There is no magic bullet in a post-SECURE Act world that solves all of our client’s concerns. Instead, we use a combination of products to address the various new challenges, and together these products make the program effective.

The Protected IRA Plus Program takes distributions for protection and replaces the asset with efficiency. It accomplishes several things:

• The client’s tax liability spreads over a more extended period 
• A reduction of future RMDs and their associated taxes
• Partial conversion of existing funds into a Roth IRA
• In some cases, a drop in the client’s tax liability on Social Security benefits and Medicare pay premiums

The program tackles distribution, protection, and tax-free cash build-up.

The three versions of the Protected IRA Plus Program meet the most common sets of needs that different clients have.

Version one guarantees an income for the rest of your client’s life or a period they determine. 

Version two reinvests distributions into tax-favored redistribution vehicles, like a Roth IRA and life insurance, to provide tax-free cash accumulation while offering protection up to the original amount of the IRA. 

Version three concentrates on multiplying the IRA to leverage the original amount many times over in tax-free benefits for long-term care, extended care, or chronic-care.

Instead of deferring qualified money, the Protected IRA Plus Program redistributes these monies systematically, like clockwork, which reduces future RMDs and their associated tax liability, just like prepaying a mortgage. Plus, it will help protect the client’s funds from wild market fluctuations in the future.

Contractually guaranteed payments with SPIA

While not required, we often use SPIA (Single Premium Immediate Annuity) as a Protected IRA Plus Program distribution vehicle. There are numerous advantageous features of the SPIA:

• SPIA payments are dependable and unchangeable
• They provide a convenient method of leveraging capital for estate planning 
• They can guarantee income for the rest of the client’s life, for a specific period, or if the client passes away
• The remaining gross value will go to the family either in one lump sum or in monthly payouts to end the contingency
• There is no second-guessing, no market timing, or human intervention 
• With convenient, automatic set-up, there are few complications and no missed payments
• A SPIA insurance company can send checks to a payee to complete the plan
• They do a great job of accounting for and documenting the transactions

The Protected IRA Plus Program option with a real-world example 

Let’s look at a 74-year-old client with $985,000 in their IRA, whose taking only RMDs. He’s worth over $3 million, and he does not depend upon his IRA for income. 

If the client passes away, the net amount he would leave to his beneficiaries at a 30% tax bracket would be only $591,000. With his RMD paying out a gross of $41,837 and having taxes at 30%, he would net only $28,971 of income after taxes.

With the Protected IRA Plus Program, using a Single Premium Immediate Annuity, we got a life-only with a five-year certain, to pay out $108,564 gross right away. After taxes, there’s a  net of $75,995 a year.

Using $49,500 to buy a 1 Million $ life insurance policy to replace the asset with protection both for death and chronic and long-term care, the net income to the client is $26,495 a year after the taxes and insurance. Not bad, and guess what? They and their family have protection from losing money via long-term care costs and other factors. 

The Protected IRA Plus difference

The client’s income his first year would be $2,476 more if he only took out RMD’s and paid taxes, except he would have no protection whatsoever for either death, taxes, or long-term care. The net cost to this client to protect and perpetuate his fortune would only be less than ½ of 1%.  

The Net income with The Protected IRA Plus program is roughly 2.69% of the asset’s value the first year after tax and protection costs. This is equivalent to 3.5% being in the 30% tax bracket. It’s tough to find 2% per year, after-tax, ten, twenty, and thirty years into the future.

If a client died tomorrow with that amount in their IRA, at least 30% is going to Uncle Sam, leaving the family with a net value of $591,000.

With the immediate income option of the Protected IRA Plus Program, we not only get clients a 2.69% after-tax return on their money per year, but they also have a net value of a million dollars to leave to their heirs.

And it gets better. If clients have an extended or chronic care need, they’ll have protection for years. 

Why choose us to help your clients?

• We conduct all the marketplace research saving you a tremendous amount of time
• We provide a simple report that breaks down the numbers for your client
• We are independent and unbiased
• We have access to the top carriers at competitive rates and commissions, and we’ll shop over 40 companies for their protection policies and distribution products
• We’ve seen great success with our program in the marketplace
• We have experience selling and offer agents to assist in closing your client 
• We know how to get tough cases through underwriting, so we can get the deal done

Ready to go over options with the Protected IRA Plus Program?

If you have qualified clients whose assets you want to protect while preserving the posterity of your book, book a call today.