Self-directed IRA to FIA?

[aus0417]

I have been searching for information about direct transfers vs. rollovers online but I have been unable to find anything clearly definitive. Can a 55 year old man transfer money from a Self-directed IRA into an FIA without being penalized?

 

[Josh]

As long as it's a direct transfer, you should be in good shape. Do you have a client and the FIA carrier picked out or is this more of a generic question?

Carriers can be really helpful with this stuff too.

 

[Sales71]

If it like kind it should be okay. Maybe u can also call the fia company and see what they say.

 

[scagnt83]

Yes. You just have to indicate that its qualified money on the IA app.

 

[aus0417]

As long as it's a direct transfer, you should be in good shape. Do you have a client and the FIA carrier picked out or is this more of a generic question?

Carriers can be really helpful with this stuff too.

Yes...I have a life insurance client who I found out is hoarding most of his money in cash because he is afraid of the stock market and he was complaining about the .5% interest rate he is earning. He also has money in an IRA but I'm not sure if it's in the market or what but I mentioned the benefits of FIA's to him and he was really interested. Just wanted to check on this before we go any further. I have not picked out a particular carrier yet because I'm not sure if he wants an LIBR or to pull the money out in 10 years.

 

[pcwest]

These are hard times for savers... They are confused.

 

[ScottLFB]

It's going to be a Direct Transfer, not a Rollover because it's not in a Qualified 3rd Party Administrative Account. A 55yr old can Transfer the funds into a FIA within an IRA, but you have to figure out what he's looking to do with it. You mentioned not knowing if he wants a LIBR or not, guarantees and ease of mind are what's selling these products right now. Do you need a flexible premium product since he's only 55 and may want to still contribute to the policy or is he going to create a 2nd IRA outside of this Transfer to make future contributions to? In the low rate environment and not knowing whether he wants a LIBR or not, you may want to look at something with a Bailout feature since you can only guarantee him 1st yr rates with most of these FIAs.

Good luck and give me a call if you have further questions.