How Is An Immediate Annuity Funded?

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Hi there, Stan the Annuity Man,

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America's annuity agent, licensed in all

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50 states in Puerto Rico. Great question

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today. How's an immediate annuity

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funded? Short answer, but it's going to

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be a longer video than this, is with

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money. Uh, so the question is, where's

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that money coming from? How do we do

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that? How's the process work? All those

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little neat little tidbits of life and

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annuity wonderfulness.

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[sighs and gasps] I'm going to do it

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after this.

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[music]

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So, first of all, let's talk about an

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immediate annuity. It's the granddaddy

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of all annuities. Been around in this

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country, sold for over 200 years.

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Actually was originally developed in the

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Roman times for the beautiful Roman

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soldiers and their families for them

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laying it on the line for the empire.

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They created an annual means payment for

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life for them. And that's where the

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single premium immediate annuity

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originated. Unfortunately, too many

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journalists and adviserss think that,

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well, I will never buy an annuity. They

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just think it's there's only one.

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There's actually 10 plus depending on

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how you're counting them. But immediate

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annuities are the most efficient way for

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income contractually to pay for lifetime

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for a lifetime either single or joint

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life. You can also set it up to pay for

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a specific period of time like a period

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certain. And it can be used in IRA, Roth

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IAS, and noniras. So when we talk about

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where's the money coming from, that's

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where the money is coming from. It can

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come from any of those sources, the

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guarantees, the contractual guarantees

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are the same. It's just the taxation of

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of those guarantees coming out of the

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specific accounts can be different. So

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couple things about immediate annuities

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you need to know. Number one, I've

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written an owner's manual on that. You

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can go to my site at theanuityman.com.

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You can download download that owner's

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manual on single premium immediate

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annuities for free. very simple, easy

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read. Um, I've also done a few um,

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annuities on the topic. So, you can take

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a look at the details of that. You can

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also go to my site, run quotes on on

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immediate annuities 24/7 365. And if you

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want to discuss them and move forward,

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you can talk to me by booking a call.

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But let's talk about the guarantees of

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an immediate annuity and then coincide

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the funding with that. Immediate

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annuities. If if I ask two people, I ask

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people two questions every single time.

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What do you want the money to

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contractually do? And when do you want

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those contractual guarantees to start?

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If you answered I need lifetime income

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or I need lifetime income for me and the

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spouse joint life then and you need the

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income to start within a year 30 days up

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to a year then it's an immediate

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annuity. So then the question comes

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where's the money coming from? The vast

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majority of immediate annuities

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purchased are from people's IRA money

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401k 403b 457 IRA because that's where

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most people's money is located. Okay.

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So, if it's inside of an IRA and the

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money's being paid out, then just like

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everything inside of your IRA, it's

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taxed at ordinary income levels. Very,

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very simple. Going to pay you for life,

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etc. You can use your IRA assets for

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that. If it's a Roth IRA, taxfree income

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until the politicians change the rules,

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wink and a nod. Hope they don't, but

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that's taxfree. And then um with nonIRRA

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checking account type money. All right.

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When you buy an immediate annuity in

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inside of using checking account type

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money, just remember all immediate

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annuity payments are return of principal

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plus interest, a combination of those

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two. So in a nonirra checking account

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type setting, you're only paying taxes

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on the interest.

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So let's just say it's $5,000. I'm using

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this as an example. Put your pens down,

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okay? because you're going to go to my

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site and run a quote on your situation

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and see it. $5,000 a month and let's

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just say $3,500 is principal and $1,500

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of that is interest. You're only paying

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taxes on the interest in a nonirra

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account. All right? So, you're still

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getting the $5,000 in the IRA, but

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you've been deferring, so you're going

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to have to pay taxes on all 5,000. But

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I'm just saying there are some tax

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advantages

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um using nonIRRA money, but that doesn't

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mean you have to do that. That's what

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the conversations for. Now, the funding

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of the annuity, you know, we're

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obviously the the biggest, baddest,

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largest, wonderful, wonderfulness.

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Yes. Um distributor and sellers of

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annuities of all types of fixed

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annuities in the country. And we sell

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more immediate annuities than anybody.

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But the way the process works is if you

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we'd we'd run the quotes and talk about

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it. We'd make sure that it's structured

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right. Obviously, we if we I'd ask you a

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question. If you died in a larjet crest,

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do you want the money to go to you and

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your family? We can structure it so that

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100% of the money goes to your family,

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not the annuity company. That's a that's

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a big misconception that if you die, the

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annuity company keeps the money. No, you

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don't have to structure it like that.

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And most most people do not. Um, but the

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way the process works is then we would

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then lock quote all carriers for

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immediate annuities and lifetime income.

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We're only looking at A+ or better

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companies. No exceptions. A+ or better.

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And then we're looking at the highest

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number. I don't care about the names,

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the brochures, you know, sites that show

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brochures and named like, okay, great,

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great brochures, but who cares? It's

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about A+ or better and then the highest

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number. Um, if you decide to move

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forward, we'll lock in that number.

