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Qualifying The Called IRA Investments

Finishing Well / Hans Scheil
The Truth Network Radio
October 17, 2020 8:30 am

Qualifying The Called IRA Investments

Finishing Well / Hans Scheil

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October 17, 2020 8:30 am

Hans goes over what qualifies as “qualified money”, as well as explains the advantages of this. Then he tells Robby the story of a client he had any how he used his IRA in order to leave the legacy he wanted. 


Don’t forget to get your copy of “The Complete Cardinal Guide to Planning for and Living in Retirement” on Amazon or on for free!


You can contact Hans and Cardinal by emailing or calling 919-535-8261. Learn more at 

Rob West and Steve Moore
Rob West and Steve Moore
Rob West and Steve Moore
Rob West and Steve Moore

Hey this is Mike Swick from if not for God podcast our show stories of hopelessness turned and I hope your chosen Truth Network podcast is starting in just seconds. Enjoy sharing. But most of all, thank you for listening and for choosing the truth podcast. This is the Truth Network welcome to finishing well brought to you by Cardinal guy, certified financial planner belonged shy best-selling author and financial planner helping families finish well over 40 years of finishing well will examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Medicare IRA long-term care life insurance and investments and taxes. Now let's get started with finishing well welcome to finishing well certified financial planner Hans Schild today show qualifying but called IRA investments and if you're sitting there going I don't know that means Robbie. That's good because the idea of qualifying the called.

You might've heard that the dog doesn't call the qualified, he qualifies the called and the reason why does that have to do with discipleship right which means an enthusiastic learner and back to Matthew 28 of course is a car salesman always took great interest in Matthew 28. It was called the great commission ponds and so immediately was drawn to that of the great commission is the no go ye therefore and make disciples of all nations, and I really think if you were to get to know Hans, the thing that I marvel at it if it our relationship is. He is truly a disciple and a disciple of people. In other words, he is an enthusiastic learner. He is interested in learning about what you do, your story how you reflect God, and those kind of things and so it's in this as it appears to me as we go into different relationships. God is wanting us to be disciples obviously our to be disciples of Jesus, but Jesus is and everybody that she ever met and in a part of what we get to do is disciples is fine them in there and then no see what we can do to help that person show them often. At the same time show Jesus off. That is, I'm sure if you're like me you love it when other people are looking for Jesus and you cure and so this is kinda how we qualify the called. As we go about being a learner and even in even long-standing relationships like my wife like I get home for dinner tonight if I just make a bunch of assumptions on what she's going to say and do. I'd miss out on a lot of opportunities to sit and listen and hear her heart and maybe where she's seeing God and something that I wanted to limit your and so I think today show your to be excited that Hans will not only teach you about qualified IRAs, which that's an interesting term that he is going to teach you what he learned from I relayed beyond cool disciple that I guess Fran call Dr. Bob: Dr. Bob and the bookies he's on Marshall is his name is we gave everybody an alias protocol and Dr. Bob.

He's been passed on these been in heaven for eight years and he became a client in 2012, but you know first before we talk about him. We want to like soups or how we ended up on this was such a thing is called qualified money and that's really kind of an Indian industry term that people like me years and I have to laugh when people like me try to use that term when they're talking to consumers and people. I want the world is qualified money and what is nonqualified money and so I'm in a just give a little definition is the qualified money is IRA money 401(k) money.

Even Roth IRA money.

It means that this money qualifies as an IRA met all the rules, regulations, contribution limits where the money came from, how it's managed how it's held, how it's invested how it's going to be paid out when you want distributions all others. So we refer to something as qualified were talking about IRA money and when we say nonqualified. That's all the other money.

That's not an IRA experience. It's a little weird.

We don't necessarily use it, but sometimes we have to use it more.

Talking to consumers, knowledge, and I were talking about that as I was thinking that if I'm trying to finish well right.

One of the biggest things we talked about the last few weeks as you know building in Moroccan and doing some planning a great deal of that planning is deciding how your music qualified money versus the unqualified monitor will sure. And so the thing that makes a qualified Colossus of Roth is you've never paid taxes on minutes just if you really just want to boil it down is you've enjoyed the benefit of no taxes on this money and you continue to enjoy the tax benefits as long as you leave it in there, but I would say the IRS is going to get their money nations either your hold for a long time and then you're going to die and go to your beneficiaries and then there can cash it in there to pay the taxes maybe at higher rates in years or you can start distributing this over your retirement which is what it was intended for, and then you can pay the taxes on the distribution and then you can live on the rest. So some from the difference between IRA and Roth IRA in a regular IRA that both qualified money correct.

