Retirement for Me!

[Tahoe Ray]

I agree with the Roth being your first step. It won't matter what you fund it with (annuities, mutual funds, ETFs etc.), you will put after tax dollars in and all withdrawals, including gains, will be distributed tax free (subject to a number of IRS rules).

You might want to sit down with a planner who can give you some direction. A lot goes into retirement planning and trying to do it on your own is a lot like someone trying to buy their own insurance...they don't know what they don't know.

Where are you in CA?

 

[0b1kanobee]

I thought he was 16 and had his video game taken away!

I'd look into IUL with living benefits and minimum guarantees. I'm currently liking Midland National but that just happens to be the product I'm studying now. I'd look at creating the most CV and not so much the DB.

Things that concern me are chronic and critical illnesses. What happens if you can't work? How long would your nest egg last before you even hit retirement? You could be completely wiped out before you get there.

 

[TDFnCali]

I agree with the Roth being your first step. It won't matter what you fund it with (annuities, mutual funds, ETFs etc.), you will put after tax dollars in and all withdrawals, including gains, will be distributed tax free (subject to a number of IRS rules).

You might want to sit down with a planner who can give you some direction. A lot goes into retirement planning and trying to do it on your own is a lot like someone trying to buy their own insurance...they don't know what they don't know.

Where are you in CA?

Yes! (I need 20 characters)
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I thought he was 16 and had his video game taken away!

I'd look into IUL with living benefits and minimum guarantees. I'm currently liking Midland National but that just happens to be the product I'm studying now. I'd look at creating the most CV and not so much the DB.

Things that concern me are chronic and critical illnesses. What happens if you can't work? How long would your nest egg last before you even hit retirement? You could be completely wiped out before you get there.

Someone just PMd me about that, said thats the best way to go....Im completely clueless about those.

I looked up FIA, now Ill look into IUL....thanks!

 

[0b1kanobee]

Yes! (I need 20 characters)
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Someone just PMd me about that, said thats the best way to go....Im completely clueless about those.

I looked up FIA, now Ill look into IUL....thanks!

PM me your email and I'll send you a really cool video. Might not get there for a couple of days but I'll get it to you. It explains A LOT young man! Ahhahaha

 

[rousemark]

Why would u need to put an annuity in a ROTH IRA, dont annuities have tax protection?

And why not just RNA for my WL?

.TD, it is true that money accumulates tax deferred inside an annuity. The question is when do you want to pay tax on the principal? Without using an IRA you pay the tax now and when you withdraw only the gain is taxable. With the IRA, the deposit is exempt from tax now and when you withdraw the entire withdrawal is taxable. The idea is that the IRA is better because when you retire you will be in a lower tax bracket. But the way things are going I would not bet on that.

 

[scagnt83]

What is funny/pathetic is that it took until page 2 for someone to stop joking around and answer the poor guys question!
No wonder people dont read old threads....
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Why would u need to put an annuity in a ROTH IRA, dont annuities have tax protection?

Annuities are Tax Deferred by Tax Classification.

But an IRA is Tax Deductible and Tax Deferred. (Traditional IRA)

So you get to Deduct what you contribute now, and then it grows Tax Deferred.
Then when you access your money it is Taxed as Income.

With the Roth IRA you do not get to Deduct Contributions from your yearly income taxes. But you do get to access your money Tax Free.

Roth vs. Traditional IRA is not an exact science.
All you can do is make educated guesses.
For some people, the $6k Tax Deduction could put them in a lower Tax Bracket, which could actually free up extra money via less taxes.

So it is situation specific.

Also, you can always do both. Do 50% to Roth and 50% to Traditional if you cant decide. Diversifying your taxation is usually not a bad thing.


Putting an Annuity in an IRA is more about the features and benefits of the Annuity.
An Annuity has more features than just Tax Deferral.

Usually the purpose is to lock in a Guarantee of some sort (Retirement Income, Death Benefit, LTC Doubling, No Loss Protection)
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Im completely clueless about those.

I looked up FIA, now Ill look into IUL....thanks!

And why not just RNA for my WL?

An IUL is an Indexed Universal Life Insurance Policy.

In short; it is a Cash Value Life Policy.


The CV in LI (life insurance) grows Tax-Deferred, and can be Accessed Tax-Free. (So the taxation is very similar to a Roth IRA.)


The key to a Cash Value Life Policy is to find one that accumulates CV at a decent rate.
This means using:
Participating WL (receives dividends which boost the CV)
UL (Accumulation UL)
IUL (Accumulation IUL)

Then you "overfund" the policy.
This means that you pay over the "Base Premium", up to what is called the "MEC Limit".

MEC Limit is the "taxation" limit, if you go over that limit the policy looses it's tax-free status.
The Illustration Software used will tell the agent where the MEC Limit is.

So the Term "Overfund" means paying up to, but not beyond, the MEC Limit.


