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Old 04-15-2016, 01:47 PM
 
Location: Kountze, Texas
1,013 posts, read 1,160,633 times
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So, DH said we need to look at his insurance - I said Life? Yes. His annuity went down by $100+ after turning 55. So I said lets drop Option B (5x his basic salary) it was at $505,000.


He signed SF2817 and I sent it to OPM.


I said I'd rather have him around than be a Millionaires'. He said " you'll be there anyway - a Thrivent Term $500K, Thrivent Universal $260K, Basic FERS Insurance + Option A $113K and his IRA $400K+ I hope he lives for at least 30 more years and most of that disappears but happy to hear He has me covered in the event he does die sooner.


Our 2 youngest kids are 16 and 18 - one in college - I'm 4 1/2 years away from retirement eligibility-

Last edited by House4kids; 04-15-2016 at 01:49 PM.. Reason: thought of more information
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Old 04-18-2016, 09:08 PM
 
12,825 posts, read 20,157,976 times
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At some point life insurance may make very little sense, assuming one has a fund set aside for handling the costs of funeral, etc. Income replacement is less and less of a consideration at a certain point since SS and investments are the sources. This is yet another reason not to have a mortgage late in life.
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Old 04-18-2016, 09:42 PM
 
3,126 posts, read 1,272,174 times
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I cancelled mine years ago, a waste of money. It's good to have to support the wife and kids and bury you, but the kid is long gone and we have considerable assets so wife has no worries, so why make monthly payments on insurance?
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Old 04-18-2016, 09:44 PM
 
Location: Whereever we have our RV parked
8,814 posts, read 7,719,752 times
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Once the kids are grown, there's little reason to pay for a high dollar life insurance policy of any kind. The rates go higher and higher, and it only pays if you die.
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Old 04-19-2016, 02:14 AM
 
71,737 posts, read 71,853,273 times
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here is something , paying nice tax free money to your spouse if you die with no rmd's ever and not dependent on the whims of rates and stock markets .

why would someone ever want that ?

having diversified sources of income in retirement to compliment your own investing which can be variable can be very helpful ,especially to a widow .

an integrated stratagy using spia's , your own investments and permanent life insurance can be a great retirement strategy combining the benefits of a pensionized income and the benefits of your own investing as well as tax free money for your spouse or heirs .

the tax free part can be so important when so many things hinge on your taxable income in retirement . everything from getting ss taxed to what you pay for medicare is linked to those numbers .

a widow has to file single and lose an ss check too . so yeah , you all may need to look beyond raising a family and learn what a benefit an integrated strategy can be ..

think about how nice it would be having a check in the mail box monthly covering all the non discretionary bills for life regardless of the markets and an income stream you could never outlive , your own investing for growth and inflation adjusting for the discretionary spending and permanent life insurance locking in tax free money for your spouse not market dependent nor ever having rmd's and the taxes that go with it on that insurance money ..

the younger your spouse the greater this works .

.

Last edited by mathjak107; 04-19-2016 at 03:34 AM..
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Old 04-19-2016, 04:27 AM
 
8,204 posts, read 11,925,738 times
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Quote:
Originally Posted by House4kids View Post
So, DH said we need to look at his insurance - I said Life? Yes. His annuity went down by $100+ after turning 55. So I said lets drop Option B (5x his basic salary) it was at $505,000.

He signed SF2817 and I sent it to OPM.
Well, it's too late now, but I hope you were aware that Option B at 5x wasn't a simple yes/no situation. He could have decreased the multiple to 1x, 2x, 3x, or 4x his salary in order to save some money. It wasn't necessary to cancel the entire option.

It sounds like you've got plenty of other life insurance anyway (unless of course, you and he didn't elect for him to have his FERS annuity reduced 10% in order to provide you with a 50% survivor's annuity.)
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Old 04-19-2016, 07:39 AM
 
6,307 posts, read 4,752,208 times
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Quote:
Originally Posted by mathjak107 View Post
here is something , paying nice tax free money to your spouse if you die with no rmd's ever and not dependent on the whims of rates and stock markets .

why would someone ever want that ?

...........

