s one with Midland and there’s one with American equity The melons in each is around 250,000 and I’m in the last year of the surrender penalty phase so this time next year, I get to roll them over into an IRA of my choice I may have forgot to tell you that they are within an IRA now They started off to be a very good decision when interest rates were low and they would offer decent rates each year in comparison But last year and this year those rates were under 4% meaning as long as an S&P went higher than 4% then I would only be capped at 4% Happy to give you all the information that you may need if you have a better solution Just let me know how to get in touch with you
@@missouri6014 Jason wrote to me. He is a friend of mine. He wanted us to reach out to you. You are free to work with Jason or us. Here is my contact info: Hans "John" Scheil Certified Financial Planner™ Cardinal Advisors 2530 Meridian Parkway, Suite 100 Durham NC 27713 P: 919-535-8261 C: 919-714-3397 www.CardinalGuide.com Hans@CardinalGuide.com
One strategy - if most/all of your retirement is in pre-tax IRA - is to set this up and use annual proceeds to pay taxes on IRA withdrawals during the out years. By doing this, you have an annual income source that can cover your tax bill, but will not be subject to any sequence of return risks. And - mentally speaking - it is outside of your IRA balance and you wont have to over-withdraw from IRA to cover taxes (if pre-tax IRA is your only source of money in retirement). This brings a special peace-of-mind IMHO.
How much does the insurance company take out for rider fees ? management fees ? other fees? EXAMPLE QUESTION At age 66 7800 year for 1st 10 years = 78,000 putting one ahead of the game as opposed to waiting 10years age 76 for 18,410 which would take 4.5 more years age 80.5 to be equal to the 78,000 already collected, and I can still keep collecting the 7800 year until I die? Is my thinking correct?
Last year I purchased a fixed index annuity with a lifetime income benefit rider. After 4 years, the payout percentage is 6.60, after 5 years, it's 6.74. Can I begin payments after 4.5 years, would the payout percentage then be 6.67? Thanks
What kind of annuity is this rider tied to ? A FIA? Devil in the details. I own an IUL with Midland National (a modified endowment contract) and the cash value is tied to the SP500 with a CAP.. started about 7-8 years ago and the initial cap was 12%.. EVERY year they lower the cap so now the most my money can grow is about 3% after their fees. I am going to cash it out this fall because Midland National does not offer a descent cap anymore. Buyer Beware. Income Riders require annual fees that reduce your account value.. Better to do a MYGA for 5-7 years.. then do a 1035 exchange into a SPIA for lifetime income... will get more per month this way, but the agents will get less commission , so you won't her about this way.
@@pware9643 This is a fixed annuity. The monthly/annual income amounts are unaffected by the interest credited or the rider fees. They are as shown on the board.
Thanks Hans and Tom for helping us put our Midland Annuities together. To us, it is like buying our own pension for a stream of income the rest of our lives. The guaranteed income for life is nice to have in our retirement plan.
Thank you Hans and Tom. Great job as usual.
Glad you enjoyed it. Thanks for watching
Thanks for a most helpful video. It begs a question about using money in an IRA or 401(k) to fund an annuity income rider.
Your example is for a single 65 year old and for a couple both age 65 and what the guaranteed payouts are 0 - 10 birthdays after he annuity is issued.
If the income is taken ten birthdays after issue, the annuitant would be 75 but generally, the RMD should start when they are 73.
A more extreme example is buying an annuity income rider when one is say age 72, the year before RMDs are to start.
So, my question is how are annuity income riders treated in terms of RMDs?
Thanks very much…
@@davearey4922 Thanks for your insightful question. The annuity is an IRA so any distribution from the IRA/annuity counts toward the RMD. We seldom put ALL of a persons IRA into an income annuity. Other IRA funds are available to take the RMD from at 73, 74, 75……. One can add up all their IRAs and calculate the RMD in total and then distribute it from just one of the IRAs.
@@CardinalAdvisors Thanks for your prompt and helpful reply.
Please check my understanding with an example. A married couple, both with the annuitant (IRA owner) age 68 and spouse (joint annuity) is 65. The annuity income rider is based on the age to the younger spouse (age 65).
Five years after the annuity is issued, the IRA owner and annuitant is 73 and RMDs start.
As of 12/31 the IRA owner has this annuity income rider and an IRA with a couple of mutual funds. The mutual funds together are worth $1,200,000. The annuity has both a "cash value" of the annuity contract (say that's now $110,000) and there is a value of the income rider that is $135,000, both are as of 12/31.
