By Hans Goldstein, Founder, Retirement Literacy Foundation. He is also a licensed California insurance producer (#4273294). Education, not a product recommendation.Published
The Retirement Literacy Foundation publishes short, sourced research on the retirement money questions that rarely get a straight answer: how products are paid, how they are taxed, what the fine print really pays and who actually gets coordinated advice. Every page has a dated methodology, a sources list, a downloadable data file and a "cite this" box. Journalists, educators and readers may quote and chart the findings with a link.
Annuity commissions
Published industry averages put agent commission at 2.29% of premium on MYGAs, 4.18% on fixed and 6.26% on indexed annuities. What that means and what to ask.
In the most recent published industry averages we found (Wink, first quarter 2018), the agent commission on an indexed annuity averaged 6.26% of premium, 2.7 times the 2.29% on a multi-year guaranteed annuity. On a $250,000 deposit that is about $15,650 versus $5,725.
"Up to" living benefits
Insurer examples show discount-method living benefit riders paid 92% for a terminal illness but 54% after a heart attack and about 30% for chronic illness.
In one insurer’s own brochure examples, a discount-method rider paid 92% of the amount accelerated for a terminal illness with 8 months to live, 54% after a heart attack with a 10-year life expectancy, and about 30% for a chronic illness at 45.
Non-qualified annuity tax trap
$100k of after-tax money grown to $200k: a deferred annuity owes $24,000 federal tax at 24% vs $15,000 for a brokerage account, and heirs get no step-up.
When $100,000 of after-tax savings grows to $200,000, cashing out a deferred annuity owes $24,000 of federal tax in the 24% bracket, versus $15,000 for a taxable brokerage account at the 15% capital gains rate. At death the gap widens: the annuity heir owes ordinary income tax on the full $100,000 gain, while the brokerage heir gets a step-up in basis and owes nothing on it.
Sequence-of-returns risk
In 2022 stocks fell 18% and Treasuries 17.8%, the only year since 1928 both lost over 10%. Why the order of returns decides retirement outcomes.
2022 was the first year since at least 1928 in which both the S&P 500 (minus 18.0%) and 10-year Treasuries (minus 17.8%) lost more than 10%. A $1,000,000 60/40 IRA fell to about $840,000, cutting a 75-year-old’s 2023 required distribution from $40,650 to $34,146.
Cash value takes time
A transparent 2017 CSO model shows cash value flat for years, then bending up after 10 to 15 years, and why buying for cash value at 65 rarely works.
In a transparent model on the 2017 CSO mortality table, a well-funded policy bought at 35 reached its premiums paid in year 6 on a steady 6% credit and never did on the guaranteed basis. Meanwhile, published lapse data show 57% of permanent policyholders lapse within 10 years, before most of the curve.
The retirement advice gap
Account minimums run from $5,000 for robo-advice to $10M for private wealth. Why households with $300K to $8M get products instead of coordinated planning.
Published minimums jump from $5,000 at a large robo-advisor to $500,000 for a personal advisor program and $10 million in investable assets for one firm’s private wealth tier. Meanwhile a 1% annual fee on $1,000,000 costs about $10,000 a year and, at a 6% gross return, about $1.42 million (25% of the ending balance) over 30 years.
2026 retirement tax numbers
2026 brackets, capital gains thresholds, the $6,000 senior deduction, 401(k) and IRA limits, Social Security COLA and RMD age in one sourced table.
For 2026, a married couple who are both 65 or older can deduct up to $47,500 before any income is taxed: the $32,200 standard deduction, $1,650 each in additional deductions and the new $6,000 senior deduction each, which phases out above $150,000 of modified adjusted gross income.
About this research
Written by Hans Goldstein, founder of the Retirement Literacy Foundation, a 501(c)(3) public charity. He is also a licensed California insurance producer (#4273294). Education, not a product recommendation. Nothing is sold on these pages. Numbers are checked against primary or published sources on the date shown; hypothetical examples are labeled as such.
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