412i Plans

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Jun 13, 2005 2:49 pm

Anyone do much with 412i plans?   I am interested on what your thoughts are.  In my case, I have a client with a yearly income of around 450k.  Getting creamed on taxes.  He lives on only around $60,000 so he banks the rest or invests it with me giving him the ability to put a large amount away into a 412i.  This is a defined benefit plan that factors in a growth rate of only 3%.  Therefore it allows for very large contributions particularly for older clients like mine.  


Pros-cons?  Thanks       

Jun 13, 2005 11:12 pm

Make sure you get fitted for the appropriate colored sportcoat. And you must repeat after me, "Phil, is that you?"...


Ground hog day in case you are wondering. An insurance salespersons dream. And the commission.....Oooooh.


By the way. The 412I for the right situation, can be a useful retirement plan, but it must be funded for at least five years. So if your client's income has a possibility of varying, then it might be the end of your career. A chargeback of the highest magnitude....


But I am sure you can find a vendor that will tell you the latest and greatest. My suggestion is to google springing cash values and abusive tax shelters. Then find a CPA that will listen, because you are going to need one.

Jun 13, 2005 11:40 pm

Malcolm,


You'll get no intelligent answers on this board. This group is comprised of refugees who couldn't make the final cut of "Boiler Room". They are a bunch of script kiddies who hawk stocks and bonds under the guise of financial planning.


If a topic has anything to do with insurance, they $#!+ their pants and bleat how it must be a bad thing and that brokerage is the only solution to the problem.


Better to go to the boards on www.financial-planning.com for a real answer. They're mainly fee-heads, but they'll be surprisingly objective. Hell, www.f**kedcompany.com would be a more credible source than this glorified jones-bash of a board.

Jun 14, 2005 12:58 am
PantsGoBrown:

Malcolm,


You'll get no intelligent answers on this board. This group is
comprised of refugees who couldn't make the final cut of "Boiler Room".
They are a bunch of script kiddies who hawk stocks and bonds under the
guise of financial planning.


If a topic has anything to do with insurance, they $#!+
their pants and bleat how it must be a bad thing and that brokerage is
the only solution to the problem.


Better to go to the boards on www.financial-planning.com for a real answer. They're mainly fee-heads, but they'll be surprisingly objective. Hell, www.f**kedcompany.com would be a more credible source than this glorified jones-bash of a board.

Jun 14, 2005 1:45 am
PantsGoBrown:

Malcolm,


You'll get no intelligent answers on this board. This group is comprised of refugees who couldn't make the final cut of "Boiler Room". They are a bunch of script kiddies who hawk stocks and bonds under the guise of financial planning.


If a topic has anything to do with insurance, they $#!+ their pants and bleat how it must be a bad thing and that brokerage is the only solution to the problem.


Better to go to the boards on www.financial-planning.com for a real answer. They're mainly fee-heads, but they'll be surprisingly objective. Hell, www.f**kedcompany.com would be a more credible source than this glorified jones-bash of a board.

Jun 14, 2005 8:57 am

Mr. Dirty Pants-


Insurance products are made to make money. Mostly for the broker and the insurer. That will never change.


Any plan that allows the employer extraordinary deductions, far beyond the norm, is ripe for scrutiny by the IRS. Imagine a professional deducting 300K from income and five years later buying out the plan at 50% value, then converting to a variable , and ulitmately taking out principle first and then loans later (do you see any tax benefits here?)..Check out abusive tax shelters (ask a CPA) and you will see that 412 and 419 plans are newsworthy. 


So, Mr. Dirty-Pants...not bad knowledge for an IR.


PS. Reared in the insurance industry in the early 90's.

Jun 14, 2005 9:41 am
PantsGoBrown:

Malcolm,


You'll get no intelligent answers on this board. This group is comprised of refugees who couldn't make the final cut of "Boiler Room". They are a bunch of script kiddies who hawk stocks and bonds under the guise of financial planning.


If a topic has anything to do with insurance, they $#!+ their pants and bleat how it must be a bad thing and that brokerage is the only solution to the problem.




