You need to determine your asset to liability matching and if your under funded, constrained or over funded in retirement. Would like to see an episode on that - and determine your risk factor in "running out of money"
Seems to be a good strategy for those that need someone to help portion the retirement. But it is insurance for someone that lives long. Better choose an insurance company that will remain solvent for your lifetime.
The problem with annuities are too many advisors are pushing FIA's as either bond replacements or with income riders. SPIA's /w MYGA's are a different story. What happened to the good old fashion bond ladder with treasuries or tips. Some of us are building up I-bonds as well.
The $500,000 is transferred tax deferred directly into 2 IRA annuities. The annuity payments are taxable distributions unless they are Roth IRAs. The annuity distributions also count toward RMDs.
Assuming the 2nd Annunity is a Delayed Annuity, wouldn't you get a better payout by just setting the money aside and waiting to purchase in 2032? Especially for the married couple. TIA
You bring up a good point. Most likely you will have more money in 2032 if you leave the money invested until 2032. Then there is the chance you’ll have less money. People buy this arrangement with part of their money so they know they have a paycheck if one of them lives a long time. The returns will be less but the peace of mind much greater.
Being 62 yr old I truly appreciate these. I assume there might be a tax on transferring from IRA to annuity? Or are we just pulling first 8 years from IRA and or Roth?
Looks interesting. Since most folks don't have a pension, I suppose using this could give you a pension substitute. Then retirement is more like a three legged stool with three income sources.
Or maybe 10 years before retirement and/or after the age 50 open an IRA through a taxable brokerage and maximize your IRA Contributions on High Yield Income ETFs, and it can be part of your income at 62 years old.
I attempted to get an apples to apples comparison for the second annuity using the Schwab deferred annuity calculator , to pay out $ 3423/month starting in 8 years, and it said it would cost $369K instead of the $295K you show here. The first annuity was pretty close , altho they showed only a 8 and ten year period certain choice available from their vendors. Do you think Schwab shows the wrong number?
thanks for the speedy response, I'll have to look further into this issue. The Schwab mentioned one says "joint life with cash refund". @@CardinalAdvisors
I hope you get well soon Hans 🙏 🤲
Thank you
@@CardinalAdvisors You're welcome!
I see that Hans is still recovering, hopeful he is back to his usual 120% soon :)
You need to determine your asset to liability matching and if your under funded, constrained or over funded in retirement. Would like to see an episode on that - and determine your risk factor in "running out of money"
Seems to be a good strategy for those that need someone to help portion the retirement. But it is insurance for someone that lives long.
Better choose an insurance company that will remain solvent for your lifetime.
Please do a breakdown with the pros and cons using a QLAC Annuity.
The problem with annuities are too many advisors are pushing FIA's as either bond replacements or with income riders. SPIA's /w MYGA's are a different story. What happened to the good old fashion bond ladder with treasuries or tips. Some of us are building up I-bonds as well.
Payout of 6 to 8 percent does appear to be attractive in the current fixed market.
What are the tax implications. Sell 500k to buy annuitys and .pay tax .Are the annuity withdrawals taxed ?
The $500,000 is transferred tax deferred directly into 2 IRA annuities. The annuity payments are taxable distributions unless they are Roth IRAs. The annuity distributions also count toward RMDs.
Assuming the 2nd Annunity is a Delayed Annuity, wouldn't you get a better payout by just setting the money aside and waiting to purchase in 2032? Especially for the married couple. TIA
You bring up a good point. Most likely you will have more money in 2032 if you leave the money invested until 2032. Then there is the chance you’ll have less money. People buy this arrangement with part of their money so they know they have a paycheck if one of them lives a long time. The returns will be less but the peace of mind much greater.
I wonder how these annuities apply to those retirees in the mid-seventies and beyond?
We would structure them differently for people in mid 70s. Thanks
@@CardinalAdvisors When you do Annuities are they structured as within AUM or outside of AUM?
@@Stocks1986 Outside AUM. It’s a separate business
Being 62 yr old I truly appreciate these. I assume there might be a tax on transferring from IRA to annuity? Or are we just pulling first 8 years from IRA and or Roth?
@@bobknight33 No tax when transferred. The annuity is an IRA. Taxed when you pull the income out. Thanks for watching.
Looks interesting. Since most folks don't have a pension, I suppose using this could give you a pension substitute. Then retirement is more like a three legged stool with three income sources.
People are generally pleased with the certain income for life.
Or maybe 10 years before retirement and/or after the age 50 open an IRA through a taxable brokerage and maximize your IRA Contributions on High Yield Income ETFs, and it can be part of your income at 62 years old.
Why invest in the 2032 annuity now? Why not just leave the money invested for 8 years and buy the annuity in 2032?
The 2032 annuity might be a deferred annuity, don’t know for sure.
@@tr3vorb438 The 2032 annuity is a deferred annuity with a known payout for the life of 2 people. Illustrations in the show notes.
I attempted to get an apples to apples comparison for the second annuity using the Schwab deferred annuity calculator , to pay out $ 3423/month starting in 8 years, and it said it would cost $369K instead of the $295K you show here. The first annuity was pretty close , altho they showed only a 8 and ten year period certain choice available from their vendors. Do you think Schwab shows the wrong number?
2 different types of policy. This one pays the beneficiary the cash value if both die before it is paid out.
thanks for the speedy response, I'll have to look further into this issue. The Schwab mentioned one says "joint life with cash refund". @@CardinalAdvisors