An IUL Credits Interest to the Policy based on an Underlying Market Index. (usually S&P 500)
It Credits the gains, up to the Index Cap (Limit). (most caps are around 12% or 13%)
It also provides a Guaranteed Minimum each year if the Index is Negative.


You access the CV through what is technically a Loan.
This is how it is considered Tax Free by the IRS.

There are usually two types of Loans:
Fixed Loans
Participating loans (called other names too such as Variable Loans, Indexed Loans; it depends on the carrier)

Fixed Loans:
These are usually just a "wash". Take LFG for example; they charge 3%, but also Credit 3% on the money they charge the 3% against. So it "washes out" to 0%. So it is free to access.

Participating Loans:
These "Participate" in the Indexed Crediting.
Using LFG again as an ex.: They charge 2% against the Loaned CV; then the Loaned CV receives Indexed Crediting (whatever it may be 1%-13%).

So at worst you are charged 1% against your Loaned CV.
But the majority of the time (based on historical comparisons) the Loaned CV will recieve around 5% or more.
That means the Loaned CV (money you have already spent) actually still generates positive returns inside of the Policy.

In short: It allows for a Positive arbitrage between the 2% Loan Rate and the Yearly Indexed Crediting/Gains.
So money you have taken out and used, technically is still inside of your policy in a separate account, and can still help create gains inside your policy.

This allows an IUL to create a strong income stream.



Other benefits:
No arbitrary limits on contributions or access before a certain age.

The DB will always be more than the CV. So your loved ones will always get more than the actual CV gains.

Disability Protection Riders allow for a portion of your Premiums to be paid if you become disabled and cant work.


That is enough for an intro I guess. I tried not to write a novel... lol.

 

[xrac]

What is funny/pathetic is that it took until page 2 for someone to stop joking around and answer the poor guys question!
No wonder people dont read old threads....
- - - - - - - - - - - - - - - - - -


Annuities are Tax Deferred by Tax Classification.

But an IRA is Tax Deductible and Tax Deferred. (Traditional IRA)

So you get to Deduct what you contribute now, and then it grows Tax Deferred.
Then when you access your money it is Taxed as Income.

With the Roth IRA you do not get to Deduct Contributions from your yearly income taxes. But you do get to access your money Tax Free.

Roth vs. Traditional IRA is not an exact science.
All you can do is make educated guesses.
For some people, the $5k Tax Deduction could put them in a lower Tax Bracket, which could actually free up extra money via less taxes.

So it is situation specific.

Also, you can always do both. Do 50% to Roth and 50% to Traditional if you cant decide. Diversifying your taxation is usually not a bad thing.


Putting an Annuity in an IRA is more about the features and benefits of the Annuity.
An Annuity has more features than just Tax Deferral.

Usually the purpose is to lock in a Guarantee of some sort (Retirement Income, Death Benefit, LTC Doubling, No Loss Protection)
- - - - - - - - - - - - - - - - - -





An IUL is an Indexed Universal Life Insurance Policy.

In short; it is a Cash Value Life Policy. (Permanent Life Insurance) (PI)


The CV in LI (life insurance) grows Tax-Deferred, and can be Accessed Tax-Free. (So the taxation is very similar to a Roth IRA.)


The key to a Cash Value Life Policy is to find one that accumulates CV at a decent rate.
This means using:
Participating WL (receives dividends which boost the CV)
UL (Accumulation UL)
IUL (Accumulation IUL)

Then you "overfund" the policy.
This means that you pay over the "Base Premium", up to what is called the "MEC Limit".

MEC Limit is the "taxation" limit, if you go over that limit the policy looses it's tax-free status.
The Illustration Software used will tell the agent where the MEC Limit is.

So the Term "Overfund" means paying up to, but not beyond, the MEC Limit.


An IUL Credits Interest to the Policy based on an Underlying Market Index. (usually S&P 500)
It Credits the gains, up to the Index Cap (Limit). (most caps are around 12% or 13%)
It also provides a Guaranteed Minimum each year if the Index is Negative.


You access the CV through what is technically a Loan.
This is how it is considered Tax Free by the IRS.

There are usually two types of Loans:
Fixed Loans
Participating loans (called other names too such as Variable Loans, Indexed Loans; it depends on the carrier)

Fixed Loans:
These are usually just a "wash". Take LFG for example; they charge 3%, but also Credit 3% on the money they charge the 3% against. So it "washes out" to 0%. So it is free to access.

Participating Loans:
These "Participate" in the Indexed Crediting.
Using LFG again as an ex.: They charge 2% against the Loaned CV; then the Loaned CV receives Indexed Crediting (whatever it may be 1%-13%).

So at worst you are charged 1% against your Loaned CV.
But the majority of the time (based on historical comparisons) the Loaned CV will recieve around 5% or more.
That means the Loaned CV (money you have already spent) actually still generates positive returns inside of the Policy.

