RPU would bring the death benefit down to about the current cash value. You would continue earning dividends. That usually winds up around 4% for NWM.I had asked Fidelity about the variable annuity and they told me the basis does not carry over with the exchange. I was inclined to take the cash, pay off any credit cards, and invest the rest between my kids 529, taxable account and fund IRA this year and next year.
My only reason to consider the reduced paid up would be to preserve some death benefit to pass on to my kids but I believe that reduced paid up will be less than 200k. Feel like doing that might be more of an emotional decision more than anything because the goal is to be self insured and convert pretax to Roth in the early years after I stop working.
You can definitely roll it into an annuity. It's a 1035 exchange. Fidelity is the least expensive option here.
You'd be able to let it earn back up to $49k, then surrender it with no tax due. Depending on your tax bracket, that's about $2k in savings.
If you value simplicity, take the cash and run.
Statistics: Posted by exodusNH — Tue Apr 09, 2024 4:47 pm — Replies 4 — Views 192
