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Turning 65? Income and Medicare Issues Update July 29 2023

Medicare-Fire-Life Insurance

Casualty-Lifetime Income Programs

California Licensed Agent and Agency Owner

Call Marc at (530) 559-1214

Retirement Income for Lifetime

 


 

Lifetime Income versus growth Does it really pay to have lifetime income over growth YES.. udpate July 24 ,2023

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Hello!

Marc here from Money Matters. I recently gave a seminar covering a way to earn 10, 12, 14% a year for life- guaranteed or more!

It is simple to understand and from one of the country’s best companies.

“Nationwide is on your side” is their motto.

Had you had $500k in the stock market from 2000 to 2015 retired and withdrew $30,000.00 a year, you would be out of money by 2015!

LOOK:

 

 

So much for using the market for retirement.

With the Bonus Income for life, you could earn double digits or more (depending on your age) and never run out as those returns are paid for life!

You heard that right. Double digit returns for life.

A 59 year old waiting until age 70 would get 13.41% APR for life on what was put in starting at age 70.

A 73 year old would get a minimum of 15.22% APR starting at age 80. If he or she wanted immediate income for life as soon as they deposited their money they would get 8.31% starting at age 74!

Whatever is not paid out is returned if you pass. Even better, the proceeds are guaranteed and 100% principal protected. Nationwide also guarantees if the market goes up by a predetermined amount you could get even more. But never get less than what is guaranteed. So participate in up markets but never lose a dime in down ones.

No medical exam or questions. Easy to open. I can run you YOUR income for life figure easily by knowing your age only. See what you would get. Today’s interest rates historically won’t last as the FEDS themselves predict rates will come down so lock your in before they do.

No fees to set it up and Nationwide puts in 20% more of what you put in as soon as we open the program!  Put in 100K, Nationwide adds 20% to the income base immediately.

Let me run your income for life figure today.

Call me (530) 559-1214

Voted Best financial advisor 2021 and with California Insurance License #OL34249.

Financial columnist for 5 newspapers with radio show MONEY MATTERS on 67 radio stations nationwide.

 

 

 

 

 

Disclaimer: This is not a recommendation to buy or sell any securities. May include forward looking statements. Past performance is not a guarantee of future results. No one can predict market movements at any time. Investing involves risk. You can lose money, including total loss of principal. Consult your tax advisor for all income tax related questions. Stop-loss strategies utilize stop orders which turn into market orders, so they may not limit losses. Dividends are not guaranteed and may be cut or eliminated at any time and may not prevent losses. Annuities are not FDIC insured and are insured and guaranteed by the underlying insurance company only. Early withdrawal penalties may apply. Management fees are not allowed once funds are moved to an annuity. Annuities may or may not be suitable for all investors. Indexed funds attempt to track the underlying index but are only a proxy for that index and may or may not track the index exactly. 

Special note: For those wishing principal guarantees and possible market upside participation, you may consider a fixed indexed annuity. Purchased annuities have no management fees and are 100% principal protected. These I have found are desired by those that cannot tolerate any losses whatsoever, or are extremely sensitive to any kind of loss. They also will participate (rise in value) if the market (S&P 500) rises between the applicable time periods as set forth in the contract, so they have a minimum guaranteed interest of 7.2% over the life of contract OR you get a portion of the increase in the market. The greater amount of the two is what they guarantee and always 100% guaranteed to get at LEAST all your principal back and a MINIMUM of 7.2% on the entire balance OR the market upside, whichever is GREATER. The best of both worlds. Contact me for details. 

 

 

NOTE: Money Matters classic piece     (Classic pieces are one step above and recognized as breaking news casts with the hottest of topics illustrated in a way that makes them  in high demand and talked about. The highest response metrics are observed by a minimum of 200% for all "classic" pieces).


