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Annuities · Money In Motion with Klaas Financial

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This is money in Motion with Class Financial, a fun and informative show designed
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to help you get answers to all your retirement questions in one place. Talk
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you this morning with our retirement planning professionals from Claus Financial, C J.
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Claus and Malia Quavis to join us. We'd love to have you. If
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you've got a question, I got's phone, give us call six O eight
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three two one thirteen ten. That's six O eight three two one thirteen ten.
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To get on the air this morning, don great. Can learn more
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about Class Financial on their website class financial dot com. That's klaas Financial dot
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com and the telephone number six O eight four four two five six three seven.
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No charge for theinitially get to no appointment dech Class Financial. It will
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be complimentary to you again. They're number six O eight four four two five
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six three seven. And to get on the air this morning, he's got
0:48
to call the station six O eight three two one thirteen ten. That's six
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O eight three two one thirteen ten. As mentioned, joined this week by
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C. J. Claus and Malia Quavis CJA. How are you doing this
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morning? I'm doing great? How are you Sean doing really well? CEJ
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and of course we've got Malia along as well. Malia, how are you
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enjoying this beautiful day. It's a very nice day. We're happy to be
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here. Yeah, it's happy to have you along. And we've got great
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conversation ahead. We're gonna be talking about some of the complexities when it comes
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to things as far as different types of retirement products and of course annuities.
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I think a lot of folks have questions about that. We're going to kind
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of go through what they're all about, some of the things you need to
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be aware of and kind of a little bit of an understanding of what they
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all involved. Will be doing that this morning and talking about that all.
1:32
Speaking of great things that we're going to be doing on the show. We'll
1:34
do the Class Quiz Question Week a little bit later on the program. Your
1:36
chance to win a fantastic prize from our friends at Class Financial this week,
1:40
a twenty five dollars gift card to Best Buy could be yours little tip if
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you listen closely to the program, Oftentimes the question and answer to the Class
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Quiz Question Week come up during the show. Tell you a little bit later
1:49
on in the program about how you can exactly when that will do that again
1:53
later on the program, So pay close attention between now and then. Speaking
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of the class quiz question week, before we start this week's conversation on annuities,
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let's take a look back at last week's program. Get the question and
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the answer there as well. Maliah. Yeah, so last week we had
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a great conversation focusing on small business owners and the challenges that they face,
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and one of the one of the items we covered was ways in which to
2:16
put away money if you're a business owner. And we don't try to be
2:21
tricky with our questions on here, but this one stumped a lot of people
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last week. However, Warren of Madison correctly answered this question true or false.
2:31
A solo four oh one K is available to business owners who have employees,
2:37
and he correctly answered that is false. A solo four oh one K
2:40
is designed for business owners who do not have employees. So if that's something
2:45
you want you're intrigued about. If you're a small business owner and you want
2:49
to get some more information about the best ideas for you to sock away money,
2:53
call our office and we can give you the lowdown. Once again,
2:59
that phone number six eight four four two five six three seven. At first
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spoy'man not going to cost you a thing. At class Financial, it will
3:05
be complimentary to you again their number six eight four four two five six three
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seven. Also can listen back to this previous show's podcasts, including our conversation
3:13
last week, especially if you're a business owner. A lot of great information
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there. Just head on over to class financial dot com. That's Klaas Financial
3:22
dot com. You can subscribe with the podcast. Also sign up from the
3:24
website for the weekly Market Pulse newsletter. Great weekly email, we'll snapshot of
3:29
what's been going on the markets. Again, that available to you at class
3:31
financial dot com. So I know, of course when folks start talking about
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retirement, you start hearing this term annuity coming up. And we're gonna be
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talking a little bit this week about what that is a little summary of these
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projects and help people get a little bit of education when it comes to their
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complexities and c J starting off, what's kind of the background on annuities.
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How long have they have they been here in the United States? Yeah,
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good questions. So annuities, as you mentioned, Sean, obviously, when
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you get into retirement planning, this concept of annuities starts to pop up.
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As a matter of fact, if you're in our industry, you'll often hear
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like pensions referred to as a lifetime annuity income stream, or you'll even here
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like companies say, yeah, we have annuitized revenue, which is very interesting.
