Safe Money

Understanding your financial challenges ... first-hand




Services we offer: Our clients are generally nearing retirement, at retirement or several years into retirement. One thing that stands out is that they have made the decision that their current Financial Representative is not listening to their wants, needs and desires about a safer approach to their money and/or they have been burned by the market and wish to learn about opportunities that they know exist, but are not aware of.


We seek opportunities to utilize accounts that offer you protection from market losses. We offer accounts that have indirect market participation but we do not offer accounts that have direct market participation. (we are not affiliated with FINRA)

We also do not charge fees for managing your accounts or for creating your personal strategy. Any accounts we use are either low-fee or no-fee accounts. We are compensated by the companies that we conduct business with, not by you or your money. (D.O.L. rule 84-24 took this approach one step further in 2016 by making how we are compensated a major point of emphasis, we chose to do that years in advance).

Part of that compensation is paid to us with the expectation that we conduct regular reviews of your account(s) and strategy. You will see us on a regular basis for a review of your accounts and strategies. We do this also to make sure that you are correctly positioned for the future when life events take place that were unexpected.


When we talk to you about Safe Money Strategies we are NOT going to consider putting all of your assets into any one vehicle. I We have created a network of referral partners with CFP’s® and FINRA® Registered Specialist’s who offer strategies for our clients who choose market risk as part of their strategy. These partnerships are important so that you can maintain a well-diversified and balanced retirement strategy. The Safe Money Approach should be a part of most retirement strategies. If you do not have this as part of your strategy it may not be too late.


Examples of some of the accounts that we use to protect and grow your money:


Fixed Annuities

Fixed Indexed Annuities

Hybrid Annuities

Index Universal Life Insurance

Universal Life Insurance

POLI (Life Insurance)

COLI (Life Insurance)

Key Person Life Insurance


IRA- Individual Retirement Account:

When a retirement plan from an employer (401k, 403b, 457, TSP) is rolled-over to a non-employer plan it becomes an IRA account known as a Traditional Individual Retirement Account. There are a huge number of different IRA accounts to fill anyone’s specific needs.

IRA accounts often contain additional riders, some of these include:

-guaranteed lifetime riders or living benefit riders

-custodial care benefit riders

-enhanced death benefit riders

-index investing (indirect participation in the stock market)




“When you die the insurance company gets to keep the remaining balance of your annuity account”. This has been the belief of the annuity industry for many years however, THIS IS NOT TRUE.

This only applies to a SPIA with a life only payout. A life only SPIA will allow for the highest income stream based on your life expectancy, but upon death the remainder will go to the insurance carrier. A ‘SPIA’ – Single Premium Immediate Annuity: SPIA’s work much like a traditional pension many people have through their employer


Owning an annuity as part of your investment strategy is the only way to protect your investment while earning interest that is based on the growth of the market.


Annuities: An annuity can offer an effective way to manage your assets for retirement. The earnings offer competitive returns based upon your risk tolerance, and all earnings are tax deferred until you make a withdrawal or begin receiving an annuity income (if you choose). Some annuities offer guarantees related to income options, death benefits and custodial care benefits for homecare, facility care or other custodial care needs.


Fixed: Fixed annuities are essentially CD-like investments issued by insurance companies. Similar to a CD, fixed annuities pay guaranteed rates of interest, in many cases higher than bank CDs. Fixed annuities can be deferred, to receive payouts in the future, or immediate, to begin receiving payments immediately.


Fixed-Indexed: A fixed-indexed annuity is a type of annuity that grows at the greater of a) an annual, guaranteed minimum rate of return; or b) the return from a specified stock market index (such as the S&P 500®, the Russell 2000®, the Dow Real Estate Index®, Gold Index® and Barclay’s Armour II Volatility Control Index®, Morgan Stanley Diversified Select Index®, CROCII® Index to name a few).


Multi-Year Guaranteed Annuity: (MYGA) is an annuity issued with a guaranteed interest rate period which is equal to the length of time that surrender charges last.


SPIA-Single Premium Immediate Annuity: Remember the analogy of a SPIA-similar in structure to a traditional pension. When your strategy includes a SPIA you select an income payment in which you do not maintain control of the principle sum of money. You begin by receiving payments either monthly, quarterly, semi-annually or annually. Here are some of the ways that you can structure your payments if a SPIA is part of your strategy:


Life only annuity payout:

If you select a life-only payout for your SPIA option the company will pay you an income for the remainder of ‘your life only’ and when you die the payments will cease.


Life-annuity with a period certain annuity payout:

If your strategy includes a SPIA payout option the insurance company will make payments to you during your lifetime AND at least for a pre-determined number of years, guaranteed regardless of how long you live. This pre-determined number of years is known as the ‘period certain’ and is usually 10 or 20 years but can be structured for a variety of years if necessary. We work with dozens of insurance carriers to find the solution that is required for your strategy.