 

 

 


 

Bonus Lifetime Income July 5 2023

With the market in ongoing turmoil for well over a year now, and no way of telling if the recent rally in the first quarter of 2023 will stick, the annuity option has been a hot topic here on Money Matters.

Annuities are contracts between you and a large insurance company that states the insurer agrees to pay you over a period of time an amount based on the terms stated in the contract.

There are many variations on annuities and I have covered the few I recommend for many clients in past Money Matters radio and newsprint. I often use my own annuity names when describing these to better illustrate their advantages.

Today’s flavor of the month is what I call the “Bonus Income for Life Annuity”.

Unlike Participation Annuities that give you a portion of the stock markets increase measured over time, and Triggered Annuities, that promise a minimum and specific percentage return should certain things happen in the markets, Bonus Income for Life Annuities add a bonus payment to the amount a customer puts in as soon as the papers are signed, then pay a fixed lifetime income.

For illustration purposes, I always draw on real life annuity products that actually exist when describing annuities and today is no exception.

Similar to other income for life products, the Bonus Income for Life Annuity insures the customer won’t outlive their money. The payments are for life, even if it’s over and above the amount you put in. The bonus referred to means the insurer adds a bonus to the amount you put in at the moment you open the annuity.

Specifically, in this annuity, suppose you put in $100,000.00. The day the papers are signed, the insurers ADDS 20% to what you put in and subsequently would credit this account $120,000.00 immediately.

Yep, you read that right. 20% is added to your deposit.

You can’t then close the annuity and remove 120K obviously, but the 120K is there and used to calculate your lifelong payments.

You leave the money in the annuity until the day comes that you decide to “pull the trigger” and begin your lifetime payments. The payments will then continue until you die. If you want to add a spouse or significant other, you can, which means payments continue until both of you die.

Once pulled, you cannot “un-pull” the payments which means once you decide to start payments, that’s it.

How much will you get each year?

That depends on your age when you open the contract and your birth gender. The younger the age, the lower the payments. This is because the insurer is paying you for life, so the insurer rightly adjusts the payments assuming it will have to pay younger applicants for a longer period of time.

The payments can be surprisingly large. I ran one on myself at age 67, male, and if I waited only 2 years to pull the trigger at age 69, hypothetically they would pay me 8.01% on my original deposit every year for the rest my life.

Not bad.

Wait 4 years and the payment rises to 9.44% for life and if I wait 6 years, I get an 11.33% annual percentage until the day I die.

I ran one for a 71 year old male and the yield is even higher. If he waits 3 years, he gets 9.46% APR for life and waiting 5 years nets him an annual return on his money of 11.32%. Waiting 9 years gets him a whopping 17.22% on his original deposit for life.

Upon death, what hasn’t been paid out is returned to the estate and both the payments and the returned amount to the estate can also increase as the principal is tied to variety of stock indexes.

As with all the annuities covered here on Money Matters, there is no downside risk, you can withdraw a certain amount a year if needed, early withdrawal fees over the allowed annual withdrawals may apply, and there are no medical tests or preexisting conditions that will affect issuance.

Considering I-Bonds and Treasuries currently yield fairly healthy returns, the annual yields offered by certain annuities can exceed those amounts depending on age and time of investment.

And unlike the I-Bond or short term treasury rates, the annual percentage amount promised will never go down as long as you live. As mentioned, in fact under certain conditions, what you receive every year may even go up.

In conclusion, there may be other terms and conditions that apply and annuities are insured by the underlying insurance company and are currently not covered under the FDIC envelope. If interested, illustrations and the policies can be obtained through any annuity licensed agent or properly licensed financial professional.

“Watching the markets so you don’t have to”

(end)

(As mentioned please use the below disclaimer exactly) THANKS   (Regulations)

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249. (530)559-1214. He was voted best financial advisor in the county 2021.


 

Rolling into an annuity UPDATE 6 11 2023

 

Can I Make More Money If I Roll Over My 401(k) Into An Annuity?     

