Ohio National broker pitched VA trades as 'infinite banking' per FINRA

[Allen Trent]

One would need over $5 million in NQ SPIAs before it could begin to affect Social Security taxation

While I understand & agree with the premise, that is not accurate as taxation of SS will be impacted based on the rest of their income. Just like saying it would take $10M of CD values paying .3% to impact SS taxation. In reality, a client already on the cusp of SS taxation can be impacted by exclusion ratio SPIA checks, other distributions, bank interest & even tax free municipal bond income

The problem I have with VAs is that they are still subject to market volatility and income taxes if in a qualified plan/IRA. It won't guarantee the plan.

In today's world, I am seeing the majority of VA sales are now RILA products where the client can choose floors & buffers while at the same time eliminating the bulk of the high costs of VA that have been the subject of scrutiny & ridicule(whether deserving or not)

 

[DHK]

While I understand & agree with the premise, that is not accurate as taxation of SS will be impacted based on the rest of their income. Just like saying it would take $10M of CD values paying .3% to impact SS taxation. In reality, a client already on the cusp of SS taxation can be impacted by exclusion ratio SPIA checks, other distributions, bank interest & even tax free municipal bond income

Which depends on setting proper expectations and having done a complete fact-find.

I can only control what I can control, but if the client omits parts of their situation, I can't be held responsible for that.

If they are continuing to work or they have rental income or (fill in the blank of whatever hypothetical situation)... yes, it can have an impact.

At least their retirement savings doesn't have to.