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What do you mean you have annuitized revenue? Often subscription model services of
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a business. Think Netflix is an annuitized revenue stream. It's an ongoing,
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consistent revenue stream. So this is the concept of annuities, right, ongoing
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revenue stream in the case of retirement, ongoing income stream. But annuities have
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a long history in the US, going back to the mid seventeen hundreds.
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Believe it or not. One of the earliest recorded uses of annuities in the
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United States was by the Presbyterian Church in seventeen twenty. The purpose was to
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provide a secure retirement to aging ministers and their families, and was later expanded
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to assist widows and orphans. In eighteen twelve, Pennsylvania Company Insurance was among
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the first to begin offering annuities to the public in the United States. Today,
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well recently over one hundred years later, annuity sales had a record year
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in twenty twenty two in the United States, so just last year with sales
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of over three hundred and ten billion dollars in annuities. So, as you
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can imagine, since we interact with annuities in retirement planning, we thought it
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would be helpful to give you a clear explanation of what annuities are and kind
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of some things to be aware of. Although individuals in our company are insurance
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license and certainly understand the benefits of annuities and what they can offer, we
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do not actually sell insurance based products to our clients, and so ultimately we
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can speak to them in an authoritative way because of our licensing, but we
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do not We do not sell them to our clients. Now, with that
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being said, I don't want anybody to misunderstand me as a kind of like
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fee based financial planning firm that does not sell products, which we're proud of
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that it limits conflicts of interest. Sometimes people can think, oh, so
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you're the anti a new company. Often people will come in and be like,
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you're also the anti real estate company. You don't want people to invest
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in real estate. You want to invest in stocks and bonds that could not
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be further from the truth. A matter of fact, there can be many
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wonderful fits for annuities. A matter of fact, they're going to be incredible
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opportunities in real estate that certainly cannot be accessed in the public markets. So
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please don't ever misunderstand. We come into this with a pretty open mind,
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given that we don't get paid to sell or we don't get paid a commission
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to sell any particular product, and therefore we remain pretty open. If it's
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a good opportunity, we will suggest you consider it. So what is an
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annuity? And annuity is a contract between you and an insurance company that guarantees
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lifetime income in retirement. You pay a lump sum or a series of premiums
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to an insurer and in turn they provide income payments to you in retirement.
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You can begin to receive those payments right away known as a spa single premium
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immediate annuity, or at a later date of your choosing known as deferred annuities.
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Some annuities can make sense for certain situations, but truly understanding the products
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and the internal charges, of course, is going to become very critical.
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So I think number one item we would say is definitely linked to retirement.
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Potentially a benefit to you if you're looking for a source of consistent income in
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retirement, but absolutely something to slow down and make sure you're aware of,
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because when you buy these things, you're typically you know, you're typically going
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to leave the money in there for a really long period of time. We're
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going to break down and just a moment. Those things to kind of consider
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when you if you are thinking about that, and understand before you assign on
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the dotted line, so to say, speaking of opportunities, a great opportunity
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right now. If you've got a question for CJ and Malia, we would
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love to have you join us here on the program six eight three two one
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thirteen ten at six eight three two one thirteen ten CJ. Clossomlik Quavis our
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retirement planning professionals. They come to us from Class Financial online Class Financial dot
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com and the telephone number six O eight four four two five six three seven.
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No charge for that initial get to know you appointment to a Class Financial.
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It will be complimentary to you again the number six to eight four four
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two five six three seven. So, CJ, what should folks understand before
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considering an annuity? Yeah, I kind of hinted at this already. But
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annuities are long term investments specifically designed for retirement. Remember that word for retirement.
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So here's the key. If you put non retirement money, so think
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think not ira, not roth ira. So if you just take what we
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call taxable money, so this money you've already earned and paid taxes on and
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you put it into an annuity, you actually cannot take that growth or that
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money out of that annuity until age fifty nine and a half or you will
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pay a ten percent penalty on top of the income taxation. So annuities get
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complex. You go, wait, wait, wait, I already paid tax
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on that money, and I put one hundred grand into an annuity at fifty
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and I'm five, and I decided to change my mind. I want to
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do something else. And they go, well, you haven't paid tax on
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the gain yet. Open, by the way, you're not fifty nine and
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a half. So you're going to pay tax on the gain and a ten
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percent penalty. And people go, what in the world is happening? And
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they occasionally they'll go, okay, fine, we'll just give me back what
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I put in and then you can leave the growth in there. Because that
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what I put in, I've already paid taxes on and they go, ah,
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there's this concept of LIFEO, last and first out on an annuity where
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you have to take the gain out before you can get to the basis.
