Transferring A Retirement Annuity Contract

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Hi there, Stan the Annuity Man, America's annuity agent, licensed in all 50 states,

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the top agent in the country, the tallest agent in the country,

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the pioneer of contractual guarantees only, married for 37 years, two daughters. I don't

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know. That's about all I got. Topic of the day is transferring your retirement annuity contract,

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if you want to, if it makes sense. And we're going to talk about that after this.

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This is an important topic because a lot of agents look for annuities that's already been sold,

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and then they try to flip them, twist them, churn them, however you want to say it, into another

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one to create a commission. Now, that's illegal, and it is a horrible practice that is happening

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across the country. So, when we're talking about transferring, I'm going to get into the weeds of

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Roths and IRAs and all that stuff. But let's just 30,000-foot view about transferring. The annuity

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industry has tried to prevent this practice, but it keeps going on. What they have done is,

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if you said, I want to transfer this annuity that I purchased to another annuity and you wanted to

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use us, we would have to prove mathematically that where you're coming from and where you're

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going to, that where you're going to is better for you contractually. Not hypothetically,

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not theoretically. Contractually. And within the application, there's a side-by-side comparison

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that my team has to fill out of your policy and the new policy. And you're saying, "Well,

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that sounds pretty darn good, son. They got my back there, son." Yes, if the person filling out

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the application is honorable, you are correct. And annuity companies will not take the transfer

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if where you're coming from is a better deal for you. And that's a good thing. But what

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happens is there's some shenanigans, as they say in Ireland. Do they say that in Ireland,

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Big C? He's behind the camera. Shenanigans. There's some shenanigans in the paperwork where,

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in other words, they'll juice the numbers to where it looks like where they're going

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is better. I'm not sure if that's a felony, but it's darn sure a misdemeanor. You know,

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it's like filling out a mortgage loan incorrectly. That's a problem. Okay? It's a problem when that

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happens. So, there are guardrails involved to protect you as the consumer. Okay? I just had

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a financial journalist, Terry Savage. If you've heard her, go to terrysavage.com.

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Very nice lady, she's the first female board member of the Chicago Board of Options. Just

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really smart. And the last article she wrote, and I helped her on it, was about this topic,

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about agents taking old annuities and flipping them and twisting them. They call it twisting,

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for whatever reason, in the industry, but I call it flipping, churning, churning that

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to create another commission. And a lot of times agents will use, well, I got this upfront bonus,

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and that'll make up for any type of surrender charges and all that stuff. That's just total

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nonsense. I'm just going to tell you right now. Because upfront bonus is not free money.

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It typically goes to the income benefit side. But again, let's just say that the agent's

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pitching that. It still has to mathematically work in your favor going to the new contract.

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Let's go backwards a little bit because I was on a soapbox there, but you needed to know that first.

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Let's just say you have an annuity inside of your IRA, and we have run the math, and it makes more

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sense for you to go to another annuity from that annuity. You can transfer IRA to IRA. So,

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in other words, the new annuity company that you're transferring to establishes an IRA. So,

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the money goes non-taxable event from one IRA to the other. Same thing if you had a

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Roth IRA and you had an annuity inside of the Roth IRA and that was transferable and it was

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proven that it's better contractually for you to go to a new policy, Roth IRA to Roth IRA,

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non-taxable event. If it's non-IRA money, what we call nonqualified money,

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checking account-type money, and you have an annuity inside of there,

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the IRS has a section called Section 1035 of their code. And 1035 says you can transfer

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from one annuity to another annuity, and it's a non-taxable event, does not trigger any taxes.

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So, the topic of this was transferring annuities, transferring your retirement

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annuities. It can be done. I have a team in place, my policy delivery team, that that's

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all they do. They make sure that things are in your favor, and then when the transfer happens,

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we take care of everything from start to finish. But let me go backwards again,

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and let's revisit that agent trying to convince you to move from where you are to another annuity.