 

YES  NATIONWIDE INCOME WITH BONUS CAN PAY NORTH OF 10% A YEAR

 

CONTACT ME FOR YOUR PAYOUT PERCENTAGES- THEY MAY BE HIGHER THAN YOU THINK!  (530) 559-1214

28

Ashley Kilroy

Sat, June 10, 2023 at 6:00 AM PDT

 

When you leave a job where you had a 401(k) it’s important to understand what your options are for rolling over your tax-advantaged plan. Cashing out is another option but can result in significant taxes. Many choose to roll their money into a new 401(k) or an IRA, but an annuity is also a viable option. Here’s why an annuity may be ideal for your 401(k) rollover and how to conduct the process.

For more help with a 401(k) rollover, consider working with a financial advisor.

401(k) Rollover Definition

401(k) rollover is when you transfer the money from a 401(k) to another retirement savings account. Doing so allows you to simplify your retirement savings plan in different situations. For example, if you find a new job or retire, you can bring your old 401(k) with you and deposit your money into your new employer’s plan.

On the other hand, you might leave a job for another that doesn’t offer a 401(k). In this case, you might roll over your funds into an individual retirement account (IRA) or an annuity. Similarly, if you find a retirement savings vehicle with better returns than your 401(k), a rollover is also an option.

There are two ways to roll over your 401(k): direct and indirect. With a direct rollover, you provide your new retirement account information to the manager of your current plan. Then, the manager sends the funds to your new account.

Conversely, an indirect rollover means liquidating your account. You’ll receive a check in the mail and must deposit the funds into a new account within 60 days or pay income taxes plus a 10% early withdrawal penalty if you’re under age 59.5 (or 55 if you’re retired). That said you can pocket a portion of the cash and pay the taxes due or keep some of the money if you’re strapped.

How to Roll Your 401(k) Into an Annuity

Putting your 401(k) money into an annuity is another option. An annuity is a contract guaranteeing payments for a specified period of time. Insurance companies accept 401(k) rollovers to fund annuities. Here’s how to handle it:

Make a Plan

It’s recommended to discuss your rollover ideas with a professional. A financial advisor will help you find the best annuity for your unique situation. In addition, they can oversee the rollover to ensure everything is correct.

Choose an Annuity

As with any financial decision, it’s best to shop around. Talk to multiple annuity companies and get the details on each offer. Then, you can compare each plan’s structure and fees. In addition, you can check how financially stable each company is and choose one that gives you confidence.

Communicate with Your Chosen Company

Once you make your pick, communicate with the annuity company. Let them know you want to purchase a contract and roll over funds from another retirement plan. Your financial advisor can also facilitate this communication.

Send Instructions to Your Plan Administrator

Once you’ve acquired the annuity and filled out the necessary paperwork, instruct your 401(k) administrator to execute the rollover. A direct transfer is the easiest way to complete the process.

How Long Does It Take To Roll Over a 401(K)?

401(k) rollovers take varying amounts of time, depending on your situation. Because the process involves multiple parties (namely, you, your old plan administrator, and your new plan administrator), it usually takes several weeks to finish.

In addition, your 401(k) type can impede the rollover. Specifically, traditional 401(k)s often take two to three weeks to roll over, while Roth accounts take longer because they have unique requirements and tax implications.

Remember, you’ll face penalties and taxes if you don’t roll over your funds within 60 days. Therefore, it’s best to stay on top of the process by frequently communicating with all relevant parties and creating a detailed plan before initiating the rollover.

Reasons to Roll Your 401(k) Into an Annuity

 

401k rollover to annuity

Although you can roll your 401(k) into numerous account types, an annuity offers specific advantages, including:

Reliable Income

An annuity provides steady income regardless of economic changes and stock market performance. For example, a $1 million annuity can provide about $70,000 of annual income until you pass away. On the other hand, $1 million in a 401(k) or IRA will last as long as the account produces investment income and your withdrawals don’t drain the fund.

