Last week, I started the FWF conversation talking about qualified money and IRA maximization. The thing about IRA max is that it is a leverage play – a planning tool while living and insurable. (remember, this conversation is for non-Roth accounts.)
But, what happens if the planning windows is slammed shut because the IRA owner is unable to pass underwriting?
Well, they can take a pivot and fund their beneficiaries’ policies in advance. Utilizing a similar strategy where they take the distribution and purchase policies for their non-spouse beneficiaries.
The X’s and O’s should include a discussion about the possibility gifting and any tax implications, but you can certainly “prepay” a policy while the IRA holder is still alive yet uninsurable.
Do you have questions about gifting or taxes? Our Advanced Markets team can lend a hand. Please contact either Justin Fox (my internal sales partner) or me to help you connect with them.
So, what is the IRA owner dies leaving the account to their children?
They inherit the qualified money along with the SECURE Act liquidation requirements.
Long and the short of this is that the non-spouse beneficiary has a 10 year window to “empty the entire account”.
This creates an opportunity for Asset Care to be funding using the annuity funded whole life (Asset Care) approach or by recurring premium. What’s right?
It all depends on the path the beneficiary wants to take.
And, remember this 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. Which makes this a very real situation …
So, the next time you have an inherited IRA situation occur, think about IRA max, Asset Care, and contact either Justin or me.
If you need more information or have any questions, please contact Justin Fox at justinfox.isp@oneamerica.com or on his toll free direct line at (844) 658-3725.
As always, thanks for taking time for me.
In the February episode of Coffee Break, we shared with you the NEW OneAmerica Financial as well as a navigational overview of the updated OneAmerica.com website. 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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