92 Year Old Options?

[2ripannuities]

Hello all! I'm not new to the business (over 9 years now) but new to this forum. Frankly I never new it existed until a buddy of mine said to check it out.

Anyways I'm stumped for once. I have a 92 year old client that is dead set on replacing her annuity with another. I guess someone came out and scared the old lady with the An Act ($250k Guarantee per policy). She currently has a 500k ira annuity without surrender that she is taking her min distribution out of. I've already explained the benefits of keeping it but she's dead set on wanting another.

I've searched everywhere and can't find a product other than Liberty Bankers Life 1 year Banker program that pays 1%, not a fair replacement of her current 3.25% fixed.

Is there anything out there I can place this lady without a heavy tax burden? The agent that went out recommended to cash out the annuity and place the funds under her daughter's name (who is the sole beneficiary) - I laughed and explained the tax consequence, what a tool!

I just need some help on this one. I know I'm new to the forum but not new to this business. Any suggestions or structuring recommendations would be great.

Thanks Everyone...I'm glad to now be part of this forum.

 

[iceco1d]

Sometimes there isn't a good answer to a situation, and this is one of those cases.

You either have to get her to understand that what she wants to do is going to likely cost her money in terms of interest, and some liquidity with new surrender charges, OR get her to be comfortable with the risk of being over the state guarantee fund.

It's like when a client wants to take 10% a year out of their accounts at age 62. What they WANT to do, and what is BEST for them, are not always the same thing. Sometimes you just have to tell them that.

 

[0b1kanobee]

What's her reason for wanting to replace it?

This may also be a case for a stretch IRA but I dunno. Not enough of an expert on that but you can read about it here and other places. Whether there is any commission in it, I don't know that either and the person I would call to ask about it is not working today.

Also you have the death benefit to consider. There are products out there with some pretty fancy death benefits but with her age and other factors which I'm not aware I can't help much either at this time.

How To Stretch Out An IRA - Forbes.com

Here is a slide show version as well. Pretty interesting stuff:

Stretch IRA Trust Slideshow@@AMEPARAM@@http://static.slidesharecdn.com/swf/ssplayer2.swf?doc=zdocumentsandsettingswardmydocumentsattorneyestateplanningseminarsadvisorseminars2009februarystretchiratrust-090225105448-phpapp01@@AMEPARAM@@zdocumentsandsettingswardmydocumentsattorneyestateplanningseminarsadvisorseminars2009februarystretchiratrust-090225105448-phpapp01

 

[Mark]

After reading the thread on that Calf Agent that sold that 83 year old an annuity, I would be scared to replace it.

 

[Mr. Bill]

After reading the thread on that Calf Agent that sold that 83 year old an annuity, I would be scared to replace it.

Especially without talking with the daughter and the woman's attorney, and CPA.

 

[Norwayguy]

Is there anything out there I can place this lady without a heavy tax burden? The agent that went out recommended to cash out the annuity and place the funds under her daughter's name (who is the sole beneficiary) - I laughed and explained the tax consequence, what a tool!

I'm glad you set her straight on that other agents advice and explained the taxes she would pay taking the money out of the IRA not to mention moving the money to the daughters name as well as the consequences of moving that much money to the daughter.

Its one of those times to explain it can't and shouldn't be done.

 

[2ripannuities]

After reading the thread on that Calf Agent that sold that 83 year old an annuity, I would be scared to replace it.

What happened with this?

------------------------------------------

I think the general consensus here is to just explain it can't be done and get her to feel more comfortable with the state guarantee fund. I'm wondering if I can call the current company and have them split the policy into two?

I already have her daughters business, sold her a retirement gold with AE back in 2009 along with some LTC. I'm sure when the 92 year old passes I will transfer that money back into an annuity for the daughter who is 67.

Thanks again for all the help and thanks 0b1kanobee for the info on the stretched IRA trust...I knew about these but like yourself am not too familiar with them so I'm going to conduct some more research myself as well.

 

[xrac]

Especially without talking with the daughter and the woman's attorney, and CPA.

Both Mark and Bill have legitimate concerns.

 

[padthaiforlunch]

At her ripe age, I'm surprised there's anything left after RMD.

 

[2ripannuities]

At her ripe age, I'm surprised there's anything left after RMD.

She lives with her daughter, no mortgage, doesn't drive (only bc her daughter won't let her) and lives very frugal, they own nothing new. She's taking out her RMD but she started with over 1 million. The guy who wrote the initial policy was my mentor (now passed) so I'm taking over his book.

I have a meeting with them tomorrow, too bad there wasn't more out there for her.