Retire on renewals + avoid self employment

[DayTimer]

Broker Lawsuit Against Ohio National Could Be ‘Just The Beginning’

Is there anything written into our appointment contracts that would allow this? Unless it is explicitly stated that the company pays first year commissions and trails at its pleasure and discretion, it is hard to see Ohio National or any company prevailing. And if it does prevail, then no contract for appointment with any carrier is worth the paper it is printed on because any company could then choose to stop paying sales compensation for any sale at anytime, including first year commissions on pending business.

 

[PCBI]

PCBI, see how that works for you when renewals drop to $0 because of law changes and old policies no longer being relevant. Stuff happens. Money is a good insulator from all but health issues and can lessen the load of those - but try it and report back how it works.

I'm happy living in a tent in the woods. Unfortunately, would be sleeping by myself as wife won't go there (for long).

Income is 3,000.00 a month without the 1,000.00 a month renewals. That would b ok if u needed 30,000 in retirement. Please get ur calculator out since ur math is a bit skewed

 

[PCBI]

PCBI, see how that works for you when renewals drop to $0 because of law changes and old policies no longer being relevant. Stuff happens. Money is a good insulator from all but health issues and can lessen the load of those - but try it and report back how it works.

I'm happy living in a tent in the woods. Unfortunately, would be sleeping by myself as wife won't go there (for long).

The wife works right? lol

 

[VolAgent]

Income is 3,000.00 a month without the 1,000.00 a month renewals. That would b ok if u needed 30,000 in retirement. Please get ur calculator out since ur math is a bit skewed

And you are ok living off $30,000 a year in retirement?

 

[PCBI]

This is why I like building my AUM business on the side. It has a lot more resale value and it wont go away right away at retirement. Now if you build your business on mortgage protection and FE, there is not much value at retirement. If you build your business with cash value life insurance, again you have options in retirement. You can slowly work less and less and keep your renewals for a long time. Or your business will have some value even if you can't transfer the contract or the company pulls an Ohio National on you.

12% renewals FE 10 years
14% renewals Cancer Plans
7%. renewala Dental Plans
15% renewals MAPD plans

If u have a plan to 62 then a whole lot mire diversity income comes into play including ur SEP IRA or savings making 2% if needed.

SEP
Renewals
Savings %
Reverse Mortgage
Annuity
Social Security

 

[PCBI]

And you are ok living off $30,000 a year in retirement?

Like I said, some have different numbers to calculate. I gave that as an example thats its very doable for a single guy. Take a couple with with 2 incomes and double that. If the wife played house all those years....

just keep working

 

[scagnt83]

12% renewals FE 10 years
14% renewals Cancer Plans
7%. renewala Dental Plans
15% renewals MAPD plans

If u have a plan to 62 then a whole lot mire diversity income comes into play including ur SEP IRA or savings making 2% if needed.

Out of curiosity, how long have you been an agent, and how long do you have until retirement?

 

[PCBI]

best to try to find a tax preparer that has worked with retired insurance agents that you might know. They may have experience and know of ways to offset by continuing to make retirement plan contributions or something. I have spoke to a few agents whose CPAs took the aggressive position & 1 court case or IRS ruling to not report it on a Schedule C. But they realized if audited they may have to pay. Many of the retired agents in the company I work for are irate when they file their 1st tax return because they believe the company should be issuing a 1099R like would happen for people with retirement accounts, but the agents don't realize it is mandatory by IRS--here is the verbiage I have from the IRS regs about former insurance agents (1st part is about extended earnings payments that many PC agents receive & bottom is more about life & annuity renewals


Insurance agent, former. Termination payments you receive as a former self-employed insurance agent from an insurance company because of services you performed for that company are not reported on Schedule C or C-EZ if all the following conditions are met.

• You received payments after your agreement to perform services for the company ended.
  
• You did not perform any services for the company after your service agreement ended and before the end of the year in which you received the payment.
  
• You entered into a covenant not to compete against the company for at least a 1-year period beginning on the date your service agreement ended.
  
• The amount of the payments depended primarily on policies sold by you or credited to your account during the last year of your service agreement or the extent to which those policies remain in force for some period after your service agreement ended, or both.
  
• The amount of the payment did not depend to any extent on length of service or overall earnings from services performed for the company (regardless of whether eligibility for the payments depended on length of service). (No—both our 50/50 & 5 yr do have length of service)
  
  
  Insurance agent, retired. Income paid by an insurance company to a retired self-employed insurance agent based on a percentage of commissions received before retirement is reported on Schedule C or C-EZ. Also, renewal commissions and deferred commissions for sales made before retirement are generally reported on Schedule C or C-EZ.
  
  However, renewal commissions paid to the survivor of an insurance agent are not reported on Schedule C or C-EZ.
  

Doesnt seem possible to fall in category 1 if ur payment was from your corporation not an insurance company. I assigned all my commissions to my SS# and ahut down an S Corp to simplify things to Uncle Sam in 2019. All 1099s directly to me not corp anymore.

 

[PCBI]

Agents who plan on retiring off their renewals are foolish. Especially senior market agents. Aren’t some of those customers that you sold older than you? Don’t the renewals end when the sigh up elsewhere or die? Do you want your retirement income to dwindle down each year you get older and less able to work your book?

If you think working your huge base of Medicare clients is “retirement” you are foolish. It’s hard work. And once you quit working it and stop working (really retire) it will definitely pay huge money into your retirement for a number of years. But it will get smaller every year. And eventually become minute.

Agents with brains retire right. They save for retirement. They sell themselves an annuity every year. Or they invest in the market. Or they buy rental properties. Or do something that makes sense so they can retire in style someday. Putting all your eggs in the “retiring off your renewals” or the even crazier one “retiring off building a down line” is fools gold.

Renewals into retirement is icing on the cake. Foolishness would be to not have renewals. I have seen companies go into receivership like Penn Treaty and National States taking out renewals, and I would advocate diversity of carriers and products. But, the beauty of being an insurance agent into retirement is u never really retire and the money coming in should be supplimentary to a well planned retirement imo.

 

[scagnt83]

out of curiousity
why?

Because you shared your plan, but you did not share your time frame or current reference point. Both are important aspects in that scenario. Hence my curiosity.