What will we be covering in this review?

In this review, we will be discussing the RIC-E, Retirement Income for Everyone Trust, from Edelman Financial. More specifically, we will provide information on:

  • Type of productIndependent Review of the RIC-E Trust (Ric Edelman)
  • Fees
  • Realistic long-term expectations
  • How the product is used
  • How it might be poorly used (in other words, who should ideally stay away from this product, as it may not fit in well with short- and/or long-term goals)

Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.

Today, as the Baby Boomer generation makes it way towards retirement, it is estimated that roughly 10,000 people turn age 65 each and every day. This large wave of people has already started to put a tremendous strain on programs like Medicare and Social Security – which can lead to additional concerns, such as ensuring that income from savings and/or other sources continues to flow in for as long as it is needed.

Years ago, when most people only lived for a few years after retiring, the money that was received from pensions, Social Security, and personal funds was typically more than enough to live comfortably. Now, however, it isn’t uncommon for people to live for 20, 30, or more years after saying goodbye to their employer (and their steady paycheck).

If you’ve been searching for a way to make sure that you – and future generations – are taken care of financially down the road, then you may have considered the RIC-E Trust. A product of the long-time financial guru Ric Edelman offers a way for parents, grandparents, and others to help a child they love enjoy a more financially secure retirement.

The idea with this financial vehicle is to let you set aside money that grown without taxation until the child reaches his or her own retirement age. And, this money grows outside of your – the donor’s – estate.

But while the RIC-E Trust may sound like it has some nice benefits, it’s important that you get a full understanding of how it works, along with both the benefits and the drawbacks, as making a commitment to this product could be somewhat difficult to get out of once you have gotten in.

Retirement Income Planning Information You Can Trust

If this is the first time that you have visited our website, please allow us to personally welcome you here to Annuity Gator. We make up a team of financial professionals who are focused on offering you the most comprehensive, and non-biased, retirement income product reviews.

We have been doing this for many years now – and because of that, we have also become a highly trusted source of financial and retirement income information online. We feel that it is important to know the good, as well as the bad and the ugly before you put your hard earned money into any financial product.

With that in mind, if you have arrived here in search of more details regarding the RIC-E Trust, you are certainly in the right place. In fact, we dare say that our website is the only place where you will be able to get all of the nitty-gritty details that you need for making a well-informed decision.

That being said, this product review is here to help you with getting a much better understanding of the RIC-E Trust from Edelman Financial. So, if you are ready to get started, let’s go ahead and dive in!

The Edelman Financial RIC-E Trust at a Glance

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Opening Thoughts on the RIC-E Trust from Edelman Financial Services

Edelman Financial Services is a national, independent firm of financial advisors. The company currently manages more than $21.7 billion in assets for more than 36,000 families across the U.S.

Founded more than 30 years ago by industry leader Ric Edelman, the company has a key focus on making personal finance more simple, as well as more fun. The company’s personalized financial plans take every aspect into a client’s life into account, including savings and investments, career and income, family situation, taxes, insurance, estate planning, and even home ownership.

Edelman Financial Services manages clients’ investments through an asset management program that makes it easy for clients to diversify across multiple asset classes. Pioneered by Ric Edelman, the Edelman Managed Asset Program, or EMAP, uses a variety of approaches to help clients in meeting their goals.

But, while all of this might sound fine and good, it is still absolutely essential that you take an extra step in order to make sure that any product will fit in with your specific goals and needs. In the case of the RIC-E Trust, even though there is an opportunity for growth and tax savings, there is also a fair amount of risk that may be taken on. This review can help you to determine whether or not the risk is worth the potential rewards.

Before we get into the gritty details, here are some legal disclosures…

This is an independent product review, not a recommendation to buy or sell an annuity. Edelman Financial Services has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This review is meant to be an independent review at the request of readers so that they may see our perspective when breaking down the positives and negatives of this particular financial product. Prior to purchasing any type of investment or insurance product, it is important that you do your own due diligence and that you consult a properly licensed professional if you should have any specific questions that relate to your individual circumstances. All names, marks, and materials that were used for this review are the property of their respective owners.

How Edelman Financial Describes the RIC-E Trust Product

Edelman Financial Services describes the RIC-E (Retirement InCome for Everyone) Trust as being a “gift towards a child’s retirement.” The way that this works is that you contribute to the trust, and then designate a child or grandchild to receive the money when he or she reaches retirement age. This money can grow inside of the fund on a tax-deferred basis, meaning that there is no tax due on the gain until the time of withdrawal in the future. This, in turn, allows the money to compound faster than if it was in a taxable account.

When you take a closer look at the Edelman Financial Services website, though, you’ll find that the RIC-E Trust is really just a fancy name for a variable annuity – in particular, the Polaris Platinum III variable annuity.

A variable annuity can be purchased either with one lump sum payment or via a series of multiple payments over time. These types of annuities allow you to choose underlying investment vehicles from a variety of “sub-accounts” that invest in stocks, bonds, money market accounts, or a combination of these.

The issue with a variable annuity is that, while the money inside of the account can grow tax-deferred, the value of the sub-accounts will fluctuate with the performance of the underlying investments – and, given our roller coaster stock market of late, this can definitely present a risk of loss to principal.