For instance, say you expect $70,000 of annual income from your retirement plan, but stock market volatility causes your portfolio to dip by 20%. Your $1 million nest egg would shrink to $800,000 overnight, and you would withdraw an additional $70,000 for that year’s expenses, leaving you with $730,000 in your account. If the economy continues struggling, you might drain your account within several years, leaving you without an income stream. An annuity avoids this possibility because your income doesn’t depend on the stock market – it comes from the company holding your policy.

Sidestep Longevity Complications

Likewise, a 401(k) can run out of funds if you live long enough. For instance, you might plan to live for 30 years after retiring at 62. However, if you’re going strong at 90, there’s a solid chance your retirement account can’t keep up with the cost of living. In this scenario, you could run out of money even if you maintain the same lifestyle for longer than you intended your account to last. With an annuity, you’ll continue receiving payments year after year, no matter how long you live.

Longer Deferral Option

Current legislation mandates that you take required minimum distributions (RMDs) from 401(k)s, 403(b)s, and IRAs by age 72 (or 73 if you turn 72 in 2023). Otherwise, you’ll owe a 50% excise tax on uncollected distributions. Roth accounts are exempt from this rule because the government has already taken taxes out of your distributions.

Fortunately, you can delay RMDs until 85 with annuities. For example, say you have a Roth IRA with $500,000, a $1 million annuity, and Social Security income. You receive $5,000 monthly between your Roth IRA and Social Security checks and currently don’t need your annuity income. In addition, adding more than a few hundred dollars to your current income will raise your Medicare annual premium by thousands. Therefore, you can delay or reduce your annuity withdrawals to minimize your tax burden and avoid unwanted financial implications.

Tailor Your Plan

Traditional retirement plans usually have cut-and-dried structures. However, annuities offer modifications (known as riders) to suit your situation. For example, you can preempt inflation with an inflation adjustment rider that raises your income by a small percentage each year.

401(k) Rollover Rules

Here are essential rules to keep in mind as you manage your rollover:

  • You have 60 days to deposit the money into a new retirement account if you conduct an indirect rollover. Otherwise, you’ll incur steep financial penalties.
  • If you roll a 401(k) into an IRA, you can’t make a rollover from the IRA into yet another account until a year elapses.
  • Your 401(k) rollover doesn’t count toward traditional IRA contribution limits. However, it will count toward your modified adjusted gross income, which can reduce your Roth IRA contribution limit.
  • You can roll over a portion of your 401(k) and take the remainder as a payout. However, your payout is subject to income taxes. Plus, if you’re younger than 59.5, you’ll pay a 10% early withdrawal penalty. This age limit is reduced to 55 if you’re retired.
  • You typically can retain your 401(k) even if you leave your old job. This option might be best if your new job doesn’t offer a retirement plan.
  • If your 401(k) has less than $5,000 and you leave your job, you must instruct your plan administrator to keep your plan going. Otherwise, they might liquidate your account or roll it into an IRA without your approval.
  • If your 401(k) has less than $1,000, your administrator will liquidate your account and send you a check.
  • Keeping company stock in the original 401(k) is best. If you roll it over, you’ll be liable for net unrealized appreciation Holding the stock in the same 401(k) will help you receive optimal value from the stock when you decide to liquidate it.

Risks of Rolling Your 401(k) Into an Annuity

Annuities can be profitable options for your rollover, but they have specific drawbacks:

  • Annuities can have high fees, especially if you add multiple riders.
  • Annuities have what’s called an annuitization phase during which withdrawals are penalized. So, you usually must wait at least seven years before moving money out of the account. Otherwise, you’ll pay surrender charges.
  • An annuity generally won’t pay a death benefit to your beneficiary if you don’t have a specific rider. Generally, the insurance company absorbs the money in your account upon your death.
  • Annuities usually have lower growth rates than other investment accounts. Therefore, an annuity will likely take longer to reach a $1 million balance than a stock portfolio.