I still chuckle when I hear some blowhard in a loud sport coat who sells across a kitchen table say "personal retirement account"....

Jun 14, 2005 9:56 am

http://www.irs.gov/newsroom/article/0,,id=120409,00.html



Jun 14, 2005 10:34 am

Good info, thank you.


By the way 7yr vet.  I wouldn't exactly say that being in this business 7 years makes you a "vet" unless you work at a firm where the average tenure is about 2.5 years.  Never-the-less, I appreciate your input. 

Jun 15, 2005 1:32 am
stanwbrown:

http://www.irs.gov/newsroom/article/0,,id=120409,00.html



Jun 15, 2005 1:33 am
Malcolm:

Good info, thank you.


By the way 7yr vet.  I wouldn't exactly say that being in this business 7 years makes you a "vet" unless you work at a firm where the average tenure is about 2.5 years.  Never-the-less, I appreciate your input. 

Jun 15, 2005 1:59 pm

At Jones, anyone with 4 yrs under their belt IS considered a vet.

Jun 15, 2005 8:51 pm

I know Merrill uses these plan quite a bit, the tickets are big, there are several rulings that allow for these plans, I am sure the insurance provider can get you up to speed, but my understanding is they are good to go... good luck.

Jun 15, 2005 10:16 pm
7yrvet:

Mr. Dirty Pants-


Insurance products are made to make money. Mostly for the broker and the insurer. That will never change.


Any plan that allows the employer extraordinary deductions, far beyond the norm, is ripe for scrutiny by the IRS. Imagine a professional deducting 300K from income and five years later buying out the plan at 50% value, then converting to a variable , and ulitmately taking out principle first and then loans later (do you see any tax benefits here?)..Check out abusive tax shelters (ask a CPA) and you will see that 412 and 419 plans are newsworthy. 


So, Mr. Dirty-Pants...not bad knowledge for an IR.


PS. Reared in the insurance industry in the early 90's.




Translation: I can not offer anything outside of brokerage products. Therefore all nonbrokerage products are BAAAAAAAAAAAD.



You sheeple never cease to amaze me.


Even Stan's lame post admitted that most 412i plans are legit.


If you can't offer both insurance AND brokerage, WAYSA?

Jun 15, 2005 10:22 pm

I looked at 412i plans a couple of years ago.  Dentists, for example, are a natural target market.  I backed away from the idea not because they are bad, but rather the more research I did the more clear it became that the IRS wanted to make them go away.  I just had this awful vision of the IRS regulating them out of existence in a few years, and suddenly having a cadre of irate dentists telling the horror story around town.  And we all know the bad guy wouldn't be the IRS.

Jun 15, 2005 11:28 pm
PantsGoBrown:
7yrvet:

Mr. Dirty Pants-


Insurance products are made to make money. Mostly for the broker and the insurer. That will never change.


Any plan that allows the employer extraordinary deductions, far beyond the norm, is ripe for scrutiny by the IRS. Imagine a professional deducting 300K from income and five years later buying out the plan at 50% value, then converting to a variable , and ulitmately taking out principle first and then loans later (do you see any tax benefits here?)..Check out abusive tax shelters (ask a CPA) and you will see that 412 and 419 plans are newsworthy. 


So, Mr. Dirty-Pants...not bad knowledge for an IR.


PS. Reared in the insurance industry in the early 90's.




Translation: I can not offer anything outside of brokerage products. Therefore all nonbrokerage products are BAAAAAAAAAAAD.



You sheeple never cease to amaze me.


Even Stan's lame post admitted that most 412i plans are legit.



"Lame"? The IRS is an agency you might want to listen to. And while they did say most were legit, they made it clear they were targeting the ones with the biggest bang for the buck.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


Say, just where do you get those jackets, anyway? And are hair plugs required, or just desirable?


Jun 16, 2005 2:42 pm

Stan-


Don't forget the gel...dude....Just for the record, I may have a situation in the near future where 412 might fit.


No qualms from the firm everyone hates on these forums, as long as the pro's sign off.