Annuities

Addressing Consumer’s Objections to Annuities

19th Sep, 2017

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Addressing Consumer’s Objections to Annuities

From: www.wealthmanagement.com

Annuities, according to author and retirement income expert Tom Hegna, aren’t bad, but, he cautions, “there are bad annuities.” In this video clip from The American College New York Life Center for Retirement Income, Hegna speaks with Professor Dave Littell about common consumer objections to annuities and what advisors can do to reframe the conversation with clients about this important tool as part of an…

Kitces: When and how to deduct long-term care insurance

28th Jul, 2017

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Kitces: When and how to deduct long-term care insurance

From: www.financial-planning.com

With the 1996 introduction of tax-qualified long-term care insurance under the Health Insurance Portability and Accountability Act and IRC Section 7702B, Congress affirmed that long-term care insurance benefits should be tax-free. Tax benefits for purchased long-term care insurance coverage followed.

However, the evolving landscape of both individual tax deductions and long-term care insurance tax preferences have created myriad options for filers, all…

Real-World Index Annuity Returns

16th May, 2017

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Real-World Index Annuity Returns

From: Financial Planning Association

  • This paper offers the first empirical exploration of fixed index annuity (FIA) returns based on actual contracts that were sold and actual interest that was credited.
  • FIAs are designed to have limited downside returns assocated with declining markets, and achieve respectable returns in more robust equity markets.
  • Studies that have criticized FIAs are usually based on hypothesized crediting rate formulae, constant participation rates and caps,…

Retirement Basics: Fixed Index Annuities

12th Apr, 2017

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Retirement Basics: Fixed Index Annuities

From: REAP, LLC.

How a Fixed Index Annuity could strengthen and protect your overall retirement plan.

When it comes to your retirement, a steady stream of income could make a difference in your later years. With a fixed index annuity, a portion of your retirement savings is protected from risk until it’s needed. What is a fixed index annuity? A fixed index annuity allows you to protect a portion…

IRS Denies IRC Section 1035 Tax Deferral in Annuity Exchange

6th Jul, 2016

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IRS Denies IRC Section 1035 Tax Deferral in Annuity Exchange

From: wealthmanagement.com

Taxpayer’s receipt of outright cash from original insurance company barred non-recognition

A taxpayer inherited an interest in an annuity from his late father. The taxpayer wished to exchange his interest in the inherited annuity for an annuity sold by a different insurance company. With the intent of qualifying the transaction as a permissible tax-free exchange, he mistakenly requested a “Lump Sum…

Real World Index Annuity Returns

12th Apr, 2016

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Real World Index Annuity Returns

From: Wharton Financial Institutions Center

Financial advisors and financial planners have sought various programs to provide clients protection from systematic risk, also known as market risk. Various asset allocation strategies have been used with limited success when extreme market movements and “black swans” occur (Taleb, 2007). It has been known for close to 50 years that equity market returns do not conform to a Guassian, or Normal…

The Problem With Naming A Trust As The Beneficiary Of An Annuity

15th Feb, 2016

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The Problem With Naming A Trust As The Beneficiary Of An Annuity, And Using A Beneficiary Designation With Restricted Payout Form As An Alternative

From: kitces.com

Retirement accounts and annuities used as accumulation vehicles can create significant tax-deferred account balances over time, with the caveat that eventually the tax bill must still come due. If the accounts are liquidated during life, the account owner faces the tax consequences; if the accounts are…