In short: It allows for a Positive arbitrage between the 2% Loan Rate and the Yearly Indexed Crediting/Gains.
So money you have taken out and used, technically is still inside of your policy in a separate account, and can still help create gains inside your policy.

This allows an IUL to create a strong income stream.



Other benefits:
No arbitrary limits on contributions or access before a certain age.

The DB will always be more than the CV. So your loved ones will always get more than the actual CV gains.

Disability Protection Riders allow for a portion of your Premiums to be paid if you become disabled and cant work.


That is enough for an intro I guess. I tried not to write a novel... lol.

Nice post Scagnnt83! Keep up the good work.

 

[scagnt83]

Nice post Scagnnt83! Keep up the good work.

Thanks. Im actually working on a couple of websites that cover these exact topics.

 

[TDFnCali]

What is funny/pathetic is that it took until page 2 for someone to stop joking around and answer the poor guys question!
No wonder people dont read old threads....
- - - - - - - - - - - - - - - - - -

Annuities are Tax Deferred by Tax Classification.

But an IRA is Tax Deductible and Tax Deferred. (Traditional IRA)

So you get to Deduct what you contribute now, and then it grows Tax Deferred.
Then when you access your money it is Taxed as Income.

With the Roth IRA you do not get to Deduct Contributions from your yearly income taxes. But you do get to access your money Tax Free.

Roth vs. Traditional IRA is not an exact science.
All you can do is make educated guesses.
For some people, the $6k Tax Deduction could put them in a lower Tax Bracket, which could actually free up extra money via less taxes.

So it is situation specific.

Also, you can always do both. Do 50% to Roth and 50% to Traditional if you cant decide. Diversifying your taxation is usually not a bad thing.

Putting an Annuity in an IRA is more about the features and benefits of the Annuity.
An Annuity has more features than just Tax Deferral.

Usually the purpose is to lock in a Guarantee of some sort (Retirement Income, Death Benefit, LTC Doubling, No Loss Protection)
- - - - - - - - - - - - - - - - - -

An IUL is an Indexed Universal Life Insurance Policy.

In short; it is a Cash Value Life Policy.

The CV in LI (life insurance) grows Tax-Deferred, and can be Accessed Tax-Free. (So the taxation is very similar to a Roth IRA.)

The key to a Cash Value Life Policy is to find one that accumulates CV at a decent rate.
This means using:
Participating WL (receives dividends which boost the CV)
UL (Accumulation UL)
IUL (Accumulation IUL)

Then you "overfund" the policy.
This means that you pay over the "Base Premium", up to what is called the "MEC Limit".

MEC Limit is the "taxation" limit, if you go over that limit the policy looses it's tax-free status.
The Illustration Software used will tell the agent where the MEC Limit is.

So the Term "Overfund" means paying up to, but not beyond, the MEC Limit.

An IUL Credits Interest to the Policy based on an Underlying Market Index. (usually S&P 500)
It Credits the gains, up to the Index Cap (Limit). (most caps are around 12% or 13%)
It also provides a Guaranteed Minimum each year if the Index is Negative.

You access the CV through what is technically a Loan.
This is how it is considered Tax Free by the IRS.

There are usually two types of Loans:
Fixed Loans
Participating loans (called other names too such as Variable Loans, Indexed Loans; it depends on the carrier)

Fixed Loans:
These are usually just a "wash". Take LFG for example; they charge 3%, but also Credit 3% on the money they charge the 3% against. So it "washes out" to 0%. So it is free to access.

Participating Loans:
These "Participate" in the Indexed Crediting.
Using LFG again as an ex.: They charge 2% against the Loaned CV; then the Loaned CV receives Indexed Crediting (whatever it may be 1%-13%).

So at worst you are charged 1% against your Loaned CV.
But the majority of the time (based on historical comparisons) the Loaned CV will recieve around 5% or more.
That means the Loaned CV (money you have already spent) actually still generates positive returns inside of the Policy.

In short: It allows for a Positive arbitrage between the 2% Loan Rate and the Yearly Indexed Crediting/Gains.
So money you have taken out and used, technically is still inside of your policy in a separate account, and can still help create gains inside your policy.

This allows an IUL to create a strong income stream.

Other benefits:
No arbitrary limits on contributions or access before a certain age.

The DB will always be more than the CV. So your loved ones will always get more than the actual CV gains.

Disability Protection Riders allow for a portion of your Premiums to be paid if you become disabled and cant work.

That is enough for an intro I guess. I tried not to write a novel... lol.

Yes, thank u for that.... That was very informative. I did read about IUL products last night, they are sounding better & better!

TDF
Sent via my Sprint Phone using Insurance Forums App

 

[Sales71]

You Also might want to look at a single 401 K to place a large amount of money in there. you can do up to 40k a year or so. That is if your 1099 and have non employees.

I have that for myself you can place mutual funds or stocks in that account. Its cost about $10 a year for the fee.