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You'll go through the application

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process with us. It's about a 25m minute

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phone call. And then my team in Las

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Vegas, have the biggest staff in the

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industry and all they do is the

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paperwork for you. They're all licensed

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in all 50 states, but not on commission.

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They have to be licensed in your state

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to legally speak with you. Just remember

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that if you're speaking to someone else.

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So, we are the only ones that have every

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single person, including the

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receptionist,

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um, all licensed in 50 states. So, um,

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you you talk with us. We do all of the

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paperwork for you verbally listening to

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you. All of this is confidential. We'd

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send you the paperwork um electronically

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for you to review and sign and then we

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would coordinate the movement of the

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money. How do you fund an immediate

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annuity? Which was the question. It

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would be coming directly from the

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account where it's at to an account at

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the annuity company. Money never touches

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our hands. We're compensated one time by

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the annuity company. Okay. Um but that

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doesn't come out of your m your money.

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It's a net transaction to you. So let's

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take the IR. say, "Stan, I want to do

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one in the IRA. Got the IRA at this big

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firm over here." So, what would happen?

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We'd lock in the highest quote. Um, we

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do the application. There'd be an IRA

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established for you at the annuity

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company. There's an IRA here where the

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money is. Money would go from IRA to

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IRA. Non-T taxable event. Doesn't

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trigger any taxes. Okay. Now, same thing

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for Roth. If you have a Roth over here,

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you'd go through the application

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process. Roth established for you at the

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annuity company. Roth to Roth transfer.

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If it's just in a checking account,

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annuity company, we establish a policy

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going through the application process

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and then either wire transfer or check.

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We pay for either going directly to the

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annuity company. And one last other

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funding me mechanism is if you already

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have an annuity and you want to transfer

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it to an immediate annuity, if I deem

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that appropriate and suitable and in

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your best interest, then that's what's

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called a 1035 transfer. 1035 is the IRS

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code that says it is a non-t taxable

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event to go from one annuity to another

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annuity. And once again, my staff does

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all of that from start to finish. You

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don't have to call the company. You

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don't have to do any of that. You don't

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have to decipher all the paperwork. We

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do all of that for you. We make it

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turnkey from start to finish. We just

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keep you updated on the process. And

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then after the policy is issued, the

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policy is actually sent to us for review

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for accuracy. And then we FedEx it to

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you. you have an online account at the

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annuity company. Um, again, money never

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touches our hands. We're just the top

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agent in the country and represent all

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carriers. So, how do you fund an

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immediate annuity? First thing, we have

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to figure out if if it's suitable for

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you to even own an immediate annuity.

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Then, we'd have to look at how do we

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structure it. Is it your life? Is it

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joint life? Is it just a period certain

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to fill a gap? Those are the

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conversations that we have to have. Then

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we'd look at okay what which account

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type IRA nonirra Roth IRA which which

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makes the most sense for your situation.

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There is no perfect answer. Someone

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asked me the other day what's the best

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account type to use for the immediate

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annuity? I don't know. I don't know

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anything about you. I need to know about

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you because it's specific. Once we

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choose that then we'll lock in the quote

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go through the polic uh the application

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get a policy number and then pull the

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money. Non-T taxable event for for a

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traditional IRA. A lot of people think

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that they have to sell something and

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they're going to trigger taxes. No. IRA

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to IRA non-T taxable event. So, it's

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easy to answer the question how a single

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premium immediate annuity is funded. The

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most important part, I'm not going to

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say it's hard. It's it's it's just

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required. The most important required

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part is a finding out if you need one. B

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structuring it the correct way. C

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choosing the right account type. and

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then us quoting all carriers, locking in

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the highest contractual guarantee, and

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then my team coordinating the movement

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of the money. Sounds complicated on your

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end, but it's not because we're doing

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all the work. And I put in the biggest

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staff on the planet. And by the way,

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nobody works virtually for me. They're

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all under one huge large monstrous roof

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in Las Vegas, Nevada, because we kind of

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work communal on all cases, making sure

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that everything goes smoothly,

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everyone's working together. There's no

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incentive on specific cases. Their

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incentive is at the end of the year, you

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know, I I make a determination if

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they've taken care of the clients and

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then they get a bonus on top of their

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very chunky salaries and benefits which

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they've earned. So, I hope that answered

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that question. And by the way, that same

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way that to fund immediate annuities,

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that's the same process we go through

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with any annuity type. One last thing,

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you obviously go to my site and download

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the books, run quotes at your heart's

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desire. There's an immediate annuity

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owners manual that you can download, but

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I also did a video on how annuities can

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take care of your family. And I think

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that's important for you to understand

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that that is an option and that's

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available to you. And there are ways to

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do it and I've done it. I've done it

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over three three decades. So I've seen

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it, been to every rodeo you can annuity

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rodeo on the planet. So there's not a

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situation I haven't solved for. So I'd

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like to hear your specific situation and

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maybe we put something together for your

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family. All right. My name is Stan the

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annuity man.