In addition, variable annuities can be riddled with fees (which are discussed in more detail below). And, if this product is being purchased for the benefit of a child who won’t be using the money for many years, that’s a lot of annual fees that can be generated for the financial firm that offers this product!

There are some other bells and whistles that can be found on the RIC-E Trust. These include a guaranteed death benefit, which states that if the child/annuitant dies, his or her estate will receive the greater of 1) the value of the annuity account or 2) the amount that was invested, minus any withdrawals.

For all of the in-depth details about the RIC-E Trust, you can take a look at the full product brochure HERE.

To check out the prospectus for the Polaris Platinum III variable annuity – which is the primary investment inside of the RIC-E Trust – go HERE.

How an Insurance or Financial Advisor Might “Pitch” this Product

Ric Edelman is the author of numerous books about financial planning. His firm, based in Fairfax, Virginia, also does a great deal of advertising on a national basis. So, it is likely that you’ve at least heard amount him somewhere along the line.

If you’ve been presented the RIC-E Trust by your current advisor, they may have honed in on the opportunity to earn market-linked returns, along with the tax-deferred nature of the investment.

But, because the money in the RIC-E Trust is exposed to market fluctuations, there is risk involved – and not just risk that the funds may not keep pace with inflation, but that you could end up losing principal.

In addition to that, in reality, variable annuities are not necessarily known for being the best alternative for generating lifetime income. While you can obtain a stream of income for life, oftentimes, due to the risk to the insurance company involved, these products end up only generating the same amount of income – or less – than safer options such as fixed annuities.

That being the case, would you really want to endure sleepless nights wondering what the market is going to do, and worrying that your hard-earned principal could be lost before you retire?

Variable annuities can be confusing. Because of that, it is important that you know what you’re getting into, and you know what questions you should ask before moving forward. With that in mind, if you would like some additional tips on what you need to know before buying an annuity, just simply so that you can immediately access our free report on how to shop for an annuity.

What About the Fees Associated with the RIC-E Trust?

As mentioned earlier, variable annuities can be riddled with charges and fees – and not just one time at purchase, but also throughout the entire time you own the investment. In this case, while there is no annual contract fee (Polaris normally charges a contract fee of $50, but this is waived for owners of the RIC-E Trust), you will find that there is an up-front sales charge of 1% of your investment that goes to your sales advisor. There is also a .25% quarterly fee – based on the value of the investment – beginning in month 15. This, too, is paid out to your advisor from the invested assets.

In addition, an insurance separate expense of 1.55% that is taken out of the account on an annual basis. This fee goes towards covering the insurance benefits associated with the annuity. Then, there is the sub-account expense. This will vary between .72% and 1.48%, depending on the investments that you’re holding in the annuity’s sub-accounts.

You’ll also want to be mindful of the surrender charge period. These withdrawal fees, officially referred to as a Contingent Deferred Sales Charge, go on for 7 full years. These start at 8% in Year 1, and they grade down as follows:

Product NameStructured Capital Strategies Annuity with 5 Year Segment
Type of ProductVariable Annuity
S&P RatingAA-
Phone Number(877) 899-3743

These surrender fees will be incurred if you withdraw more than 10% of the contract’s value during the surrender period. In addition, if you make such a withdrawal before you turn age 59 1/2, you may also be hit with a 10% early withdrawal penalty from the IRS.

The Annuity Gator’s End Take on the RIC-E Trust from Edelman Financial Services

Where this product works the best:

  • For those who are looking for market-related growth
  • For those who want the benefits of tax-deferred growth
  • For those who are seeking a way to diversify their assets

Where this annuity works the worst:

  • For those who have a low-risk tolerance
  • For those who are seeking a guaranteed amount of lifetime income in the future

In Summary

If you’ve been teetering on the brink of purchasing a variable annuity like the RIC-E Trust – or any annuity, for that matter – but you’ve been hesitant to move forward because you just aren’t sure whether or not it is right for you, it is important that you know all of the ins and the outs of a particular product before you sign on the dotted line.

This is because an annuity should always be considered as a long-term financial commitment – and if you do end up determining that a particular annuity just isn’t for you after you’ve purchased it, it could be fairly expensive to get out of it.

If you are still leaning towards the RIC-E Trust, there are some nice benefits that can be had. However, this particular product may also fall somewhat short – particular if you are seeking the safety of your principal.

So, if you still have any questions as to whether or not this product would fit into your overall financial plans, then please feel free to reach out to us directly via our online contact form here and our annuity team will be happy to assist you.

Need Additional Info? Did You See Any Mistakes?

We realize that this review of the RIC-E Trust was a bit lengthy – and for that, we thank you for sticking with us through to the end here. But we would much rather provide too much detail than not enough. So, if you felt that this product review was helpful, then please feel free to forward it on to anyone else that you think may benefit from it, too.

Also, as humans will often do, we also understand that information about financial and investment vehicles can change quickly. Therefore, if you happened to notice any details in this review that were out of date or that need correction, please let us know that as well, and we will get it fixed quickly.

Are there any other annuities or annuity related financial products that you would like to also see reviewed?

If you have checked out our list of annuity reviews and there is a product that is not currently in our annuity review database, but that you would like to see reviewed, please let us know the name of it, and our team of “geeks” will get right on it. So, be sure to check back with us soon to see any updates.


The Annuity Gator

Independent Review of the RIC-E Trust (Ric Edelman)