Thread comments on deleted original question devolved into discussion of whether or not a person not working could make IRA contributions.

[LostDollar]

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My original question about an annuity carrier and flexible premium product for accumulation for an 80 year old to be funded with Roth IRA contributions over a period of 3 years was ignored. I have deleted the question and several of my responses in the thread since I was not getting useful replies.

I have just remodified the header to reflect the actual discussion which has gone on in the thread.

 

[Allen Trent]

Do you have earned income from W2 or self employment? If not, you wont be able to make Roth contributions

 

[Allen Trent]

This is disappointing as I am having to defend my right to ask the question rather than obtain an answer to it.

And I have to to bury the question in reams of explanation and justification as to why I need the particular product.

honestly not following.

I am just asking if you have W2 or self employment income. If so, you can make Roth contributions. If not, you wont be able to

I thought your post was asking about Roth, so that is why I am asking, not trying to be nosey.

Sorry if I am not following that part

 

[Allen Trent]

No.

OK. So that means Roth for tax free not an option.

Non qualified will be only option if you want flex premium FIA, but only means taxes owed on any gains in contract at death or when you take money out.

 

[Allen Trent]

This purchase, or its payments, will be made with qualified funds.

I am still seeking an answer to the question as I asked it originally.

Sorry to beat a dead horse, are you saying you plan to do some sort of rollover of existing qualified funds into a Roth?

Originally, your post said "I anticipate being able to make some ira contributions the next three years. I would like to gather up $10K-$18K in a Roth annuity for legacy purposes for 2-3 people"

So, I continue to focus on you saying you want to make contributions of new money, not rollovers or conversions of existing qualified funds.

 

[Allen Trent]

Yes, that is exactly what I said. I need some annuity information.

I understand the "better" reason to use an FIA is as a delivery vehicle for an income rider. However my overall life situation at this time suggests that I need to use a Roth qualified annuity as a substitute for a small FE life insurance policy to achieve another goal I have in mind.

I would like to obtain a small framework of AM Best A, A+, or A++ carriers and products that I can evaluate and make a choice from.

I am not finding the site you have recommended as a resource at other times to be particularly helpful for this search. The carrier selection is limited and, with the exception of one I have already identified, I find no flexible premium options. That may mean I have to reconsider and look at a single premium for this purchase but before I give up planned income rider purchase money to do that I want to know I have seen a reasonable range of choices and that (going single premium) is the wisest course of action for my purpose.

I am back in the situation of not being able to get much agent help for this, either evaluation or sale, because of the size of the purchase I have. I have one chance to do this right for my set of finances.

I am looking for a bit of help and guidance here. I have 4-5 months to sort this. I am very, very tired of the pressure of making annuity purchases right at the edge of time requirement and I would like to get this in place more smoothly.

again, I am not trying to be difficult.

you said you have no earned income from wages or self employment but at the same time you say you aniticipate being able to make some IRA contributions the next few years. It isnt possible to make contributions without earned income from wages or self employment. Even if you find a carrier to accept your contributions as you are looking for, the IRS will come back around & tell you that you make excess contributions you weren't eligible to make. you will then incur carrier surrender charges, lost interest & any IRS penalties for making contributions you were not supposed to.

I know I am not answering your core question as there really are few, if any carriers that offer small flexible contribution plans & if there are, almost no agents offer them or know anything about them as there is little to no money for the agent to make, but expose themselves to suitability & legal responsibility. I am not an agent that sells product, so I cant help you there.

I am just trying to make sure you are not trying to do something that will backfire later if you are trying to make contributions you legally cant make.

 

[annon123]

As others have said - you can roll over other retirement funds into a Roth (and pay taxes on that money when you roll that money over so it will raise your income that year - see note on SS below and increase your taxes now) but without earned income (eg wages from work of some sort regardless of whether or not they are W2, 1099 in the various contractor, etc. versions, or self employment) you can not contribute to a Roth (or regular IRA or other formal retirement fund).