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Long story short, if you're gonna move towards these annuities, you've got to
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really be aware of the benefits, yes, but also the limitations, the
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restrictions, and so if you are younger than age fifty, you should most
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likely be cautious with putting a lot of money into the annuity unless you're very
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clear that you can't touch that growth until fifty nine and a half, or
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unless you're just putting retirement money into an annuity, which is a whole different
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discussion. Really important things to consider and to be aware of. Us.
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We talked this morning with j Class and Malia Quaevis. They are our retirement
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planning professionals from Class Financial online, Class Financial dot com that's Klaas Financial dot
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com. I mentioned, of course listening to the podcast, subscribing online as
10:11
well as getting that signed up for the weekly market paulse newsletter. Didn't mention
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that you can learn a little bit more about Class Financial on their website.
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There's separate divisions. Also, get to know the team at Class Financial all
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online Class Financial dot Com. That's Klaas Financial dot Com. Telphon over for
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the office right here in Madison. Six O eight four four two five six
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three seven. No charge for the initial gets to Know you appointment at Class
10:33
Financial. It will be complimentary to you. Again their number six O eight
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four four two five six three seven. And to get on the air this
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morning, it's the regular studio number six O three two one thirteen ten.
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That's three two one thirteen ten. So, Malia, what are the different
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types of annuities that are out there that are being offered? Yeah, so
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c Jerry hinted at these, So there's and again we're trying to break down
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something that's very complex into just a few minutes here, So do your own
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research as well. But two basic types of annuities would be deferred annuities and
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an immediate annuity. So deferred annuities those are considered your begin You begin in
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the accumulation phase, so the owners paying a premium. As CJ mentioned,
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you're putting in after tax money into the annuity, and then you're choosing from
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available investment options. So during this phase, earnings typically accumulate on a tax
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deferred basis. That's why people are attracted to these. Owner has the flexibility
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to start the distribution or income phase later, often coinciding with their desired retirement
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date. So it's kind of like a a holding pot and then you make
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the decision when you want to start them. And within the deferred annuity category,
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there's two different types. There's fixed annuities and those offer a fixed rate
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of return for a specified period of time. It could be three years,
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five years, or above. You can select the time period might be right
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for you based on your investment horizon and retirement income needs. So I would
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say a lot of people think about fixed annuities similar to CDs. They have
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a guaranteed interest rate and that's that makes them attractive to some people. But
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the more complex different annuities is definitely the variable annuities and those underlying those insurance
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products. There are investment options that participate in the market, so the value
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of the annuity contract will fluctuate based on the performance, just like the market
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brings forth every day for us of those underlying investment options. So the thing
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about variable annuities to be very very clear on is there's a lot of different
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writers that can be put on them. They're usually optional living benefit writers.
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Those cost extra. Everything has a cost to it, and they can provide
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guaranteed lifetime income regardless of how the annuities invest The annuity in estments perform.
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However, you need to read the fine print because sometimes those can be exhausted
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as well. You have to really understand what you're getting yourself into. So
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those are the two different types of deferred annuities, fixed and variable. Then
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we have what's called an immediate annuity again a CJ mentioned, which refers to
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a single payment that you're basically putting into this contract and it can go directly
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into the distribution phase, meaning Okay, I've got one hundred thousand dollars,
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I put it into this contract and then I'm going to have it literally pay
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income benefit within thirty days or soon thereafter. So that's funded by that lump
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sum payment. So sometimes people look at the spears as we call them,
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as a consideration if they don't have pension income, which many people don't.
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This can give people, you know, that peace of mind that I know
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I'm going to get this deposit every single month as an income string. Interesting
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stuff as always from our retirement planning professionals maliq Us and C. Jack Lass.
14:01
Of course they come to us from Class Financial. Great website, Class
14:03
financial dot com. That's Klaas Financial dot com. Learn more about Class Financial
14:09
online. You can also subscribe to the podcast and the weekly market paulse newsletter
14:13
all at the website. Obviously, mornings can be a little crazy sometimes dropping
14:18
off the kids, grandkids at school, picking up some coffee, those kind
14:20
of things. Maybe a miss part of the program. You can always listen
14:22
back, also share the podcast. Just handing over to class financial dot com.