*When you add a period of guaranteed payouts such as with the period certain method your income payment will be less than it would if you selected a life-only payout.


Joint and survivor annuity payout:

If this annuity payout is part of your strategy the company pays income as long as either you or your beneficiary are alive. Similar to a traditional pension payout when the annuitant (owner) dies the beneficiary will continue to receive income at a lower monthly amount.



What is the tax treatment of annuities?

Since many people we work with are looking for tax advantages or tax shelters it is important to understand the tax treatment for annuities. Under current federal law, annuities receive tax treatment different than other investment accounts.


Income tax on annuities is deferred, this means you are not taxed on the interest your money earns while it remains in the annuity. Tax-deferred growth/accumulation is not the same as a tax-free accumulation. There are several advantages to tax deferral.


One advantage of tax deferral is that the tax bracket you are in when you begin to withdraw money from your annuity account may be lower than the one you are in during the accumulation period. There are several reasons for that: A) when you retire it is often easier to ‘control’ the amount of income you receive, thus keeping a lower tax bracket. B) conversely, if you are married, filing jointly after you retire you have the opportunity to maximize a tax strategy that perhaps was not an option during your working years (*we do not offer tax advice).  In addition by using the tax deferred annuity strategy you will also be earning interest on the amount you would have paid in taxes during the accumulation period.


Annuities in most states follow the Federal Tax Laws. When you begin receiving payments from an annuity, part of the income you receive will be considered a ‘return of the premium that you paid into it’. You won't have to pay taxes on that part unless the annuity that you have is a Traditional IRA, or ERISA type plan (401k, 403b, etc).


Another part of the payments received from an annuity is considered interest you have earned. You must pay taxes on the part that is considered interest when you withdraw the money. Withdrawals prior to age 59 1/2 may also trigger a 10% tax penalty. (*working with a ‘Safe Money Strategist’ will benefit you) Upon the death of the annuity owner the annuity value is often considered normal income to the beneficiary. Federal Tax Laws have specific rules for how death benefits are calculated with regards to annuities. Your ‘Safe Money Strategist’ can help you better understand how these rules relate to your specific case. In addition for many of our clients there are additional strategies to employ in conjunction with an annuity to improve the tax results for the beneficiary of a larger estate.


1. Does my annuity rider contain a fee?
a. How will this fee be calculated? Will it be a Cash Value Calculation or Income Value Calculation?
b. Is the fee calculated based on the income account value or the accumulation/cash value?

c. When/if my accumulation value reaches $0.00 what happens to my guaranteed income benefit?

d1. When I trigger my monthly income benefit will my benefit base continue to grow?

d2. If I my benefit base has an additional interest rate component to it, when I trigger my monthly income benefit will that additional interest component continue or end?


Another factor to consider is how liquid is your money in case of emergency? Brokerage accounts and mutual funds/ETF’s seem liquid. Can’t you just sell them if you need money? Yes, but what is your penalty if the market is down when you need to liquidate? The penalty for that liquidity need could be very large.


Annuities have what are called CDSC’s: Contingent Deferred Sales Charges. CDSC’s vary by annuity category, timeframe and state. Your ‘Safe Money Strategist’ will disclose the CDSC’s for your annuity and how they effect you.


Having other lump-sum, liquid accounts is vital to your retirement income, long-term. If you find yourself drawing lump-sums from your income accounts you will end up having an income shortage if you live a long life during retirement. It is our opinion that we do not want our clients to retire if they do not have a reliable source of lump sum monies for lump sum needs.


Income riders vary greatly by company and then by product. There are some that offer 5%, 6%, 7%, 8%, 10% and even 14% guaranteed income account growth annually. Some grow interest compounding while others earn simple interest. Some have payout percentages based on age and others are a flat percentage no matter what the age of the contract owner is at time of income payout. Some annuities have cash value fees ranging from .0050% to 2% annually and some do not have any internal fees. The one thing they all have in common is that they all provide a guaranteed lifetime income based on the financial strength of the issuing insurance company. Not all Income riders are the same.


What Is an Income Rider?

An income rider is something in addition to your annuity contract that is either built-in or you can purchase to complement your annuity.  All income riders are different. These income riders are complex tools that are designed to meet SPECIFIC needs based on a client’s; age, income need, need for help paying for nursing home or homecare costs, amount of time until retirement, the need to catch up your savings, single or coupled, other income sources, amount of liquidity and other needs that come up when your income specialist meets with you.


It is a benefit that will issue along with your base annuity contract. If you elect to have this additional rider it will grow at a predetermined rate guaranteed for a specific amount of time to provide a lifetime income in the future. (When in the future you need to draw income; tomorrow or further out will determine what Income Riders and specific annuity accounts are appropriate for you).




Retirement is a time to scale back on as many payments going out as are possible. Life insurance and Long Term Care insurance premiums are often casualties during the future planning process. However it is still vital to have a strategy in place if leaving a legacy or paying for Long Term Care needs is a concern.


