Two weeks ago, I shared an idea for low hanging fruit using nonqualified deferred annuities for clients under the age of 86. Another funding source for long term care premiums that I mentioned was using qualified money such as an Individual Retirement Account (IRA) or proceeds from a 403(b) or 401(k) plan.
Here is the first important point that I must make. When we are discussing the use of qualified money as a funding vehicle for an Asset Care policy, we are referring to non-Roth retirement plans.
Another important point – generally, the minimum age for the strategy is for a client that is 59 ½ or older. However, if an inherited IRA is to be utilized, the client can be younger. To learn how this works, check out the Fridays with Fisher post from October 27, 2023.
A third point, there are several approaches to utilizing qualified money to fund a policy but only OneAmerica offers a turn-key solution. And, that solution can be used for either an individual or a joint Asset Care policy with any plan design that can produce either a limited pool of benefits or an unlimited stream of benefits.
One last point, there are a few ways to use qualified money as a funding source and a few of our peers encourage placing the money in a single premium immediate annuity and directing those proceeds to the insurance policy. Certainly, everyone can do that but there is a loss of control using that approach. With the OneAmerica strategy, there is no annuitization providing more control of the strategy.
Consider the opportunity that you have …
According to the Congressional Research Service, the Federal Reserve’s Financial Accounts of the United States report said that as of December 31, 2022, there were over $37.8 trillion held in US retirement plans and accounts. $26.3 trillion was in employer sponsored plans and $11.5 trillion sat in individual retirement accounts.
And, according to Fidelity, through the second quarter of 2023, there were more than 14.3 million IRAs.
The Investment Company Institute in a report from 2020 shared that 49 percent of retired households owning traditional IRAs in 2019 did not take withdrawals in tax year 2018. The most common amount withdrawn was the required minimum distribution, or RMD (in 2018, this was the amount that traditional IRA owners must withdraw after turning 70½).
Want more information about this or other ideas? Contact either Justin Fox, my internal, or me directly. You will find our contact information below.
Last week, we released a new episode of Coffee Break where we shared with you two NEW consumer pieces talking about planning. If you have not viewed it, please take a minute to see this week’s episode.
Jumpstart your year with the Million Dollar Annuity Strategy.
It is easy to do … review your book of business and identify your clients who are over 75 and own annuities that are on the sideline and have been earmarked for an emergency. This is a big thing that can make a difference in preserving assets, control, dignity, and a legacy when an extended care event occurs.
This is what the million dollar annuity strategy is all about. The transformation of tax-deferred money into tax-free distributions for long term care. Learn more about it at https://fridayswithfisher.com/million-dollar-annuity/.
My “big ask” of you for the million dollar annuity strategy is to identify 3 or 4 annuity owners 75 or older who might be viable candidates for our leverage strategy then give us a call.
Fridays with Fisher 
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