Entire Roth in one Annuity for Death Benefit/Legacy only

Submitted by helen roland on Sat, 2020-02-15 17:18

Roth money for legacy only. I am 75 yrs old. I have existing Roth (over 5 years) in Jackson Annuity Fixed and Variable.
Should I add more Roth monies I received from a civil/voluntary service account and converted to Roth recently?
My advisor (does my taxes) said the fixed 4% ends at 81(6 yrs) and putting more Roth money into this annuity with existing Lincoln Roth annuity qualifies the new money Roth money to override the 5 year rule. Is this true?
Is this a good idea to invest all my Roth (large amount of money) into this Jackson Annuity? After 6 years I will not be making 4% fixed interest and after age 81 counting on the Variable side to make it grow. If after 6 years the stock market went below my initial premium investment, death benefit will be based on the 6 years (between age 75 and 81) and/or highest quarter. I will never lose my Roth premiums ever.
Should I only put part in this Lincoln fixed/variable annuity and part in another fixed annuity?
At my age, should I go with CFP and invest in mutual funds at this time?



Submitted by Alan - IRA critic on Sun, 2020-02-16 00:07

  • Since you already have a fully qualified Roth IRA, any additional investments including adding more to the current Roth annuity are also qualified and tax free. Therefore, you are no longer subject to any 5 year holding requirements in any of your Roth accounts if you have more than one. 
  • As for which investments you should make with your Roth money, that cannot be determined without looking at your entire financial picture, your risk tolerance, and your beneficiary goals. While all distributions to your beneficiary will be tax free including the additional death benefit, the beneficiary will be subject to the 10 year rule under the Secure Act unless they are disabled or less than 10 years younger than you. While these are IRS rules, the annuity contract itself could be more restrictive than the IRS rules, so you would need to check the contract to see what the annuity options will be for your beneficiary.
  • Note that failure of life insurance companies is extremely rare, so you would not necessarily need to use another insurance company to hedge against default of Jackson. A couple decades ago a large life insurance company failed, but the other companies bailed them out to protect the image of the industry, and I am sure that would happen again barring an industry wide meltdown. 

Add new comment

Log in or register to post comments