I looked ahead to estimate my taxes when I need to take the RMDs. The tax impact is MASSIVE. It is not just of an issue of paying some taxes on the RMDs. In my case, the RMDs put me in a significant tax bracket and I will pay that tax on everything I earn. I go from paying very little tax to getting clobbered. I had a relative warn me about this a couple of years ago and now I see it for myself.


The future looks even worse for those of us who are already retired. First we are likely to remain in an extended period of low bond yields so we remain dependent on the stock market. Second, we have a Fed that is pushing for increased inflation. I am finding that my inflation rate is already pretty steep. I am returning to a hobby I quit 5 years ago when I retired. I was shocked to find the costs have gone up between 50% to double. So inflation rates depend on what you buy. There is also a concern about future taxes. Sooner or later they will go up and based on the Sanders phenomenon that could be a major impact.


I thought I understood how to manage my money in retirement. I have changed my mind and am looking for some professional help to include tax planning. It seems that SPIAs or other insurances might be part of the plan.
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Old 04-19-2016, 08:15 AM
 
1,227 posts, read 1,261,865 times
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Jrkliny,

While you are looking into the SPIA, you can look into the QLAC. You can get an idea or an actual quote here: https://annuities.direct/ No one will bother you if you go for the actual quote. This is a site to buy direct. However, it gives a good idea of what your monthly income would be and how much is taxable out of that.

Meanwhile, if you purchase the QLAC you can defer RMD on up to 25% of your 401(k)/Traditional IRA up to $125,000 until you are age 85. It has a joint option also. The entire QLAC monthly payment would become taxable when it is paid, but at least you can push the RMD on that portion of money out past age 70-1/2
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Old 04-19-2016, 08:19 AM
 
71,737 posts, read 71,853,273 times
Reputation: 49294
Quote:
Originally Posted by jrkliny View Post
I looked ahead to estimate my taxes when I need to take the RMDs. The tax impact is MASSIVE. It is not just of an issue of paying some taxes on the RMDs. In my case, the RMDs put me in a significant tax bracket and I will pay that tax on everything I earn. I go from paying very little tax to getting clobbered. I had a relative warn me about this a couple of years ago and now I see it for myself.


The future looks even worse for those of us who are already retired. First we are likely to remain in an extended period of low bond yields so we remain dependent on the stock market. Second, we have a Fed that is pushing for increased inflation. I am finding that my inflation rate is already pretty steep. I am returning to a hobby I quit 5 years ago when I retired. I was shocked to find the costs have gone up between 50% to double. So inflation rates depend on what you buy. There is also a concern about future taxes. Sooner or later they will go up and based on the Sanders phenomenon that could be a major impact.


I thought I understood how to manage my money in retirement. I have changed my mind and am looking for some professional help to include tax planning. It seems that SPIAs or other insurances might be part of the plan.
see ? i have been trying to explain this to you for a long time . as we get an education in this stuff our views tend to change and we realize we were basing things on only what we know and not what we don't know .

i have ed slotts life insurance ploy on the radar to try to convert some always taxable ira money in to nice tax free life insurance money for my spouse .

it is a shame when folks give these permanent policy's up , paid a fortune extra for coverage until death based on a 100% chance of payout and then do not use it for dying .

in the mean time some of the best tax moves involve using those policy's in retirement .
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Old 04-19-2016, 08:20 AM
 
71,737 posts, read 71,853,273 times
Reputation: 49294
Quote:
Originally Posted by LookingatFL View Post
Jrkliny,

While you are looking into the SPIA, you can look into the QLAC. You can get an idea or an actual quote here: https://annuities.direct/ No one will bother you if you go for the actual quote. This is a site to buy direct. However, it gives a good idea of what your monthly income would be and how much is taxable out of that.

Meanwhile, if you purchase the QLAC you can defer RMD on up to 25% of your 401(k)/Traditional IRA up to $125,000 until you are age 85. It has a joint option also. The entire QLAC monthly payment would become taxable when it is paid, but at least you can push the RMD on that portion of money out past age 70-1/2
kitces took a look at the qlacs and the vote was not such a good thing .
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