If you choose to play the fake employment game (I'll leave the ethics and legality of that to you to figure out), and pretend you earned X amount, paid in cash, while self employed (I presume you will be claiming the max you can contribute to a Roth) then you can contribute to the Roth in the amount of the fake income. BUT the costs may be more than you'd gain with that money in a Roth. You have to file your taxes for being self employed and pay all those taxes, employer and employee SS, Medicare, etc. But again, be aware that the "cost" of doing it that way may well mean you will never gain back what you paid in taxes, etc, on that fake income by having the money in a Roth. If you claim fake income from 2024 it is not too late to contribute to the Roth for 2024.

You may also have another "penalty" using the fake income route AND for rolling over retirement fund money to a Roth (as that raises your current income) depending on what your combined SS and money from retirement accounts currently is. Check to make sure what this will do to IRS taxes on your social security and importantly what it will do for your medicare B and D premiums in 2 years as the look back for those premiums is what earned two years ago prior and it is based on your income then (you can file a change of circumstances form if at the time your premiums would have the higher income penalty added you now are under that income level).

Playing games like this is not straight forward, has risks and has actual, real money costs. Even rolling over real money you already have in a retirement account has costs. Make sure you understand all the financial, tax, and premium consequences of doing this before you act. Then do a cost benefit analysis of what will be left after all your costs vs potential payback of the money in a Roth.

I would not recommend playing these kinds of games... but then again I am not you and it is not my money involved.

 

[LostDollar]

As others have said - you can roll over other retirement funds into a Roth (and pay taxes on that money when you roll that money over so it will raise your income that year - see note on SS below and increase your taxes now) but without earned income (eg wages from work of some sort regardless of whether or not they are W2, 1099 in the various contractor, etc. versions, or self employment) you can not contribute to a Roth (or regular IRA or other formal retirement fund).

If you choose to play the fake employment game (I'll leave the ethics and legality of that to you to figure out), and pretend you earned X amount, paid in cash, while self employed (I presume you will be claiming the max you can contribute to a Roth) then you can contribute to the Roth in the amount of the fake income. BUT the costs may be more than you'd gain with that money in a Roth. You have to file your taxes for being self employed and pay all those taxes, employer and employee SS, Medicare, etc. But again, be aware that the "cost" of doing it that way may well mean you will never gain back what you paid in taxes, etc, on that fake income by having the money in a Roth. If you claim fake income from 2024 it is not too late to contribute to the Roth for 2024.

You may also have another "penalty" using the fake income route AND for rolling over retirement fund money to a Roth (as that raises your current income) depending on what your combined SS and money from retirement accounts currently is. Check to make sure what this will do to IRS taxes on your social security and importantly what it will do for your medicare B and D premiums in 2 years as the look back for those premiums is what earned two years ago prior and it is based on your income then (you can file a change of circumstances form if at the time your premiums would have the higher income penalty added you now are under that income level).

Playing games like this is not straight forward, has risks and has actual, real money costs. Even rolling over real money you already have in a retirement account has costs. Make sure you understand all the financial, tax, and premium consequences of doing this before you act. Then do a cost benefit analysis of what will be left after all your costs vs potential payback of the money in a Roth.

I would not recommend playing these kinds of games... but then again I am not you and it is not my money involved.

I don't believe I ever said I planned on using "fake income" to make IRA contributions.

I simply said:

I anticipate being able to make some ira contributions the next three years.

 

[annon123]

I don't believe I ever said I planned on using "fake income" to make IRA contributions.

I simply said:

Yes I know you never said you were planning to use fake income. I was just mentioning what I know several people were doing in order to keep contributing. From what you had been saying it didn't sound like you were working nor planned to work (which might not be what you meant) and if you are not working you can't contribute.

 

[LostDollar]

" .... if you are not working you can't contribute."

That is not true.

I made a statement I was going to make some ira contributions, and asked about an annuity carrier and one of their annuity products.

You and Allen have ignored my question and twisted it into a critique of whether or not I can make IRA contributions. I can and I don't appreciate the redirecting of the thread.