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IRA Annuity Calculator

Stan Haithcock
March 20, 2023
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Today's topic is IRA annuity calculators. We're discussing calculating annuity guarantees within your IRA. Yes. You should have an annuity inside of your IRA if you want contractual guarantees, if you want lifetime income, if you want principal protection, if you want legacy, if you want long-term care type coverage, and the only assets you have in bulk are IRA assets. Then it makes sense. So, if anyone's out there saying never, ever, ever buy an annuity inside an IRA, they are uninformed, or they're not telling the truth for some reason or have some agenda.

IRAs and RMDs

Let's talk about IRAs and Required Minimum Distributions (RMDs). Required Minimum Distributions is the IRS tapping you on the shoulder when you turn 73 (at the time of this blog). You have to take RMDs whether you want them or not. I always tell people IRAs will become an income source for you whether you want it or not because you'll have to take money out of your IRA when you turn 73. Right now, they're talking about maybe raising to age 75. If you're watching this in 2033, that might be a different rule. Okay, so RMDs, you have to put it in the back of your head that I'm going to have to take income from that. It used to be 70 and a half, and I want to smack whoever did 70 and a half because I hated the half. I like whole numbers, 73 makes more sense to me. So at age 73, you're going to have to take RMDs.

Now, I get a lot of calls. I'm Stan The Annuity Man. People call me all the time. You can call me as well by booking an appointment. We're here to help. But the guy calls, and he says, "You know what? I've got this IRA. It's a big IRA, and it's like seven figures. I'm thinking of taking a portion of that and buying an Immediate Annuity for lifetime income for me and the spouse," and I'm like, that sounds great. But his next question is, "Okay, I'm buying the Immediate Annuity inside the IRA. How does that affect the Required Minimum Distributions for that $400,000 we're putting in the Immediate Annuity?" I said, good question, Fred. I'm going to answer it. Here's what I said, and it's the truth. When you buy an Immediate Annuity inside of an IRA, and in this case, Fred's $400,000, that income coming from that $400,000 satisfies the RMDs for the $400,000. Now, the rest of his non-annuity IRA, ETFs and stocks and bonds, or whatever Fred had, he's going to have to pay RMDs and calculate those RMDs on that amount, on those non-annuity holdings. But he liked that he had that income floor in place. It adds to social security, and it was a good fit. So just put that in the back of your mind. You can have an Immediate Annuity inside of an IRA, and of course, you can have a Qualified Longevity Annuity Contract inside of an IRA to solve for lifetime income. For both products, the income from those products fully satisfies the Required Minimum Distribution for that dollar amount in those annuities. Now with the Qualified Longevity Annuity Contract, that's another story. Still, the Qualified Longevity Annuity Contract inside of an IRA is pretty cool because you can start income as late as age 85, it doesn't have to be that late, but as late as age 85 and while you're deferring and waiting to turn on the income stream, that dollar amount is not used to calculate your Required Minimum Distributions. Sounds good. Right?

The Annuity Solution

The bottom line is that you need to look at annuities as a solution for either Principal protection, Income for life, Legacy, or Long-term care. The acronym is PILL, P-I-L-L. But in most cases, when you're using annuities inside of an IRA is for the first two, principal protection or income for life. The principal protection part, many people currently, at the time of this blog, are using Multi-Year Guarantee Annuities inside of their IRAs because they want to protect the principal. They want an interest rate that is better than CD rates and Multi-Year Guarantee Annuities is the industry's version of a CD. It's not a CD, but it works that way, meaning you have a guaranteed interest rate for a specific period of time you choose. If you go to our live MYGA rates section, you're going to see the best rates for your state of residence. You'll have to put in your state and the duration and up pops the best rates in the country. That's a principal protection product.

Indexed Annuities can also be used for principal protection inside of an IRA. Most of the time you are looking, most people at the time of this blog, with 10,000 baby boomers hitting age 65 every single day, they're looking for income guarantees to combine with their Social Security to create that income floor with that money hitting the bank account every single month as long as they're breathing. Income is the biggest solution we're using annuities for inside your IRA. I don't want you to think you can't use annuities inside an IRA because that's already tax-deferred. It's already tax-deferred. Under that premise, when you buy an annuity and with IRA assets, you're buying the annuity for the contractual guarantee. You're not buying it for tax deferral or tax break. You're buying it for the contractual guarantee inside of the IRA.

Annuity Calculators

We've been talking about IRAs, IRA annuity calculators, annuity calculators, and the annuity calculators on our site. If you go there to get SPIA, DIA, QLAC, or Income Rider quotes, and you want to get those quotes, you're going to have to put in your name and your email address because we're going to send you the quote via email after you see it live on the screen immediately, dates of birth, state of residence, how much money, IRA, non-IRA, when do you want the income to start? And with the Income Rider, Deferred Income Annuity, and Single Premium Immediate Annuity, you can run two types of quotes. You can run a reverse engineer quote, meaning solving for a specific dollar amount monthly, or you can run a lump sum quote saying, okay, I have this lump sum. How much will that create? Remember that lifetime income is based on your life expectancy, primarily when you take the payments, and that interest rates play a secondary role. I say that because everybody calls me and says, I'm waiting for interest rates to rise. You can't do that. I know you're saying, well, I'm going to do that. Okay. Great. If you're going to do that, then you have to factor in the payments you missed while you're waiting to become master of the universe and time it. You just can't do that. When you go to the Qualified Longevity Annuity Contract page, you can run the lump sum, and at the time of this blog, the maximum you can put in is $200,000. Again, when you go to our site and use our annuity calculators, we will have you choose IRA or non-IRA. The most significant part of this blog I want to drive home is that you can use IRA assets for annuities. You're buying contractual guarantees. Never forget that. The only difference is that contractual guarantees are the same regardless of the count type. The difference is how the money is taxed when you bring it out.

Hey, do me a favor. I encourage you to do this. Don't be afraid. Book a call and aside a 30-minute block with me. I'll do something really unique in the financial services business. I'm going to listen. I'm going to ask questions, and I'm going to listen. I'm going to shut up, and I'm going to write things down. I'm going to put together a customized plan for you, no cost, no obligation. How can you pass that up? I have absolutely no idea how you could do that. If John Bogle was still alive at Vanguard and he was offering 30-minute blocks for you to talk to him, you'd talk to him. I'm not comparing myself to John Bogle of Vanguard, but I'm the thought leader in the annuity industry. Why wouldn't you talk to me? Because I'm abrasive? That could be the hesitancy. But there's one thing that's not crazy, the facts, the brutal facts, and the contractual guarantees we can provide. I encourage you to interact with us. Run the quotes and book a call with me.

Never forget to live in reality, not the dream, with annuities and contractual guarantees! You can use our calculators, get all six of my books for free, and most importantly book a call with me so we can discuss what works best for your specific situation.

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