R2I Club Member Hangout

sunnysideup wrote: ↑Mon May 06, 2024 9:21 pm Started liking Cava also when craving Mediterranean. They opened few years back in NJ and have pretty good falafel based menu.
Similar to Chipotle can customize each option including having an option of Basmati rice.

Closest Cava is at least 30 minutes away, but there are similar Mediterranean options nearby. I love the falafels and kebabs and get baklava sometimes if I feel naughty (nutty?)!

All hail inflation - product with 5.8% SWR for at least the next 10 years since interest earned can be withdrawn without surrender charges and MVA. Please don't contact me for writing this contract since I am not an insurance agent Know your respective state's insurance limits before investing $5 million!

https://www.blueprintincome.com/fixed-a ... 1&id=46106

SAPPORO wrote: ↑Wed May 08, 2024 8:12 am All hail inflation - product with 5.8% SWR for at least the next 10 years since interest earned can be withdrawn without surrender charges and MVA. Please don't contact me for writing this contract since I am not an insurance agent Know your respective state's insurance limits before investing $5 million!

https://www.blueprintincome.com/fixed-a ... 1&id=46106

Can you unpack this for us with an example ? say i invest 100k in this.. do i get to withdraw $5800 every year for 10 years and at the end of 10 years get my 100k back or something more ?

Razz R wrote: ↑Thu May 09, 2024 8:59 am

SAPPORO wrote: ↑Wed May 08, 2024 8:12 am All hail inflation - product with 5.8% SWR for at least the next 10 years since interest earned can be withdrawn without surrender charges and MVA. Please don't contact me for writing this contract since I am not an insurance agent Know your respective state's insurance limits before investing $5 million!

https://www.blueprintincome.com/fixed-a ... 1&id=46106

Can you unpack this for us with an example ? say i invest 100k in this.. do i get to withdraw $5800 every year for 10 years and at the end of 10 years get my 100k back or something more ?

Yes, you get to withdraw $5800 every year and get your principal back after 10 years and hopefully the rates are decent at that time for 1035 exchanges. There are other MYGAs with 10% free withdrawal of the account value every year, but the rates are lower. Seriously thinking of moving my traditional IRA funds to this since no more juice to squeeze from it in terms of tax savings and it can only be a tax headache with RMDs in the future with possible unfettered growth - It's like controlled burning to avoid wildfires! It could be my 40% bond allocation everyone talks about but with much better and guaranteed returns and it allows me to invest 100% and do some crazy things with the after-tax funds.

@SAPPRO,
Any thoughts on SVOL ( Simplified Volatility Index) , dividend yield > 16% seems to be good to be true?
Thanks,
Jin

SAPPORO wrote: ↑Thu May 09, 2024 9:23 am

Razz R wrote: ↑Thu May 09, 2024 8:59 am

SAPPORO wrote: ↑Wed May 08, 2024 8:12 am All hail inflation - product with 5.8% SWR for at least the next 10 years since interest earned can be withdrawn without surrender charges and MVA. Please don't contact me for writing this contract since I am not an insurance agent Know your respective state's insurance limits before investing $5 million!

https://www.blueprintincome.com/fixed-a ... 1&id=46106

Can you unpack this for us with an example ? say i invest 100k in this.. do i get to withdraw $5800 every year for 10 years and at the end of 10 years get my 100k back or something more ?

Yes, you get to withdraw $5800 every year and get your principal back after 10 years and hopefully the rates are decent at that time for 1035 exchanges. There are other MYGAs with 10% free withdrawal of the account value every year, but the rates are lower. Seriously thinking of moving my traditional IRA funds to this since no more juice to squeeze from it in terms of tax savings and it can only be a tax headache with RMDs in the future with possible unfettered growth - It's like controlled burning to avoid wildfires! It could be my 40% bond allocation everyone talks about but with much better and guaranteed returns and it allows me to invest 100% and do some crazy things with the after-tax funds.

so how is this different from a CD or savings account, that is currently offering around 5% ? are there any tax benefits ?

Razz R wrote: ↑Thu May 09, 2024 10:02 am

SAPPORO wrote: ↑Thu May 09, 2024 9:23 am

Razz R wrote: ↑Thu May 09, 2024 8:59 am

Can you unpack this for us with an example ? say i invest 100k in this.. do i get to withdraw $5800 every year for 10 years and at the end of 10 years get my 100k back or something more ?

