Suggestions for Annuity

[pfg1]

I have a prospect that is 53, he's interested in putting some $ into an annuity yearly, for "x" amount of time. Lets say 10-15yrs. He doesn't know how much he'll be able to contribute for sure, this year he could probably do $10k. Next year hopefully the same, but beyond that he doesn't know. He felt like he'd at minimum be able to do $100/mo on worst case up to who knows - lets say $1000/mo max, could be more. (Self employed construction contractor, big swings in income) He has $0 in retirement income right now, all gone keeping his business and family afloat during bad economy.

Any suggestions on some products/companies to look at? He'll be using after tax dollars ...can't go a Roth, he made too much this yr. (Most of his income is going to pay off debt from a terrible past couple years).

He prefer's no risk, so FIA if there is one, would probably be a good fit.


Thanks!

 

[jmhalvo]

I have a prospect that is 53, he's interested in putting some $ into an annuity yearly, for "x" amount of time. Lets say 10-15yrs. He doesn't know how much he'll be able to contribute for sure, this year he could probably do $10k. Next year hopefully the same, but beyond that he doesn't know. He felt like he'd at minimum be able to do $100/mo on worst case up to who knows - lets say $1000/mo max, could be more. (Self employed construction contractor, big swings in income) He has $0 in retirement income right now, all gone keeping his business and family afloat during bad economy. Any suggestions on some products/companies to look at? He'll be using after tax dollars ...can't go a Roth, he made too much this yr. (Most of his income is going to pay off debt from a terrible past couple years). He prefer's no risk, so FIA if there is one, would probably be a good fit. Thanks!

if he makes too much for a Roth, then why not a SEP? Yes, pay off the debt but then start a SEP so in a good year he saves big on taxes.

 

[pfg1]

Yes, he could do a SEP. Maybe that is the route he will go. Mainly trying to figure what products are available to put $ into. Most of what I have done are rollovers with lump sums, not smaller annual contributions. Thx!

 

[jmhalvo]

Yes, he could do a SEP. Maybe that is the route he will go. Mainly trying to figure what products are available to put $ into. Most of what I have done are rollovers with lump sums, not smaller annual contributions. Thx!

that is a great question where FIAs are concerned

 

[scagnt83]

SEP would be an easy way to go here. He is limited to 25% of Income, so he should be fine with $10k. (he can still make a 2013 contribution until April 15th)

The SEP would be much smarter than doing it after tax.

Technically, if he planned to do $10k after tax, then he could do around $12k-$13k in a SEP on a pre-tax basis (since it would reduce his taxes by approximately $2k-$3k). Or of course he can just do the $10k and pocket the tax savings.

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that is a great question where FIAs are concerned

Midland would be a great choice. Lots of flex-premium products and strong Caps. Plus they accept SEP funds. GA is another good option. I believe WNL accepts SEP funds too, and they have some good flex-premium products.

 

[Norwayguy]

SEP would be an easy way to go here. He is limited to 25% of Income, so he should be fine with $10k. (he can still make a 2013 contribution until April 15th)

The SEP would be much smarter than doing it after tax.

Technically, if he planned to do $10k after tax, then he could do around $12k-$13k in a SEP on a pre-tax basis (since it would reduce his taxes by approximately $2k-$3k). Or of course he can just do the $10k and pocket the tax savings.

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Midland would be a great choice. Lots of flex-premium products and strong Caps. Plus they accept SEP funds. GA is another good option. I believe WNL accepts SEP funds too, and they have some good flex-premium products.

If the client is going to do 10k per year then don't limit yourself to just flexible products. You can also look at single premium Yes more work every year but opens up more options.

 

[scagnt83]

If the client is going to do 10k per year then don't limit yourself to just flexible products. You can also look at single premium Yes more work every year but opens up more options.

Good point. There is nothing that says he cant just do a new product each year. There arent too many products he would be excluded from at $10k.

Personally, even with a flex product I encourage clients to consider a new policy if Caps/rates are higher.

But with a flex-prem product it does give you both options each year, which is nice.

 

[jmhalvo]

Good point. There is nothing that says he cant just do a new product each year. There arent too many products he would be excluded from at $10k. Personally, even with a flex product I encourage clients to consider a new policy if Caps/rates are higher. But with a flex-prem product it does give you both options each year, which is nice.

just do GA Am Valor with bonus first 3 years and currently great caps

 

[scagnt83]

just do GA Am Valor with bonus first 3 years and currently great caps

If I went with GA I would opt for the American Legend 3. A 2% bonus isnt worth lower caps and less crediting options imo.


If you want a bonus:
Midland currently offers a 45%/50% PR with a 10% bonus.
Or you could go with a non-bonus product and get a 6.75% Cap

NWL currently offers a 95% PR w/ 0.35% Spread, and a 2% bonus for 5 years.

 

[jmhalvo]

If I went with GA I would opt for the American Legend 3. A 2% bonus isnt worth lower caps and less crediting options imo. If you want a bonus: Midland currently offers a 45%/50% PR with a 10% bonus. Or you could go with a non-bonus product and get a 6.75% Cap NWL currently offers a 95% PR w/ 0.35% Spread, and a 2% bonus for 5 years.

you're probably right, but I would point out its 2% per year for 3 years.