“The news of my death has been greatly exaggerated” – Mark Twain The Stretch IRA continues to survive. The “investment industry” has written much about the death of the Stretch IRA who; would have you believe, the Stretch IRA is dead. My recent attempts to publish in the investment industry have been met with several rejections. Not surprising because, the “investment industry” is not part of the IRS stretch IRA exempted class…
Stretch IRA – A Triumphant Return!
“Hello Boy’s, I’m Back!” – Russel Case “Independence Day” The annuity Gods once again smiled upon us when the IRS in a stunning “clarification” 02.24.2022 stated; The Secure Act’s (01.01.2020) 10 – year distribution rule does NOT apply to certain annuity contracts (single premium immediate annuity – SPIA) and defined benefit pension plans. Required Minimum Distributions (RMDs) from “defined benefit” plans and certain annuities are now covered separately by section 1.401(a)(9)-6…
Immediate Annuity Industry Receives an F !
Annuity Secure Act Impacts Not Being Disclosed at Point of Sale Originally, I intended to author this blog one year following the passage of the Secure Act but, out of fairness, decided to give the life insurance industry a little more time. Now, a full TWO years later, I think sufficient time has passed to assign the life insurance industry an “official” F grade. I’m not going to single out individual carriers…
IRA Annuity Stretch Disappears Quietly Into the Night
“We all got up to dance, Oh, but we never got the chance!” – Don McLean At the stroke of midnight on 12/31/2019, with the Presidential signing of the new fiscal year 2020 appropriations bill with the SECURE Act (Act) attached, the very last effective opportunity to preserve Stretch IRA rights for future decades and to complete a stretch IRA annuity with unlimited funds to any Beneficiary by purchasing a…
Longevity Insurance, Protect Me and My Kid too!
Longevity insurance protection is the purchase of a fixed and scheduled income (usually monthly) permanent annuity contract that is priced today and supports a known annual income many decades from now, all guaranteed by the issuing life insurance company. Typically, the initial annuity income payment date occurs on or after your age 80. Annuity pricing mechanics have to do with interest rates and an estimate of how long you and…
It’s Official: Ken Fisher Hates … Me! (A Fictional Conversation With Ken Fisher– Satire)
Several weeks ago, a feverish annuity agent/industry response was unleashed driven by the posting of the USA Today interview of Ken Fisher (KF), Founder, Executive Chairman and Co-Chief Investment Officer of Fisher Investments titled; “Why I still hate annuities: Here are the reasons these investments are bogus”, on LinkedIn. This was, yet again, another annuity attack in a long series of such attacks spanning many years. A long-time Ken Fisher…
Minors and the SPIA Moment of Truth- UTMAs & Blocked Accounts
I believe many annuity agents who enjoy working with SPIAs are missing out on a very large market dealing with minors simply because; they lack the training and carrier support. Many of the very meaningful SPIA cases I have written have been for minors. Excluding litigation annuity contracts (aka structured settlements) market, there is plenty of other commercial SPIA opportunity. First, you need to get the old annuity saw phrase; “guaranteed lifetime income”…
SPIA Commutations and Income Taxation Considerations
SPIA post issue management concerns are not often considered. To most agents and individuals these contracts tend to be “fire and forget”. Post issue management concerns are typically associated with SPIAs issued via the new business application process and not associated with SPIAs that are created via “supplemental” annuity contracts when one annuitizes an existing deferred annuity contract or life insurance policy. Supplemental annuity contracts are altogether different animals when…
Deferred Annuities, Breaking the Serial – SPIA Rescue
As annuity interest rates start to heat up coming out of their ice age thaw, it’s time to revisit what serial annuity contracts are and how to break serial contracts once they occur. Should general interest rates continue to rise and new declared rate deferred annuity business begins to pick up, there will be a fair amount of new 1035 exchange activity from older declared rate contracts with low current…
DOL Fiduciary Rule and SPIA Pricing Disclosure, It’s About Time!
There is a new sheriff in town! And his name is Fiduciary. Given the new Department of Labor (DOL) Fiduciary rules regarding individual retirement arrangements (IRAs) and qualified retirement plans along with the retention of fixed immediate annuity contracts under the PTE 84 – 24 exemption, I believe the time has finally arrived to compel a more thorough and complete fixed immediate annuity pricing disclosure. If all you carriers out…
