Amortize traditional IRA’s
I am 69 yrs old and about to enter the RMD period nxt yr. An adviser has suggested amortizing approx 275k traditional IRA money over 10yrs using funds to purchase life insurance versus Roth conversions over the next several yrs. Any opinions ???
Permalink Submitted by Don Warnke on Fri, 2019-08-16 12:44
It depends on what your ultimate objective is. If you are trying to get assets to a spouse or the next generation as efficiently as possible this could be an attractive option, also if you are looking for long term care benefits and this contract offers those features that would be another plus. An important consideration is what type of life ins. contract is being considered, there are some that contractually pay up (no further premium due) after 10 yrs and there are others that you stop paying premium but there continues to be mortality and expense charges withdrawn from the values. Also pay close attention to what the annual distribution will do to your AGI if you are not already paying tax on your social security benefit these distributions may cause some of your social security benefit to become taxable and could also impact your medicare part B premium.There are a number of variable to consider that would determine whether this makes sense for you.
Permalink Submitted by Milan Stevanovich on Sat, 2019-08-31 21:37
Thank you for the reply and information provided. This particular Ins. Policy does have continued mortality and expense charges. I’m concerned about this and the income taxes along with medicare cost increases with part D also being invoked due to the annual income increase.Is Roth conversion better and what type of product would I consider for those converted funds. Appreicate your reply …
Permalink Submitted by Bruce Steiner on Sun, 2019-08-18 23:16
You should look at life insurance as insurance. Do you need life insurance? Is there anyone dependent on your earnings who would suffer a financial hardship if you were to die early?