14:26
That's Klaas Financial dot com. The telephone number for the office here in
14:31
Madison six O eight four four two five six three seven, No charge for
14:35
that. Initially get to know your appointment det Class Financial. It will be
14:37
complementary to you. Again the number six O eight four four two five six
14:41
three seven. And if you have a question for CJM. Melia, we'd
14:45
love to have you join us this morning. I gotta do is give us
14:46
call six O eight three two one thirteen ten. That's six O eight three
14:50
two one thirteen ten. We haven't talked fees, yet we're going to get
14:54
to those and so much more as well as your call as Money in Motion
14:56
with Class Financial continues next right here thirteen ten WIBA. This is Money in
15:05
Motion with Class Financial, a fun and informative show designed to help you get
15:09
answers to all your retirement questions in one place. And the phone lines are
15:13
open here at the station six O eight three two one thirteen ten. That's
15:18
three two one thirteen ten. If you have a question for our retirement planning
15:22
professionals from Claus Financial, CJ. Class and Malia Quavis love to have you
15:26
join us this morning again the number six eight three two one thirteen ten.
15:28
The website for Class Financial. It's an easy one Class Financial dot com that's
15:33
spelled klaas Financial dot com and their telephone number six O eight four four two
15:39
five six three seven. No charge for that initial get to know you appointment
15:41
to at Class Financial. It is complementary to you again. They're number six
15:46
O eight four four two five six three seven. We are talking about annuities
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this week, and I'm guessing that there's probably is with everything. Nothing nothing
15:54
in life is free, and there's obviously going to be some fees and things
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like that, what do we need to understand then when what might we find
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when it comes to fees within an annuity CJ. So I'm actually going to
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talk about that today. We'll bring him back. So, yeah, deep
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within them. And sometimes these are really good questions you need to ask if
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this is something you're considering. So there can be some disadvantages with annuities again,
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high fees and limited liquidity. So again, these products are often complex,
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especially the variable annuities, and they can be hard to understand even if
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you're well educated. So we really say buyer beware. Doesn't mean you shouldn't,
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but you should take your time understanding what you're getting into. So for
16:38
starters, almost all annuities have commissions, so it shouldn't be a shock.
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This is where fees come in, and those can be anywhere from one to
16:45
ten percent of the total value of the contract, depending on the annuity type.
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So again we're not against people getting paid, nothing wrong with that,
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but you really need to understand that what you're getting it needs to be worth
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worth it for you in the long term, long term for your retirement situation,
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and understand that you are paying fees. So the more complex the annuity,
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often the higher the commission. More simple and straightforward the contract, usually
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the lower the commission. So what's funny is you don't see this. You
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write a check perhaps for one hundred thousand dollars, you don't see that commission
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come directly out of there. But you should be aware that there's an incentive
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to that person selling it. So that's where we kind of question sometimes whether
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that's the best move for a client or not, because perhaps a person selling
17:38
it to you has some other concept of why it's the right one for you.
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So the two things we want you to look out for for sure are
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surrender charges. So surrender charges, what that really means is if you decide
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to pull your money out of an annuity within the first several years after you
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buy it. Let's say you figure, you know, I need that money.
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I'm not thinking I want to take it on a yearly basis, I
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just need it all back. Then you're gonna pay quite a penalty. And
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those surrender charges typically run about seven percent of your account value if you leave
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after one year, and the fee generally declines by one percentage point a year
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until it gets to zero after year seven. Or eight if it's a longer
18:22
annuities. So we have seen, believe it or not, annuities that have
18:26
hefty year surrender charges, up to even twenty percent in that first year.
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So we're just like, ah, be careful, and CJ can mention after
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I'm done with this, he can mention. Just a quick synopsis of years
18:40
ago, we dealt with a client who was very young that got put into
18:42
annuities and how horrible those fees were as they tried to extract it back out
18:48
because it wasn't the right move for them. The second thing we want you
18:52
to understand is there's generally high annual fees. If you move money into a
18:56
variable annuity, you'll also encounter high annual fences. So you'll have the annual
19:00
insurance charge that could run one and a quarter percent, annual investment management fees
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which could range from another half percent to more than two percent, and then
19:11
there's fees for insurance writers and that could add another six tenths of a percent.