Lifetime Income Benefit Riders with certain carriers offer solutions for these areas.They are often called roll-up or step-up death benefit riders. Sometimes built-in to the Lifetime Income Rider and sometimes an add-on for an additional charge you can have a death benefit that grows 3,4,5% per year or more regardless of how the accumulation account performs. Withdraws over time can and will reduce the amount of the death benefit so it is important to have an income specialist illustrate the rider over the long-term.


If Long Term Care needs are a concern in the future several companies have a built-in or add-on rider often called an “Enhanced Withdraw Benefit” or a “Wellness Benefit”. These riders are NOT Long Term Care Insurance and should not be confused as such. Based on the company the additional benefit will be executed typically when the client needs help with 2 or more ADL’s, (activities of daily living). The rider will increase the Guaranteed Lifetime Income Payment by 1.5, 2, 3 or more x’s the normal income benefit to help with paying for these costs.


The benefit increase payment duration is based on each carrier’s contract and will last 3, 4, 5 years or possibly a lifetime. The benefit increase amount will be based on the payout being for a single or a joint life (usually the single or joint-life payout is select at the time you begin receiving income).


The additional benefit payment may also revert back to the original Guaranteed Income Benefit amount while a person is still receiving Long Term Care. This is based on the carrier and their rider and could be due to the accumulation value going to $0.00 or the rider duration ending. However the Guaranteed Income Benefit will still be paid.


It is important to consult with an attorney who specializes is Long Term Care when a family member begins to receive care. Making sure that the Estate is in prepared for the possibility of prolonged care is critical. Laws vary by state and change over time. We do not give Estate Law Advice at any time.


Most clients find that the ‘Enhanced Income Benefit or Wellbeing rider’, combined with their social security and other income sources, ie; pension, will meet or exceed what the cost of Long Term Care is.

There are ways to control the cost of care, a good source of information for this is to read the book “The Parent Care Solution” by Dan Taylor. Another way to is to meet with your extended family and determine what options are available when and if Long Term Care is needed. Evaluate these options and determine if Home Care is an option (possibly greatly reducing costs) or if Facility Care will be the most likely option.


The best way to better understand how todays Homecare works is to contact a trusted Homecare company in your area. A resource to determine the quality of a Homecare company is to contact your local Better Business Bureau.



Life insurance:

Whole life: pays a generally tax-free benefit on the death of the insured, and also accumulates a cash value.


Term life:

Is often the most affordable coverage because it offers protection for a specific number of years. You may want to purchase a term life insurance policy to: Get valuable coverage at an affordable price. Often used to help cover specific financial responsibilities like a mortgage or college expenses.


Universal life:

 (often shortened to UL) is a type of permanent life insurance. Under the terms of the policy, the excess of premium payments above the current cost of insurance is credited to the cash value of the policy or adds to the death benefit amount.


Executive Life Insurance-a permanent life insurance product in which an individual or company pays a premium monthly, quarterly, semi-annually or annually for a set number of years. The death benefit is normally selected to be an amount that will “self-fulfill” the plan in the event of death prior to the owner beginning to draw income at retirement.


The income amount is determined when the policy is constructed and can be lifetime or for a set number of years. A lump sum amount many also be taken from the policy. ALL WITHDRAWALS will reduce the death benefit and withdrawals that do not follow the originally constructed illustration and policy can cause the account to end prematurely. Therefore it may be necessary to have another source of lump-sum monies available during retirement unless that is the purpose of this account.


There are several tax advantages to this type of policy once your begin taking income. Those advantages, if they apply to you will be discussed both during your strategy sessions and with a qualified tax specialist.


Disability insurance:

Often called DI or disability income insurance, or income protection, is a form of insurance that insures the beneficiary's earned income against the risk that a disability creates a barrier for a worker to complete the core functions of their work.


Long Term Care insurance:

(LTC or LTCI), an insurance product sold in the United States, United Kingdom and Canada, helps provide for the cost of long-term care beyond a predetermined period. Long-term care insurance covers care generally not covered by health insurance, Medicare, or Medicaid. Long Term Care insurance has changed dramatically in the past 5 years. The options and costs to provide protection that will optimize your assets has never been better. Consult your ‘Safe Money’ advisor today to learn more.


Planning for the future?

With each and every client we serve, we create a strategy that meets your unique needs. We understand no one benefits from Mohlman Financial being everything to everyone therefore we focus on what we do best and have created Partnerships in areas in which you might still need help. The companies that we directly use when developing a strategy for you are listed below. If we don’t have the solution your strategy requires we work for you to help you find it.




Founded by Jeff Mohlman in 2012, Jeff brings 14 years of industry experience in Safe Retirement Income Planning to the clients that he and his team serve. It was Mohlman's goal .....

Mohlman Financial

4257 Mona Circle

Dayton, Ohio 45440



Mohlman Financial Company Affiliations