This is actually learning as we go here spouse. This is a concept I did not know partnerships itself with the Roth IRA it's qualified money but I've paid the tax on it yet. I don't have to pay tax on the recent that it would just stand out as of the Roth IRA as it makes no interest that I'm not getting tax on the Maryland sex free. That's the benefit that's that's that's the real benefit in then you can pull money out of it tax-free. And then you can give it to your kids and your kids won't know at your death and your kids will have to pay tax on either spirits. That's the benefit Outing that I like. Also add that you have just reviewed because I decided about all I learned a bit of the cycle, but to get that benefit you had to pay tax on the money going in so so in other words, if you have $100,000 in a Roth IRA and maybe it's grown from 50 you made 50 contributions you had to make like 80 or 90 to have 50 left to put into the Iran alliance is there once it's in there I'm not paying tax on the monitor increase on the growth and so I mean that's an exit qualified sure no most money though doesn't sit in Roth IRA since it's in traditional IRAs worth 401(k)'s and most of that is in the never paid taxonomic category but gonna pay tax so just again because I'm trying to disciple here Alaska in a traditional IRA do when I take it out and have to pay the tax on the original income but not on the growth pay tax on both. So now my mind something really cool so the Roth IRA. I don't have to pay tax on the growth but with a traditional IRA have to pay tax on both the original youth on both on both, but not until you take it out right. But if I take it out on the left pay tax and you will take it out either your time or somebody answers some is going take it out so Roth IRA has this other really cool benefit is like you don't pay tax on the growth on her environment.

No knowledge of the wonderful for young people. I do not know that they show a different context, and I'm guessing that a lot of our listeners are just starting to get.

I have incoming client last Saturday afternoon conducting during the week. This is too busy to talk to his wife and then send upstairs. He's a CPA is not acting as a CPA now is run in this big law firm but I explained some things about Roth IRAs. To him that he did know.

In fact he was debating with me a bit and then you know guess of one that is now a client, but so the topic of the show today is really working to show you how you can buy long-term care insurance with your qualified money, which is what most people have an abundance of most people that I work with, even this guy. He's got in the millions of IRA money and he has almost no nonqualified savings for me. That was one of the things I pointed out time is done is great job almost 2 million in his IRA that he's built up but still in a 401(k) and he has almost no savings that he can go grab her money that he conveyed. They don't have to pay tax on withdrawal.

That's not necessarily a very good place to begin because in retirement you know you you all of a sudden would have a need for a substantial amount of money and you're either going to have to withdraw your IRA because it's the only place you have money and if you do that it's gonna miss you taxes and you can have a big spike. I am a yearling surrogate mother yet or you didn't have to take out a loan you know which is not real smart in retirement so just because some subpoints on IRAs, Roth IRAs, nonqualified savings, which is like a brokerage account and so the topic that we can get into in the second part of the show is really talking about since most of my savings is in my 401(k) and in my IRA in something I haven't paid taxes on and I'm interested in buying long-term care insurance and specifically interested in buying this kind of single premium or short number of years premium. I don't want to pay on this for the rest of my life so I want to buy hybrid long-term care, hybrid life, long-term care, and I like to do it with my IRA money and that's really what my client eight years ago. Dr. Bob, that's exactly would take his interest is is that he had an abundance of IRA money and he was having to distribute it because he was 79 years old when came client in heat was very intrigued with the idea so I mean me I can buy long-term care insurance and I can do it with a lump of my IRA money, exactly, but I got some explaining to do, and it took us a while Moss and while a few meetings and in that's exactly what we did and now eight years later it's eight years since he bought this.

I just got the statement I thought you know I want to talk about this on the radio. As I've told the same policy to lots of people but he's the first one that I sold and then I sold myself and I did with IRA money, so to talk about that in general and told more the story right this company my current disciples were learning as NN again.don't miss this.

I love this part of the story. If you if you know Hans, your he loves stories people's like, what's the story behind this person and how to date.

Get 20 where is God in this that those kind of things is just absolutely beautiful and that led to his book complete.cardinal guide to planning for living in retirement, which of course this is brought you by Cardinal don't forget the Cardinal in front a guide when you get to gargle you can email Hans get the entire book. Today's chapter that were talking about. Of the seven worries and we talked about constantly is the IRA, which we now know as qualified money itself. When we come back to find out more on how to essentially call the qualified become IRA money will be right back.