Rollover Tax Consequences

 

401k rollover to annuity

The average 401(k) rollover doesn’t have tax consequences. For example, when you conduct a direct rollover after starting a new job, you don’t touch the funds at any point. Instead, plan administrators handle the transfer, and the IRS isn’t involved.

On the other hand, you have 60 days with indirect rollover before tax implications occur. Specifically, if you don’t finish the rollover within this time limit, the government considers the money received as a withdrawal and will charge income taxes accordingly. In addition, you’ll pay early withdrawal penalties if you’re under age 59.5 and still working or under 55 and retired.

Because indirect rollovers don’t always go as planned, the IRS withholds 20% of all 401(k) payouts. This way, it can extract the tax payment due if you fail to finish a rollover before 60 days is up.

This rule can put you on a tight timeline if you’re shopping for an annuity. Therefore, it’s best to select your annuity before initiating a rollover. Then, you can tell your 401(k) manager to send the check directly to the annuity company. Doing so prevents you from acting as the middleman and gets the money where it needs to go.

Remember, matching contributions on a Roth 401(k) has unique tax consequences when rolling over. Although a Roth 401(k) uses post-tax dollars, your employer’s contributions are pre-tax held in a traditional 401(k). Therefore, your rollover must account for both Roth and traditional 401(k) funds.

Fortunately, you can roll the funds into new Roth and traditional accounts if your new employer offers both types. Likewise, if you’re converting to IRAs, you can use Roth and traditional accounts as needed. However, placing the matching funds into a Roth account will incur income taxes.

Best Practices for Rolling Over a 401(k) Into An Annuity

If you’re considering rolling your 401(k) into an annuity, follow these best practices to optimize your finances:

Understand Annuity Types

Annuities come in fixed, fixed indexed, and variable varieties. Fixed annuities earn a low interest rate, can guarantee payments for life, and won’t suffer capital losses. On the other hand, fixed indexed and variable annuities have higher earnings because they tie gains to stocks and other assets.

However, these annuities might cap gains when the stock market does well or lose value when it dips. Therefore, they are more volatile and usually aren’t eligible for 401(k) rollovers. So, going with fixed is the most reliable option.

Postpone Payments to Increase Income

Like Social Security, your annuity payments usually increase if you delay taking them. For instance, buying a $1 million annuity at 55 and waiting five years will create an annual income of about $90,000. However, buying the same annuity and waiting 20 years for your first payment will increase your annual income to over $200,000.

Don’t Overfund the Annuity

Annuities have specific funding thresholds before providing distributions. For example, your annuity might require $500,000 before you can withdraw payments. That said, $1 over this target doesn’t serve a purpose. So, let’s say you leave your job at age 50 with $250,000 in your 401(k). You’ve also been contributing to a $500,000 annuity throughout your career. Your annuity account has $450,000, meaning you need $50,000 more to fund it fully.

In this case, you can roll over $50,000 from your 401(k) and keep the rest in the account. This option will fulfill your annuity conditions and leave you with a sizable chunk of money to continue investing in stocks, bonds, and more.

The Bottom Line

Rolling over a 401(k) is usually a straightforward process in which your plan manager and new employer handle the cash involved. If you have your new plan information ready, you can have your money sent to your new plan without suffering any tax implications. However, if you receive the money, you have 60 days to get it into a new investment account without incurring tax consequences.

In addition, annuities are excellent options for rolling over if you aren’t getting another 401(k). Annuities offer guaranteed payments throughout the rest of your life. However, they can have high fees and no death benefits, so shopping around for the best deal is a good idea. Overall, it’s best to have a thorough plan before initiating a rollover to avoid consequences and retain your entire nest egg.