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So if you add them all up, you could be paying two to
19:19
three percent or more just to have the annuity in place. And what we
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see lots of times is these contracts get heavy with these writers on them,
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and many times you're never even going to use all the different writers that the
19:33
person has nicely put on for you. So we really want you to know
19:37
what you're getting into before you sign on the dotted line. Talking this morning
19:41
with our retirement planning professionals C. J. Clawson Willie Acquavius. If you've
19:45
got a question, love to have you join us this morning. Six O
19:47
eight three two one thirteen ten. That's six O eight three two one thirteen
19:51
ten and Chris checks in. Chris, welcome to the program. You're on
19:53
the air with C. J. Lawson Willie Aquavius of Claus Financial Hill.
20:00
Listening to that last part, I think I have my answer. I don't
20:03
know if I want to pay all the fees, but I am fifty nine
20:07
and three quarters, I guess, and I have money to put into something.
20:12
I'm not going to retire probably till fifty seven. And I was speaking,
20:18
you know, should I put money into an annuity now or should I
20:22
put money into some of the high yielding cbs that are out there? Great
20:29
question, Great question, Chris. I don't know, meaning I shouldn't sound
20:36
so cavalier. We would obviously have to sit down and just kind of understand
20:40
your overall objectives and risk tolerance and what you're trying to accomplish. But but
20:44
certainly your question is a good one. You're you're over that fifty nine and
20:48
a half threshold that we talked about. You're looking for something to kind of
20:52
supplement, you know, your future retirement at sixty seven, and so certainly
20:56
an annuity could be one of those one of those can iterations. Now,
21:00
as Malia just got done talking about, the question is what kind of an
21:03
annuity? We're breaking them up into kind of really big broad categories of variable
21:07
and fixed annuities and deferred versus versus immediate. But truth be told, there's
21:12
actually even more subcategories to that. There's equity indexed annuities. There's there's variable
21:18
annuities with income writers that create lifetime income. There's there's many different variations of
21:25
these things. And so you would just want to sit down with somebody who
21:29
hopefully has a limited number of conflicts of interest with you to talk through is
21:33
this truly what I should do? Or you kind of hit the nail on
21:36
the head, Chris, Or should I just put it into a high yielding
21:38
CD and maybe ladder out some CDs for two or three years and try to,
21:42
you know, get five five and a half percent there. So unfortunately
21:47
we can't answer it because I just don't know your big picture finances are risk
21:49
tolerance. But you are on the right track asking really good questions. It
21:53
is a great question. It's great to know that that is on your mind
21:56
and definitely a good time to start a conversation as we're talking this morning with
22:00
our retirement planning professionals from Class Financial, CJ, Class and Malia Quavis.
22:03
The website class Financial dot com. That's Klaas Financial dot com. The telephone
22:08
number six O eight four four two five six three seven. No charge for
22:11
the initial gets to know you appointment tech Claws Financial. It will be complimentary
22:15
to you again the number six O eight four four two five six three seven.
22:18
We're to our conversation with CJ and Malia and you as well. We're
22:22
going to talk about what happens if you pass away? Doesn't it do any
22:26
makes sense? What's the what are the details? What I need to know?
22:27
We get some of the important stuff next as Money in Motion with Class
22:30
Financial continues right here on thirteen ten WI VA. This is Money in Motion
22:41
with Class Financial, a fun and informative show designed to help you get answers
22:45
to all your retirement questions in one place. Talking with our retirement claning professionals
22:49
from Class Financial, CJ Class and Malia Quavis. The website Claus financial dot
22:55
com. That's Klaas Financial dot com. I will say if you are if
22:59
you are hungry and you see the website, you will suddenly definitely be craving
23:03
apple pies again. Yes, up at Claus Financial dot com telephone number six
23:10
or eight four four two five six three seven. No charts that initially get
23:14
to know your appointment to a Class Financial. It is complimentary to you.