Yes, you get to withdraw $5800 every year and get your principal back after 10 years and hopefully the rates are decent at that time for 1035 exchanges. There are other MYGAs with 10% free withdrawal of the account value every year, but the rates are lower. Seriously thinking of moving my traditional IRA funds to this since no more juice to squeeze from it in terms of tax savings and it can only be a tax headache with RMDs in the future with possible unfettered growth - It's like controlled burning to avoid wildfires! It could be my 40% bond allocation everyone talks about but with much better and guaranteed returns and it allows me to invest 100% and do some crazy things with the after-tax funds.

so how is this different from a CD or savings account, that is currently offering around 5% ? are there any tax benefits ?

CDs are offering only 4ish on 5-year terms and are not even available for 10 years and MYGA for 5-year term is in the 6ish range. We pay taxes on CD interest on accrual but with MYGA we pay taxes at maturity or at withdrawal, so the returns are higher since they are tax-deferred. MYGA comes with the retirement account protection albeit with its drawback of 10% penalty on withdrawals before 591/2.

JINSAKAI wrote: ↑Thu May 09, 2024 9:54 am @SAPPRO,
Any thoughts on SVOL ( Simplified Volatility Index) , dividend yield > 16% seems to be good to be true?
Thanks,
Jin

Betting against stock market volatility seems to be an 'insult' to the stock market. It has not been in existence long enough to make any call on this. Dividends reduce the stock price by the same amount, and they're just returning our own money and so not a big fan of dividends and in addition its dividends may be considered non-qualified and treated as ordinary income for taxes. Having said all this, if you have covered all the living expenses with guaranteed returns in retirement, this could be one of the 'crazy things' that I mentioned in an earlier post.

SAPPORO wrote: ↑Wed May 08, 2024 8:12 am All hail inflation - product with 5.8% SWR for at least the next 10 years since interest earned can be withdrawn without surrender charges and MVA. Please don't contact me for writing this contract since I am not an insurance agent Know your respective state's insurance limits before investing $5 million!

https://www.blueprintincome.com/fixed-a ... 1&id=46106

Looks like a good product. However, assuming one signs up in their 50’s, won’t we run the risk of hefty taxes upon maturity (assuming T-IRA as source in which case both principal and taxes will be treated as ordinary income) and possible IRMAA penalties on Medicare premiums? That is assuming not wanting to do a rollover into the same plan for another 10 years or 1035 exchange upon maturity. Won’t we have lesser control over taxation of monies in tax-advantaged funds with this product?

teera wrote: ↑Thu May 09, 2024 6:42 pm

SAPPORO wrote: ↑Wed May 08, 2024 8:12 am All hail inflation - product with 5.8% SWR for at least the next 10 years since interest earned can be withdrawn without surrender charges and MVA. Please don't contact me for writing this contract since I am not an insurance agent Know your respective state's insurance limits before investing $5 million!

https://www.blueprintincome.com/fixed-a ... 1&id=46106

Looks like a good product. However, assuming one signs up in their 50’s, won’t we run the risk of hefty taxes upon maturity (assuming T-IRA as source in which case both principal and taxes will be treated as ordinary income) and possible IRMAA penalties on Medicare premiums? That is assuming not wanting to do a rollover into the same plan for another 10 years or 1035 exchange upon maturity. Won’t we have lesser control over taxation of monies in tax-advantaged funds with this product?

You're going to get taxed on all the funds since it is T-IRA no matter what. But this is in lieu of bond for safe allocation with much better and guaranteed return at least for the next 10 years which allows us to go 100% in equities with the rest of the after-tax funds especially while waiting to maximize SS payments. It could be used for the withdrawals for time period from 59.5- 67. I find it as a better strategy than incurring huge tax bills trying to convert traditional to ROTH IRA. The growth is on the lower side, predictable and so RMD can be better managed as well. You can always roll the principal back into an IRA at maturity if it's a better option at that time.

PS: I noticed that Gainbridge is offering a higher 6.15% with 10% free withdrawals and I overlooked them since I have maximized my state insurance protection limits with them!