Am I correct that the IRA owner's RMD would be to add the $1.2 million to (which one, the annuity cash value OR the income rider cash value?) and then apply the appropriate IRS factor to that amount (either $1,310,000 ($1,200,000 plus $110,,000)) or $1,335,000 ($1,200,000 plus $135,000))?
And, once the annuity income rider begins paying out the monthly annuity, those dollars would be treated/counted toward) the RMD?
For a married couple...I guess it gets a bit more complex when the IRA owner - annuitant dies and the spouse starts getting annuity payments for his or her life. Taxable, I would think and when that spouse is subject to RMD, those annuity payments "count" toward his or her RMD, right?
Complex stuff it seems to me. Thanks again for your helpful videos...
I am in the last year of my FIA with Midland...............there cap they gave me was a whole 3.9%. Next August I will be out of the surrender value period and will roll over my FIA with Midland to a buffered ETF
Why a buffered ETF? Is the downside risk of buffered etfs worth the limited upside growth?
@@JasonSoloman absolutely which I find a strange question since we are talking about in the video fixed index annuities
Is the whole fix index Annuity idea only in and ETf wrapper
No fees, you can trade them anytime and they are wonderful
And as you know for those approaching retirement and those in retirement, it’s all about principal protection and here’s the way to be in the market at all times with some guard rails and upside of 12 to 15% and that upside is not dictated by some insurance company that once You take out a fix index annuity then they lower the rates meaning the caps because now you are on the hook for 5 to 7 years or whatever the timeframe is
As far as income writers and such
I just don’t see both things being such a big deal when there’s other ways, especially to protect principal
@@missouri6014 Can you post the specs on that contract here please? Most buffer products offering 12-15% growth potential only protect the first 10% of your account.
@@TacticalInvestmentAdvisors I am not sure if you’re asking for the specs of my index annuities that I have now
If so, there’s one with Midland and there’s one with American equity
The melons in each is around 250,000 and I’m in the last year of the surrender penalty phase so this time next year, I get to roll them over into an IRA of my choice
I may have forgot to tell you that they are within an IRA now
They started off to be a very good decision when interest rates were low and they would offer decent rates each year in comparison
But last year and this year those rates were under 4% meaning as long as an S&P went higher than 4% then I would only be capped at 4%
Happy to give you all the information that you may need if you have a better solution
Just let me know how to get in touch with you
@@missouri6014 Jason wrote to me. He is a friend of mine. He wanted us to reach out to you. You are free to work with Jason or us. Here is my contact info: Hans "John" Scheil
Certified Financial Planner™
Cardinal Advisors
2530 Meridian Parkway, Suite 100
Durham NC 27713
P: 919-535-8261
C: 919-714-3397
www.CardinalGuide.com
Hans@CardinalGuide.com
One strategy - if most/all of your retirement is in pre-tax IRA - is to set this up and use annual proceeds to pay taxes on IRA withdrawals during the out years. By doing this, you have an annual income source that can cover your tax bill, but will not be subject to any sequence of return risks. And - mentally speaking - it is outside of your IRA balance and you wont have to over-withdraw from IRA to cover taxes (if pre-tax IRA is your only source of money in retirement). This brings a special peace-of-mind IMHO.
How much does the insurance company take out for rider fees ? management fees ? other fees? EXAMPLE QUESTION At age 66 7800 year for 1st 10 years = 78,000 putting one ahead of the game as opposed to waiting 10years age 76 for 18,410 which would take 4.5 more years age 80.5 to be equal to the 78,000 already collected, and I can still keep collecting the 7800 year until I die? Is my thinking correct?
Last year I purchased a fixed index annuity with a lifetime income benefit rider. After 4 years, the payout percentage is 6.60, after 5 years, it's 6.74. Can I begin payments after 4.5 years, would the payout percentage then be 6.67? Thanks
What kind of annuity is this rider tied to ? A FIA? Devil in the details. I own an IUL with Midland National (a modified endowment contract) and the cash value is tied to the SP500 with a CAP.. started about 7-8 years ago and the initial cap was 12%.. EVERY year they lower the cap so now the most my money can grow is about 3% after their fees. I am going to cash it out this fall because Midland National does not offer a descent cap anymore. Buyer Beware. Income Riders require annual fees that reduce your account value.. Better to do a MYGA for 5-7 years.. then do a 1035 exchange into a SPIA for lifetime income... will get more per month this way, but the agents will get less commission , so you won't her about this way.
@@pware9643 This is a fixed annuity. The monthly/annual income amounts are unaffected by the interest credited or the rider fees. They are as shown on the board.