Do Insurance Companies Limit How Much of Your 401K Savings You Can Invest in a SPIA?

[EasternSierraEph]

Hello, this question is for anyone with actual experience with insurance companies while purchasing a Single Premium Immedite Income Annuity:

Does the insurance company limit you to a certain percentage of your 401K that they will allow you use to purchase to purchase a lifetime immediate annuity?

If so, what is that percent per your understanding? Thanks in advance for your help. (Not buying right now, just planning).

[Stinky]

Hello, this question is for anyone with actual experience with insurance companies while purchasing a Single Premium Immedite Income Annuity:

Does the insurance company limit you to a certain percentage of your 401K that they will allow you use to purchase to purchase a lifetime immediate annuity?

If so, what is that percent per your understanding? Thanks in advance for your help. (Not buying right now, just planning).

I worked for a life insurance company for my entire career, and I have no idea about the answer.

I’d suggest that you call some agents who sell SPIAs and ask them. If there’s contact information on immediateannuities.com, I might start with them.

[whyamihere]

Hello, this question is for anyone with actual experience with insurance companies while purchasing a Single Premium Immedite Income Annuity:

Does the insurance company limit you to a certain percentage of your 401K that they will allow you use to purchase to purchase a lifetime immediate annuity?

If so, what is that percent per your understanding? Thanks in advance for your help. (Not buying right now, just planning).

There can be "suitability" constraints. For example some companies won't provide a policy to a retiree over 65 if they do not have enough liquid assets outside of their 401(k) and SPIA. These suitability rules vary from carrier to carrier, and on age / net worth / other information.

Exceptions can be made on 401(k) or IRAs, as some clients want a pension-like benefit but didn't have one offered by their employer.

There are many reasons not to put too much money at a given insurance company, suitability and liquidity are just two of those.

[EasternSierraEph]

Hello, this question is for anyone with actual experience with insurance companies while purchasing a Single Premium Immedite Income Annuity:

Does the insurance company limit you to a certain percentage of your 401K that they will allow you use to purchase to purchase a lifetime immediate annuity?

If so, what is that percent per your understanding? Thanks in advance for your help. (Not buying right now, just planning).

I worked for a life insurance company for my entire career, and I have no idea about the answer.

I’d suggest that you call some agents who sell SPIAs and ask them. If there’s contact information on immediateannuities.com, I might start with them.

I tried. They're harder to get in touch with than Jesus himself.

[Ron]

Yes, at least FIDO did when we applied for my/our first (joint life) SPIA back in 2007.

We had to "attest" that the price of the premium did not exceed 50% of the total retirement holdings (401(k)s, IRA's, etc.) value that we held at the time of application.

At the time, our premium was 10% of our total retirement investments.

- Ron

[EasternSierraEph]

Yes, at least FIDO did when we applied for my/our first (joint life) SPIA back in 2007.

We had to "attest" that the price of the premium did not exceed 50% of the total retirement holdings (401(k)s, IRA's, etc.) value that we held at the time of application.

At the time, our premium was 10% of our total retirement investments.

- Ron

Thanks Ron, for your insightful input.

[tj]

Hello, this question is for anyone with actual experience with insurance companies while purchasing a Single Premium Immedite Income Annuity:

Does the insurance company limit you to a certain percentage of your 401K that they will allow you use to purchase to purchase a lifetime immediate annuity?

If so, what is that percent per your understanding? Thanks in advance for your help. (Not buying right now, just planning).

I worked for a life insurance company for my entire career, and I have no idea about the answer.

I’d suggest that you call some agents who sell SPIAs and ask them. If there’s contact information on immediateannuities.com, I might start with them.

I tried. They're harder to get in touch with than Jesus himself.

Did you try blueprintincome.com ?

[capjak]

When I investigated a SPIA they would not allow greater than 50% purchase. You were to attest to having at least 50% liquid assets that were not be part of the purchase of a SPIA.

[Arlington2019]

When I bought my single premium deferred income annuity last year, I was told that any purchase under 25% of the retirement savings was automatically approved, anything over 25% had to be further reviewed and approved by the insurance underwriters, and nothing over 50% would be approved. The larger the total retirement savings, the more likely using up to 50% would be approved. When I bought mine, the total portfolio was a bit over $ 800K, and the $ 202K cost of the annuity represented about 23% of the total value. New York Life had no problem taking my money.

[EasternSierraEph]

When I bought my single premium deferred income annuity last year, I was told that any purchase under 25% of the retirement savings was automatically approved, anything over 25% had to be further reviewed and approved by the insurance underwriters, and nothing over 50% would be approved. The larger the total retirement savings, the more likely using up to 50% would be approved. When I bought mine, the total portfolio was a bit over $ 800K, and the $ 202K cost of the annuity represented about 23% of the total value. New York Life had no problem taking my money.

That's useful info. I would be OK with $800K in ten years in my 401K .