“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…
Tag: Immediate Annuity
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…
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…
A Blast from The Past SPIA Protection Unintentional Consequences
Several years ago, the old Presidential Life Insurance Company, Nyack New York (Presidential), issued a SPIA with very unique variability which, I helped design. Of course, this was prior to the Athene Life and Annuity Company (Athene) purchase in 2013. Up until the Athene purchase, tens of millions of dollars of premium were accepted by Presidential for the “Income & Legacy”, the marketing name for the SPIA. As fate would…
Joint & Survivor Annuity (qualified) Non-Spouse Creditor Protection
Weeks ago, I commented on Forbs post regarding establishing a “conduit trust” for a non-spousal IRA beneficiary, usually an adult child. The attorney was recommending such a trust from a creditor protection standpoint relative to the IRA beneficiary. In June of 2014, the Supreme Court ruled a non-spousal inheritance of an IRA isn’t protected as “retirement funds” relative to the non-spousal Beneficiary. Therefore, inherited IRA funds may be seized in…
SPIAs a Historical Perspective
It occurred to me after writing fixed lifetime SPIAs for more than 30 years; I achieved a 100% persistency rate (except for a few deaths) and every consumer purchase along the way has been the absolute deal of a lifetime. I mean, how many financial products have been in a bull market for more than 30 years? Interest rates have only trended down since the mid-to late 1980s and carriers have only…
Charitable Gift Annuities vs. Commercial SPIAs
When clients express interest in charitable gift annuities (CGAs), the purchase decision usually begins with a charitable intent. In other words, they have a high interest in financially supporting a favorite charity that will issue a CGA and also by the way, reap some nice tax benefits along the way. However, in the mortality based income world, I believe there is plenty of room at the table for both CGAs…
Under Annuitized Households an Epidemic
My local paper, the South Florida Sun Sentinel, ran in depth coverage at the end of last year regarding the Hidden Hungry, in an article by Diane C. Lade about food insecurity issues and poor diets facing elderly populations in South Florida. While many reasons were cited for this, the underlying reason was poverty. In South Florida, older age residents as a percentage of the overall population are skyrocketing. As…