23:17
Again. They're number six or eight four four two five six three seven talking
23:21
with our retirement planning professionals, Malia Quavis and c J. Class And a
23:23
couple of minutes we'll be doing the Claus Quiz question week chance to win a
23:26
twenty five dollars gift card two Best Buy. Talking this morning about annuities and
23:30
I think one of the questions, folks, is we talk each and every
23:33
week always that tax question kind of it starts lingering in people's minds. What
23:37
about taxes and annuities, and what about things like deferred growth what happens there
23:42
CEJ Yeah, so the tax rules can vary based on the type of annuity
23:48
and the type of money that you end up putting into an annuity. So
23:51
again we're trying to cram a bunch of content down into you know, what
23:56
ends up being about fifteen minutes of airtime that we talked through here. But
24:00
feel free to call into the office you have any additional clarifying questions, or
24:03
talk to your financial advisor. But you can buy an annuity with funds from
24:07
an IRA. Let's say, so you could transfer an IRA, so retirement
24:11
money in an IRA, SABE, Schwab, fidelity whatever, into an IRA
24:15
with an annuity or into an annuity. So think of it this way,
24:21
IRA, ROTH, IRA, Individual taxable. Those are account registration categories that
24:27
the IRS controls. Annuity is a product, and so an annuity. It
24:33
would be the equivalent of me saying like I put my IRA money into an
24:37
a CD or I put my IRA money into a mutual fund. The annuity
24:41
is the product that you're putting it into. So you can certainly use retirement
24:45
money and if you do that, then all the normal retirement account rules apply,
24:48
right, so I put my money in, I can't draw it out
24:52
till fifty nine and a half without a penalty. And then when I pull
24:55
money out of that IRA, it's income taxable all of it because I haven't
24:57
paid tax on any of it. The only thing is there's another layer of
25:00
complexity when you put your IRA money into an annuity, because the annuity product
25:04
itself can have a required holding period where you put money in and then it
25:10
has to stay in there for at least five or ten years before you avoid
25:14
the product level penalties. Now where it gets trickier is if you use non
25:18
retirement money. Think of this as just that after tax money that Malia was
25:22
talking about earlier. If you put that money in there, well, then
25:26
as we talked about, it defers the growth. Whereas if you put that
25:29
money in to say a brokerage account with Fidelity or Schwab, it doesn't defer
25:33
all that growth as it grows, you get at ten ninety nine to pay
25:37
some tax on it. Even if you're not using the money inside of an
25:40
annuity. The beauty can be that you defer the growth on that taxable money
25:45
that you put in their original or I should say that that after tax money
25:48
that you put in there originally, so it grows tax deferred. But you
25:52
just need to be aware that when you pull that money out, unless you
25:56
annuitize, when you pull the money out, it is lifot treatment last in,
26:02
first out, So when that money comes out, you must first pull
26:06
out the growth, and that growth gets taxed at ordinary income tax rates.
26:11
Okay, so that's the key here is you're converting what would have been potentially
26:15
somewhat capital gains tax rates into an ordinary income tax rate. Now, again
26:21
a lot of complexity because if you annuitize and turn on a lifetime income stream,
26:26
then there's something called an exclusion ratio, which allows you to take out
26:30
part part basis in part gain YadA, YadA, YadA. I guess what
26:33
I'm trying to say is make sure you talk to somebody who knows what they're
26:37
talking about here, who can really walk you through the finer details, and
26:41
just know we're not warning you against using them. They can be spectacular for
26:48
people who are worried about longevity risk. Longevity risk is living too long and
26:52
not having enough money, so annuities can be a great solution for addressing longevity
26:57
risk when you don't have a large pension or social Security income, but you
27:03
just want to make sure you slow down before you put a bunch of money
27:04
in. I'm going to talk a little bit about when they do make sense
27:07
and some things to think about there with C. J. Claus and Malia
27:11
Quamas, our retirement planning professionals from Claus Financial. I mentioned the website class
27:15
financial dot com that's Klaas Financial dot com and a telephone number six to eight
27:19
four four two five six three seven. No charge for that initial get to
27:22
no reappointment to a class financial. It will be complimentary to you again the
27:26
number six eight four four two five six three seven. So let's talk about
27:30
when an annuity may make sense and what would happen then to the money if
27:33
if I were to pass away. Yeah, so we've hinted at this and
27:38
what we would say is annuity is can make a lot of sense for people
27:41
who are worried about that longevity risk. So again that is the Hey,
27:45
everybody in my family lived beyond age one hundred and some of them ran out
27:48
of money, you know, before they ran out of life, and so
27:52
I don't want that to happen you know, should I consider an annuity.
27:55
The answer to be absolutely, that's a great consideration for somebody like that.