Tips for Rolling a 401(k) Into an Annuity

  • A financial advisor can help you make the best rollover choices. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • You can delay Social Security payments just like annuity distributions. Doing so can strengthen your financial position in retirement. Here’s why delaying Social Security is more lucrative than ever.


 

Income versus growth A new way to look at retirement UPDATE 6 10 2023

 

Relax,  you are covereed for life with plus 10% APR guaranteed

KEEP READING
then call me (530) 553-1214

With markets in continued disarray for well over a year now, investors may be looking at ways to solidify income instead of pursuing traditional growth strategies.

You really can’t blame them. The longer the market falls, the more discouraged an investor may become.

There are solutions to be able to abandon growth for long term income and looking in this direction can open up more possibilities than just buying a handful of stocks and sweating out market crashes.

Certificates of Deposits (CDs) are available both through your local bank or credit union and through most financial advisory firms. Right now, the return on CDS are healthier than they’ve been in decades due to the increase in interest rates by the Federal Reserve.

Time Frame Laddering CDs (my term here) is a sound strategy to both garner possibly higher returns along with a 100% government guarantee on principal. Laddering means buying different maturity dates which enables you to lock in returns for a longer period of time yet have some level of liquidity. For instance, buying a 6 month CD, a 1 year, 2 year and 5 year CD is an example of laddering. Although a 5 year CD would be essentially tied up for 5 years, the shorter duration CDs convert back to cash sooner according to each maturity date that you select. I wouldn’t recommend buying anything longer than 5 years out as there is too much that could happen to interest rates given the current crazy economic environment, but that’s just me.

One could certainly consider 10, 20 or even 30 year products be added to a ladder portfolio. Just make sure you understand the advantages and drawbacks of longer time commitments.

You could use the same strategy for Treasury Bills, notes or bonds. Seek out a financial professional or discuss with your local bank to understand the differences between CDs and Treasury products. These are also government guaranteed.

Buying a basket full of dividend stocks is another way to garner long term income. Dividends are sort of like thank you gifts from the publically traded companies that offer them.

Basically if you buy a share of a dividend paying company, they pay you a certain amount for every share you own every so often.

Some dividend paying companies have paid dividends for decades, and some have increased their payments every year for just as long. Be aware however that dividends can be reduced or even eliminated by the company at any time. As a general rule however, if a company have been paying dividends for years and/or has never cut them, there is a good chance they would want to preserve that track record. Another consideration of dividend paying stocks is the price of the stock could drop or go up. Going up would be nice of course but a drop in price could sting a bit. Price changes do not necessarily change your payment however but it could.

Buying bonds (debt from companies, municipalities or even states) are usually regarded as a bit more stable than stocks. They pay an interest rate and you can buy insured bonds if you’re worried about a default, and yes, defaults can happen.

Many conservative investors hold just a portfolio of bonds, having been taught by their grandfathers that bonds are a stalwart of a consistent investment strategy. Some argue however that this way of thinking is old fashion and indeed, the bond markets have been hammered like stocks on numerous occasions.

I would tend to agree that bonds, albeit, the RIGHT ONES, can be safer than holding some stocks, but in the last few decades, even bonds have, at times, been uncharacteristically volatile.

Like all investments, make sure you understand the ins and outs before venturing into the arena.

Income annuities are contracts from insurance companies that, in exchange for a payment(s) to them, they promise to pay you a certain amount for a certain period of time. Lifetime income is available and you can even select the percentage return you desire, locked in for life, if you meet certain conditions.

Not falling into the traditional discussion of what is called equities, you can always dip your toes into being a landlord and garner a property to rent out. Renting out a home, condo or mobile home, or taking advantage of the Airbnb phenomenon can supplement ones income. This route is a popular one should you be able to manage the work and investment required of such an endeavor.

Concluding, altering ones focus from capital appreciation (growth) to securing income can open up more avenues of consideration rather than just watching Wall Street all day.

“Watching the markets so you don’t have to”

 

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249. (530)559-1214.