Hans and I would love to take our show on the road to your church, Sunday school, Christian or civic group. Here's a chance for you to advance the kingdom through financial resources and leveraging Hans expertise and qualified charitable contributions veterans aid and attendance IRA Social Security care and long-term care. Just go to Cardinal and contact Tom to schedule a live recording of finishing well at your church, Sunday school or civic group. Contact time that Cardinal that's cardinal welcome back to finishing well, a certified financial planner Hans Island today show calling the qualified IRA investments so you know we get into this, which you know this is it's really really cool to me because were to talk about an annuity which I had no clue what that was two years ago, but so to get into that and really get into this whole concept which is just really cool to be a disciple and learn this custom is in the book. This is Marshall Elizabeth and you can read the whole story, try to give you the quick version of it is is that my brother sold his people.

Make yourself and reduce the premium. He was 79 but paternity. She was from 76 and my brother just got talking to them about the things that I do and being up certified financial planner and CF. It's kind of our business model is identical.

Once people do Medicare and then they talk to them about how we can help with the finances they want my brother to look at is long-term care which is taught up in premium. He had bought it several years before and it helps to shoot cream and so I got on the phone with him and start talking to him and I said well you got some alternatives you could buy this hybrid long-term care insurance and where that is is it's a life insurance policy in a long-term care policy put together and those two things put together you can pay with a single premium. So instead of paying this 1400 bucks a month to Japan for your long-term care we could take some amount of money I think in his case it was $180,000 of IRA money and we can put that to the insurance company and then he paid some other money for the extension riders out of nonqualified money. So I want to get zooming around with a whole bunch of numbers is principally he was able to use his IRA money to buy long-term care insurance and there's one specific company that place had I don't think they think it's expired a patent on this whole process which is unique so I got out to see him. We go through all the steps of and then I also realize that he was troubled by his minimum distributions because he had three different IRA account and actually four different IRA accounts because one of them was his wife's hers was a small amount. He was most troubled with hers because it just seemed like a lot of doing a lot of work. He was asked me about helping with that. I civil sure and help you with those calculations every year. I would be if we just set this all your IRAs on a course where that stuff is just met for you every year for the rest of your life and body was like and that and I said this long-term care IRA long-term care insurance that meets minimum distributions to because are going to distribute a little bit of the time over your lifetime to pay the premiums on the long-term care insurance and so it's to meet minimum distributions sleeves happy with all that bought all the stuff and then in the course of talking to, I learned that he was a Christian or a Christian man. He liked me and suffered from alcoholism and he was recovering alcoholic, which I am and really found God through the and for him. That is been many many years ago for me. Not as many years but is still been a long time from now and so I am one of his big deals was the getting Bibles in the time he was like fixated on that that that that that was that was his calling God. He called doing he gave a lot of money.

Those people and supported them and got others to support and so I ended up telling him after he bought this was I was rusting away from inducements I said I'm going to give part of the commission that I learned from this and I'm to to that Bibles China mission. I should know my health topic I get mail from them constantly because I'm a large contributor them as well and so I learned about that and then I also learned that he had more IRA money and he wanted to do with the minimum distribution thing with all of his IRA money and I went home thinking like, go solve this problem. Lots of ways to do that any gave me slots book and read my book, I become one of the good Socrates. I've been part of that slot now for eight years and I go twice a year in training at slot is America's IRA expert guy took his book, read it over the weekend.

Went back down to see Dr. Bob consulting three more insurance policies that are all designed to give tax-free money at his death in his wife's death to his beneficiaries, as opposed to given them IRA money, which is can be taxed by them but yet still hanging onto the money case they needed for their lifetime. So we were able to solve all that which met even more money for the Bibles China ground and which is great and then you had to meet me about the driveway for him to slip me because he didn't want me discussing all this in front of his wife is she in really like and give away all his money. Well, at least he had a perception that Antiochus is probably right.

It is marriage and site were me down the driveway and he slipped me the address and the name of the place and send the check to them and suddenly had slots bucketing out to get all this done and then about three months after he qualified for the life insurance and all that Dr. Bob passes away.

Just me.

I'm away at a meeting on your work so you know that really this kind of shipping embedded. You know, I really thought about what I learned from him and I know that he's in heaven even talked about going to heaven at some of our luncheons and even just just a great guy and so what I learned from him you were many things about just charity and giving and I learned some about just a man loving his family and loving his children.

