What is a Variable Annuity?
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- Опубліковано 29 лип 2024
- Everything you need to know about variable annuities.
Links in this video:
SEC's "Variable Annuities; What You Should Know" - www.sec.gov/investor/pubs/sec...
Retirement Planning Insights - www.tenonfinancial.com/newsle...
Taxes in Retirement - / taxesinretirement
#VariableAnnuity #Annuity #Annuities
DISCLAIMER: This video is only helpful hints and education. It is not specific tax, legal or investment advice. Before considering acting on anything you see in this video, first consult with your tax, legal or investment advisor. While the information expressed in this video is believed to be accurate, neither Andy Panko, CFP®, RICP®, EA nor Tenon Financial LLC make any guarantees to its accuracy.
This guy IS GREAT!!!! I love this- You have the millennials contribution to the retirement financial world via this Steve Guttenberg clone. These videos are VERY informative and make a very confusing subject easy to wrap your brain around. I am licensed life insurance producer and I watch these videos as a form of continuing education, so KUDOS to Andy Panko!
thank you!
Thank you for explaining. Sounds like a tricky way to get my $$$. My investment should NEVER produce less than I invested.
Putting it in a CD would at least earn me interest.
Like any investment, it's all about the risk/reward trade-off. Yes, you can get a guaranteed X% of interest from a CD, a Treasury Bill, etc. But that interest may not be enough to meet your needs for growth from your investments. In that case, you may need to consider investing in things that have a better chance of producing a higher return over the long-term. BUT, there is no free lunch; you will take on more risk. Such as investing in the stock market. Chances are, over the long-term it will grow more than the interest you can get in CDs. However, there can and will be years where it produces less, if not negative.
Very well presented and objective information on an often difficult to understand subject. Your videos are great keep them coming!
Thanks Brian! I appreciate the feedback. I’m glad you find the videos helpful!
Great. concise presentation. Meat and potatoes, hold the garnish! Thanks, bud.
This was very helpful in understanding what I already purchased with the riders in place. Thank you!
I'm glad it was helpful!
Thank You , Thank You & Thank You ! very beneficial information .
Excellent video! Thank you
Good job man !
Thank you!
Fantastic! Great examples, guess I am lucky my prospectus is only 44 pages. My gut instinct told me I should keep my money in a IRA, but I was strong armed by my advisor (fudicary?). Bottom line going to wait for surrender charges are zero and take my hit with poor yields and cash out.
Very nice summary👌🏻
Thanks!
Hello like your blogs, very informative. Here's a kind long question. 1. Want to see what u think? . Annuity question. Have $300K, want a fixed immediate @5% annually. for 10,15 or 20 years Is that doable ? 5% of $300K is $15,000. If so, how does that work? If no, why not? 2. What are the fees or service charges for this kind of annuity? Are fee/service charge monthly/annually? Will fees increase over time and by what percentage? Looking for feeedback from all sources. Thanks in advance.
You can play around with free quotes (without having to put in your name or email or anything) on www.immediateannuities.com. That will give you an idea of the types of payouts you can expect based on your current age, whether or not you have a spouse and want the benefit to last after your death, if you want the benefit to last for at least a certain amount of years, etc.
If you want a guaranteed 5% annual payment of JUST INTEREST (i.e. it won't deplete your $300k principal value), no, that's not possible. But if you're looking/willing to spend down that $300k to nothing, yes, if you're 60-ish or older, you can get lifetime payments that equal 5% or more - depending on the payment time you select - of the amount of money you use to purchase the annuity.
Great info. Thanks for your help!!
You need a rising income in retirement that will aim to exceed or outpace inflation. A fixed annuity will cause you to fall short of whatever future income goals you have on that detail alone. Variable annuities are great in the sense that they allow you stay invested and especially more aggressively as you have the embedded guarantees within the annuity.
Once a person decides what type of annuity is for them ie: an income or variable, how do they decide on specific product with any of the companies that offer annuities? There are so many out there.
Honestly, I'm not aware of any person or source or way to be able to truly sift through all of the available products out there. You definitely want to stay away from "captive" agents who work only for one company and are only able to sell that company's products. Because they won't be able to show or sell you any of the dozens of other insurers' products.
But even if you find a good non-captive agent who can sell products from multiple insurers, that person almost certainly won't have the ability to sell ALL insurers' products, hence that person will quite likely have no knowledge or access to products outside of the handful of insurers with whom the person is licensed.
I think the best you can do is find an agent who is recommended/trusted AND is non-captive. Tell that person what you think you want, and why, and he or she should be able to find a good match. Again, they won't be able to screen through EVERY available annuity. But practically speaking, I don't think that is a huge problem. Frankly, there are way too many slightly different flavors of the same ultimate product. All of the insurers all try to put their own spin and twist on things to get you to buy their product instead of the nearly identical product from someone else. But ultimately, the products are going to be largely the same across most insurers. There is a good chance that you're not missing too much by not being able to be shown every single annuity out there.
@@RetirementPlanningEducation Thank you for responding so quickly and also the great explanations. I am in my 40s and an annuity is really not for me, but I live at home and have little living costs and I already maxed out my 401k and IRA so I am looking at an annuity just perhaps for this one year as a tax write off, but, I wouldn't collect until I'm much older. Currently doing research on annuities.
Thank you! It was really helpful. I have a question that I can't find the answer. Is taxable income from a variable annuity considered as an investment income? If it is then we will be able to use the income to offset the investment interest expenses under 1040 Sch A. Thank you so much!
No, it's not. Any interest/gains you make on any annuity product is taxed as ordinary income (not the lower reduced long-term capital gains tax rates). And it's not considered investment income for purposes of deducting investment interest expense on Schedule A.
@@RetirementPlanningEducationThank you for your answer. It is very helpful. Under Form 4952 "Investment Interest Expense Deduction" instruction, the definition for Investment income is: Gross income from property held for investment includes income, unless derived in the ordinary course of a trade or business, from interest, ordinary dividends (except Alaska Permanent Fund dividends), annuities, and royalties. It did mention annuities income. I have a client who is trying to use a variable annuity to offset his investment interest expenses. He is about to pull the trigger. I just can’t find answer from the IRS website. I will really appreciate it if you can share some of your thoughts.
@@lamudawa4661 I don't know then. I didn't think annuities were considered investments as they're insurance contracts. And it's muddied in that if it's a qualified annuity, it's all functionally an IRA distributions. And I don't believe IRA distributions are considered investment income for purposes of deducting interest expenses. So only non-qualified annuities would potentially count. And even then, it would only be the portion of the annuity withdrawal or income that's taxable, as the rest would just be a return of premium. So, at most, maybe it's okay to consider the taxable portion of hte annuity distribution reported on 1099-R as investment income...I really don't know
@@RetirementPlanningEducation Thank you for sharing your thoughts. It is really helpful! I totally agree with what you said. I love watching your videos. I learned so much from it. Thank you for your great work!
Does the death benefit last throughout the accumulation phase only? Is the death benefit gone once I begin to annuitize?
It really all depends on the particular annuity and it’s specific features. There are a nearly infinite number of ways insurers tweak their products and features amongst each other
@@RetirementPlanningEducation I have a GLWB rider. How does that affect the death benefit?
@@elenasandoval4676 without reading through your annuity contract to understand the specifics of your withdrawal and death benefit riders, I unfortunately can’t say