Many people use IRA’s to purchase Secondary Market Annuities.  Below are a few questions that we get frequently, and our answers.

Who do you use as a Self Directed IRA custodian?

gstc-logoThere are many self directed IRA custodians, but only a few are familiar with the secondary market annuity.

Out clear favorite that we prefer above all others is  Gold Star Trust Company.  Gold Star is the trust-only branch of a  mid-sized Texas based bank and has a specialized niche in the Secondary Market Annuities business.  Gold Star offers fantastic customer service and the lowest prices of any self directed IRA custodian, and is our preferred SDIRA partner.

To be fair, there are two other custodians we can work with for customers who already have accounts, namely IRAServices and Provident Trust Group.  Both understand Secondary Market Annuities and are easy to work with, but Gold Star is a superior value and quality of service.

If you plan to use an IRA, you’ll need to open the account first, and we have a simple form here to assist you.  Fill out and return to us, we’ll fill in your IRA documents for you and mail to you for your signature, with a return envelope too to make it easy.

You do NOT need to fund your IRA to open the account, but as it sometimes takes time to open, and then again to transfer money, we prefer to have IRA buyers open their accounts prior to reserving deals to prevent delays.

If you have an existing self directed IRA or want to use another custodian, please give us a call.  We can assist in making sure they understand SMA’s.

What Are The IRA Fees For Multiple SMA’s?

Depending on the custodian, there may be fees for adding multiple SMA’s to you IRA, but there are generally no fees for receiving funds from the insurance company into your IRA.

Now, depending on what you direct your custodian to do with your IRA funds in terms of distributions, you may incur fees, as outlined in their fee schedule.  That’s not something we control and is at your discretion.

Are the annuity payments taxed when the insurance company pays out or does the payment go to the IRA tax deferred?

As to taxes, none of the money coming in to the IRA from an SMA will be subject to withholding or taxation.  Money you direct to come out of your IRA for distribution to you however would be taxable.  Those withdrawals are all up to you and your accountant.

 

Are there any fees due to the insurance company while the annuity is owned by me?

While there are no fees to insurance companies, there are minimal costs for payment servicing .  Otherwise, SMA’s are What You See Is What You Get.  Now, additional requests like change of address or direct deposit setup may incur some fees at the payment servicing level.

Does the IRA Custodian charge a fee for the incoming payments or disbursements to me down the road?

Generally no.  There should be no costs associated with receiving a check into your IRA from an SMA.  There may be some minimal costs for adding multiple IRA’s, depending on your custodian, though this is not the case with Gold Star. All custodians, however, have some costs for disbursements, and depending on your case and intentions, we can help determine which is best for you.

Now, depending on what you direct your custodian to do with your IRA funds in terms of distributions, you may incur fees, as outlined in their fee schedule.  That’s not something we control and is at your discretion.