R2I Club Member Hangout

SAPPORO wrote: ↑Thu May 09, 2024 7:22 pm

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08, 2024 8:12 am All hail inflation - product with 5.8% SWR for at least the next 10 years since interest earned can be withdrawn without surrender charges and MVA.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!

Agree with your assessment. My only reservation with this product is limited options available over the timing of withdrawal/usage of the principal (only options - either withdraw in full after paying taxes on maturity potentially impacting ACA credits/IRMAA or roll it into another long-term IRA). This gets more cluttered with other income streams coming into play over time - RMDs, SS, Pension/CD/Annuity disbursements.

teera wrote: ↑Thu May 09, 2024 8:15 pm

SAPPORO wrote: ↑Thu May 09, 2024 7:22 pm

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

Agree with your assessment. My only reservation with this product is limited options available over the timing of withdrawal/usage of the principal (only options - either withdraw in full after paying taxes on maturity potentially impacting ACA credits/IRMAA or roll it into another long-term IRA). This gets more cluttered with other income streams coming into play over time - RMDs, SS, Pension/CD/Annuity disbursements.

Sorry if I did not make it clear earlier - there is no requirement to withdraw a set amount. I agree with the restrictions on the timing and amount of the withdrawals, thanks for pointing that out. The emphasis was more on higher guaranteed returns which is available now after 20+ years and how MYGAs can play a role in it keeping RMDs in focus. It is ideal for someone in their 50s like me not needing the money for a few years. It should not cause a huge tax shock on maturity since it can be easily rolled back in to the IRA if the free withdrawals were not taken.
Overall, IMO, IRAs are good for short term trading or for the guaranteed fixed income stream and not for high-growth equity investments since after-tax investments are good for them.

It’s not how much is enough, imo. If I had thought about it just with a financial number in mind, I would not have quit in my 40’s. Well R2I helps with living the lifestyle and more. We just bought a holiday home (closer to a beach) , where we plan to spend few months a year. Would it have been possible for me to manage multiple homes in US? Definitely not.

Money is just one data point. With the free time and lack of regular paychecks comes adjusting to a newer lifestyle. While working I was always booked at the expensive hotels and like. After quitting FTEmployment it’s a different ball game. When vacationing with kids, we break the bank but otherwise not.

Last year a well regarded relative (a doc) asked why I was not employed at this age. I told him I’ll let him on a secret.. I have too much money that I can’t spend in this lifetime and the paycheck doesn’t motivate me. The drawback of living in India, every Ram Shyam and Ganshyam wants to know what you do and how you manage to live.

so what are some of the best MYGA rates out there. has anyone found better than 6.15% that's on offer from GainBridge ?. basically this will approximately double your money in 10years due to compounding. I found the process to be pretty straightforward so converted a few of my lower yield Ibonds (3.95% APY) to these.. if the fed cuts rates as is expected.. it might not be a bad idea to lock some of these away

Razz R wrote: ↑Fri Jun 21, 2024 9:37 am so what are some of the best MYGA rates out there. has anyone found better than 6.15% that's on offer from GainBridge ?. basically this will approximately double your money in 10years due to compounding. I found the process to be pretty straightforward so converted a few of my lower yield Ibonds (3.95% APY) to these.. if the fed cuts rates as is expected.. it might not be a bad idea to lock some of these away

Canvas annuity is providing 6.55% but for maximum tenure of 7 years. I did a 1035 exchange with them of some of my low rate MYGA from the past. Watch out for the state insurance guaranty coverage limits per account per account type!

Thanks SAPPRO but i think canvas does not offer products in NJ last time i checked..

cyberabadi wrote: ↑Fri May 31, 2024 8:26 am It’s not how much is enough, imo. If I had thought about it just with a financial number in mind, I would not have quit in my 40’s. Well R2I helps with living the lifestyle and more. We just bought a holiday home (closer to a beach) , where we plan to spend few months a year. Would it have been possible for me to manage multiple homes in US? Definitely not.

Money is just one data point. With the free time and lack of regular paychecks comes adjusting to a newer lifestyle. While working I was always booked at the expensive hotels and like. After quitting FTEmployment it’s a different ball game. When vacationing with kids, we break the bank but otherwise not.

Last year a well regarded relative (a doc) asked why I was not employed at this age. I told him I’ll let him on a secret.. I have too much money that I can’t spend in this lifetime and the paycheck doesn’t motivate me. The drawback of living in India, every Ram Shyam and Ganshyam wants to know what you do and how you manage to live.

Cyberabadi, can you please share more details? Which city did you retire and at what age? How do you pass your time?

Our expenses are around 100-120k, considering a safe withdrawal of 3%, I think we would be comfortable with around $4 mm.

cyberabadi wrote: ↑Fri May 31, 2024 8:26 am Last year a well regarded relative (a doc) asked why I was not employed at this age. I told him I’ll let him on a secret.. I have too much money that I can’t spend in this lifetime and the paycheck doesn’t motivate me. The drawback of living in India, every Ram Shyam and Ganshyam wants to know what you do and how you manage to live.

The funny thing is even if you tell your friends and relatives how much you have made, they think no amount is enough. They have this psychology that any amount saved and invested people will run out of money. If you ask an average person how much money you will need to retire, they will tell you some crazy number which they themselves will never be able to achieve, like 20cr! This person hardly has 2Cr and they tell me even 50L is not enough in India, expenses are high and blah blah blah.

I just give up on such people. Such people are destined slog forever and die. I am really glad I learnt about FIRE and long term investing using mutual funds etc. So I have the confidence to walk away when I know I have hit my enough. But normal people will never be able to do that.

Thanks why when I tell them I have made enough, they still advise me; kuch toh karo business kholo, find some job. In their mind, you need to keep working and bringing in money and not just that, you also need to keep saving money too.

I have been in the US for 32 years now. One interesting thing for me was that the retirement/r2i goal post kept moving as I reached previously set goals.
Somewhere along the way r2i stopped being practical and especially now since both children have graduated from college and are working.
I have enough money ($13M +) which is a combination of Real Estate, stocks, cash and 401k and can retire when and where I want to. Funnily, now that I can retire, I still want to keep working for another couple of years and maybe retire after I turn 60.
The lesson learned for me is that there are no incorrect options whether r2i or LIA.
From a financial perspective, at some point we all get to mise-en-place. Everything will be in place based on your requirements and living means. While it can be an interesting discussion with friends/family, everyone's requirements are unique and they will likely have a very different view