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First thing you need to do, you can engage us, you can schedule a call, we'll help you through

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the process. Or you can call the annuity company that you're currently at. And when you call them,

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there's no agents on the phone. These are customer service people that are going to

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pull up your account, look at it on a screen, and they're going to tell you the truth. And you're

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going to ask them, "What's the lifetime income stream that I would get from your company?"

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Don't have the agent do it that's trying to sell you something. You do it. You call them up, give

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them your policy number, and ask that question. Most of the time, if you have an income rider

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attached to your policy, you're going to have to stay at that company to get the highest payout.

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So, let's do a draw-a-line-down-the-blank-sheet-of-paper

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exercise. Draw a line down the blank sheet of paper. Indexed variable annuity on this side,

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income rider value on this side. Two separate calculations. This income rider side is always

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going to be higher. 99.99999999% always going to be higher. So, if you're transferring,

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you're not transferring that higher amount, you're transferring the accumulation value

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amount. Ran into a situation the other day. Someone was trying to get flipped

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into another annuity. Accumulation value was 400,000. Income rider value was 650.

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And Johnny Appleseed agent was trying to flip them with an upfront bonus. Didn't matter.

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Upfront bonus goes to the income side. But what was going to be transferred was the 400,

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not the 600 plus. Okay? Mathematically could never work unless he lied on the application.

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Now, why do carriers do that? Obvious reasons. They want you to stay with them. That income

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rider knowing that it's going to be higher. And by the way, the annuity companies know that that

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makes that policy very sticky, meaning you have to stay. And that's okay. I told Terry Savage,

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who was doing this article, I said, I would say 90 to 95% of those situations that we review,

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90 to 95%, I want you to hear me clearly, we advise you to stay at the policy you're at. Why?

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Because the income rider doesn't transfer. Income riders, monopoly money in a phantom

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account that you can only use to determine the lifetime income at the time you want to take it.

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Here's the other bad thing about income riders. Bad because people just aren't

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educated. But that's why I'm here. Over 60% of people that own income riders never turn them

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on. They just look at them. They pay the fee on it, and they look at it. They go, "Look, Martha,

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this works. It's worth 650." Yeah, but when you die, poof, your death benefit is the accumulation

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value. So people say, "When should I turn it on?" Soon. You bought it for lifetime income,

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turn it on. Transfer the risk for the lifetime income. But don't have Johnny Appleseed agent

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try to flip you before you prove to yourself mathematically that there is a better deal

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out there. Sometimes there are. It's very few because annuity companies want you to stay.

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So, going back to the other part, transferring it, not a problem. My team does that, and all of those

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transfers are non-taxable events. They do not trigger any taxes. They go from one to the other,

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and the cost basis goes with it. All right? But be careful out there. I mean, if there

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was ever a consumer alert video, this might be it. Because there's a lot of annuities out there that

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have been sold over the past 10 years that are maturing. So, they're out of surrender charge,

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and that income rider's been growing, and that agent's salivating because they see that asset,

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and they're going, I can flip that. I can flip that, I can make 7 to 9% on that asset.

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Well, you know what they should be saying? Hey, that's great you bought that. What's

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the income benefit on that contractually? And then they should say, which is what we'll say,

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let's see if we can beat it. We probably can't, but that's our job. That's it.

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I guess conclusion, don't ever transfer an annuity for an upfront bonus, ever. Okay? Go to my site,

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run quotes, schedule a free consultation call, and also, too, above my head, you'll see a little

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clock ticking. There's a link to a video that explains how our process works. Everybody in the

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building's licensed in all 50 states. Nobody in the building's on commission. They're not

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hammers looking for nails. They're good people. They're going to listen. They're going to tell

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you the truth. So, a tough topic, but I'm glad you tuned in to it because maybe you're going to

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save yourself from a bad sales pitch. My name is Stan the Annuity Man. See you next time.