I met with his estate planning attorney because his estate planning attorney was telling him that I was wrong about a few things for maybe he was going in there and he could be pretty adamant about what he wanted to. Finally, we had a meeting I was the last meeting before he died. Just think about that about a month before he died.

We we we were in this meeting and we can't clear up all that in his estate attorney got everything set up the way we wanted it the way he wanted and just such a story that I really want to get to everybody here is what he did his he took we were working for a $5000 a month long term care about.

That's what his other policy. On both he and his wife and we were looking for a long benefit.

In fact, we were still able offer lifetime he was concerned that he was can have a stroke or something, or have some kind of condition can then be in a facility or getting home healthcare for like you long time so we we we went to lifetime benefits on this we put inflation in their and they also wanted to take care of entirely his wife's IRA so we actually have the right for policy something wrote to using his IRA money into using hers, so the numbers get a little bit confusing but I just going over these with Robbie and insist it's it's it's great for me to look at something that I sold. He's been dead for almost 8 years and she's living on and Jesus got these wonderful benefits. She may never use them. And if she doesn't, their kids are going to get a substantial amount more out of this thing than ever put in it and they're gonna get, the more tax free is of your life insurance benefit.

She uses some of it but not all of it misunderstood and get more than I mean it's it's it's really a win for everybody involved and did you see this thing performing exactly like her present just in black and white. Eight years later is just fulfilling me personnel about these numbers and this is an annuity and so as we talk before an annuity pays out this kind of annuity pays out a monthly amount and like wow she's getting what is it $5000.

Well actually I got you a little mixed up on that is the reason this is an annuity and life insurance policy side-by-side in. The reason it has to be an annuity is you can't put qualified IRA money into a life insurance policy directly. If you did you have pay taxes on all the money right so nobody was mega hundred $80,000 IRA transfer to to have to pay you know 80,000 in taxes so the whole 180.

This case went into an annuity and then the annuity has guaranteed interest in it pays the life insurance premium for 20 years exactly on the pending and the annuity will be empty in 20 years, but she's not getting that money now that money is just moving from the annuity to the life insurance that we can imagine that it must be a whopper of a life insurance policy.

If the premium is $5000 without the $5000 a month is actually the long-term care benefit. Okay, if you use it right now.

Okay and that $5000 a month is guaranteed for life. So that's the hybrid part of it like it's paying the premium on the life insurance but it's also providing this.

If the if you invest invoke the long-term life insurance benefit is only there if you don't use it for long-term care if you use it for long-term care life insurance benefit. You can only use it, to the extent of $5000 a month. Now that's since been inflated up to about 8000 month is a thing as inflation onto some drawing all these numbers entered in other words, his wife and he while he was alive, have one for long-term care insurance that she is there was ever needed. But if they don't use it or they just use that he's not going using these deceased he died six months after these policies were issued, she might use it.

She's 84 now, she might use it and if she does it'll be there for as she uses it up to its fullest. This can be nothing left for the kids assistance in its Crisco pallets money. So then he's never really glad to add it if she just uses a little better done uses it all then this can be a substantial life insurance payment after she dies.

Which is just refunding all the money they paid into this and more.

So that's the benefit of hybrid long-term care and what were able to do is were able to do this kind of planning and certainly for people younger than them.

It doesn't take $180,000 to cover two people on long-term care and provide life insurance Toshiba 79. She was 76 so it's less expensive than that, but that's a good ballpark number and what they were able to do what he was able to do with this is just make sure that his assets are can all get depleted at the end of either or both of their lives while you can see there's some discipleship.

We all could use in this area as we begin to research more into finishing well again. The underlining thing of this. This is how cool is it when we get to know people start to get to know them get to see God in them and you know I think it's a lot of opportunity for everybody listening really to reach out to Cardinal go there for Thompson's book, the complete cargo guide to planning for living retirement or better yet, just call Hansson sance and we need to meet and hear my story dancing with Dr. in my life and IIB shot the constant learn some from you and I'd be shocked if you had learned some fun. That's awesome that your Philistines thank you.

We hope you enjoyed finishing well brought you by Cardinal visit Cardinal for free downloads of the show previous shows on topics such as Social Security, Medicare, IRAs, long-term care, life insurance and investments and taxes as well as cons best-selling book the complete Cardinal guy to planning for and living in retirement and the workbook once again for dozens of free resources past shows to get Hans book go to Cardinal if you have a question, comment or suggestion for future shows. Click on the finishing well radio show on the website and send us a word. Once again that's Cardinal Cardinal This is the Truth Network

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