28:00
Additionally, people who don't have large pensions from their employers. So for those
28:03
of you who are listening who are working with the State of Wisconsin in any
28:07
capacity, you all know that you have that WRS ETF pension WRS by the
28:12
way, it's just the acronym for Wisconsin Retirement System and then ETFs Employee Trust
28:18
funds if you want to know. But that pension is spectacular, and that
28:21
pension is a form of an annuity. It addresses your longevity risk because once
28:27
you retire and turn on that income stream, depending upon the way that you
28:30
claim it, it becomes a lifetime income for you and maybe even your spouse.
28:34
By the way, so you get the idea. If I'm working for
28:37
the State of Wisconsin and I've got eighty thousand a year coming in from my
28:41
pension after i retire as a teacher or a nurse, and then I've got
28:45
another twenty thirty thousand coming in from Social Security, well I'm not a prime
28:49
candidate for buying an annuity, m I because I already have two annuities through
28:53
Social Security and the state of Wisconsin. Conversely, however, if I worked
29:00
for myself my whole life, I'm self employed and I get later on in
29:03
life and I realize I've put all my money back into my business, and
29:07
then I go to sell it and I don't get as much as I thought,
29:10
and I just have a low Social Security benefit and no pensions. Well,
29:14
gosh, if you have longevity in your family, there may be a
29:17
real consideration for putting some money into an annuity. And finally, if you
29:23
become the beneficiary of an annuity, this would be the time that I would
29:29
really say pause big time, because if you don't know what it is that
29:33
you're doing without annuity, after you inherit it, there can be irrevocable tax
29:38
damages that impact you in the year that you inherit those annuities, because most
29:44
often what people will say is like, I don't know, just give me
29:45
the money. And unfortunately, even when it's non retirement money inside of those
29:52
annuities, there's no what's called step up in the basis, and therefore,
29:56
if you just distribute your portion, you can really get walloped with some taxes
30:03
there, so really seek out wise counsel. If you end up inheriting an
30:07
annuity. So many important things to be considering, and of course we talk
30:10
about planning and taking these things slow and understanding everything that you're doing as it's
30:15
getting done. That's the importance of having guidance. As we talk with C.
30:18
J. Class Emilia Quaevis of Class Financial, don't forget we chat each
30:21
and every Thursday morning at eight o'clock. If you miss any part of the
30:23
program, you could always listen back online. The podcast available at class Financial
30:29
dot com. That's klaas financial dot com. You can learn more about Claus
30:33
Financial on that website as well. Their telephone number six so eight four four
30:37
two five six three seven. Don't forget, it's no charge. Here's that
30:40
initial gets no you appointment tech Class Financial. It will be complimentary to you.
30:44
Again. The number for the office six to eight four four two five
30:45
six three seven. Go on to hold out at that telephon number as well,
30:48
because it's time now for the Class Quiz question the week. It works
30:52
like this, just a moment, I'll ask you the claus quiz question leak.
30:53
You will then have thirty minutes from the end of today's program to call
30:56
the Class Financial office right here in Madison at six SO eight four four two
31:00
five six three seven. If you are the first car with correct answer,
31:03
you win this week's prize, which is a twenty five dollars gift card two
31:07
Best Buy. This week's claus Quiz question week is this true or false?
31:11
If you take money out of an annuity product prior to the age of fifty
31:15
nine and a half, will you have to pay a penalty of ten percent?
31:21
True or false? Telephone number six SO eight four four two five six
31:25
three seven, first call it. Correct answer win. That's twenty five dollars
31:27
gift card too Best Buy. Don't forget that it is Class Financial's office right
31:30
here in Madison as well. No charge for the initial gets, no apployment
31:33
at Class Financial. It will be complimentary to you again the number six to
31:37
eight four four two five six three seven sej Malia. It's always informative,
31:41
always great chatting with you guys. You enjoy this most beautiful day. Thanks
31:45
HUNS. News comes your way next right here on thirteen ten w IBA.
31:52
This is Money in Motion with Class Financial Asset Advisors, LLC, a registered
31:59
investment advisor registered with the SEC. The content of this show is for informational
32:05
purposes only, and should not be considered individual investment advice. Class Financial does
32:09
not offer tax or legal advice. Any opinion offered during the course of this
32:15
show is the opinion of that particular investment advisor representative, and not necessarily the
32:20
opinion of Class Financial.