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Annuity Taxes

Four Reasons to Own an Annuity

John Conley

John Conley | October 6, 2017 | , , , , ,

Now that the Powerball winner has come forward to claim her prize of $758 million (before taxes), you can’t turn on the television or radio without hearing the word “annuity.” The winner of the lottery had a very important choice to make: to take an after-tax lump sum or pay the taxes and receive income for life. This got me thinking about the number of people who don’t understand exactly what an annuity is and how it can be beneficial when used in the following...

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How Is My Annuity Taxed?

Richard Ericson

Richard Ericson | September 4, 2014 |

How annuities are taxed can be dependent on the types of funds you use to invest in the annuity. When you invest with qualified funds, withdrawals are taxed as ordinary income. When you invest in an annuity contract with non-qualified funds, withdrawals are taxed as ordinary income until you get to the principal, which has already been taxed. When you use tax-free or Roth investments to fund your annuity contract, withdrawals maintain their tax-free status. Qualified – The first and most common option is utilizing...

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Taxation of Annuities Explained

Jason Soloman

Jason Soloman | February 18, 2014 | ,

Are you considering investing Non-Qualified (non-IRA) money in the Total Value Annuity, American Equity Bonus Gold, Allianz Core Income Benefit, Athene Choice 10, Security Benefit’s Secure Income Annuity, or any other deferred annuity?  It may be a good investment for the savings and income portion of your money, but then again it may not.  This article is intended to provide you with tax information that will help you make more informed decisions when deciding which investments will work best for you near or in retirement....

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Fixed Index Annuities – Compounding Tax Deferral Explained

Anton Hendler

Anton Hendler | February 14, 2014 | ,

One of the features of a Fixed Index Annuity (FIA) is that it grows tax deferred on a compounding basis. Essentially what this means is that your interest earned every year is not taxed but is left in the annuity to continue to grow each year and is only taxed when taken as income at some point in the future. This can be more significant than one would, at first, imagine. Let us take a simple example to illustrate the point. Let us assume that...

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Will I Pay Taxes If I Exchange My Annuity For A Better One?

James D. Kersey

James D. Kersey | December 19, 2013 | , , ,

In my 33 year career, my clients have always been inquisitive of the tax consequences of moving money from one account to another. As we review current and prospective clients’ annuity contracts and they come to realize that there may be a better solution, they all seem to want to know the answer to that all important question of “Will I pay taxes if I exchange my annuity for a better one?” My answer is always the same: “No!”  Even though the IRS always seems...

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Before You Let Your Deferred Annuity Be Owned By or Payable to a Trust…Read This

John L. Olsen

John L. Olsen | October 25, 2013 | , , , ,

If you own, or are considering buying, a deferred annuity and are thinking of having a trust own or be the beneficiary of that annuity, you need to be aware of the tax consequences. In this article, we’ll examine those consequences. But before we start, we need to be clear on two things: First, the author is not an attorney and is not giving you tax or legal advice. You should consult your legal advisor for that. Second, the tax treatment describe here applies only...

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How Do You Know If An Annuity Is “Suitable” For You?

John L. Olsen

John L. Olsen | October 1, 2013 | , , , , , , , , , ,

If you are considering the purchase of some kind of annuity, you know what you want and need. But how can you determine whether the annuity product being recommended to you will meet your needs better than a different kind of annuity or some non-annuity alternative (such as a CD or mutual fund)? And how did the insurance agent showing you the annuity decide that the product he’s showing you is the one most suitable for you? The answer to both questions lies in that...

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Is An Annuity Considered Life Insurance?

Stan The Annuity Man

Stan The Annuity Man | September 12, 2013 | , , , ,

Question: Is an annuity considered life insurance?  Do they work the same? from Ted in Miami, FL Answer: Most people don’t know this, Ted, but annuities are actually issued from life insurance companies….so in essence they are life insurance products.  However, annuities and life insurance are vastly different when it comes to how they are taxed. As a side note, when it comes to anything involving taxes, you should always consult with a qualified CPA or tax lawyer.  Annuity agents are not tax advisors, and...

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How Are Annuities Taxed?

Stan The Annuity Man

Stan The Annuity Man | August 8, 2013 | , , , ,

Question: How are annuities taxed? from Darrell in Phoenix, AZ Answer: That’s a pretty broad question Darrell, but and extremely important one.  Let me get right to the point when it comes to annuities and taxes.  Always use a CPA or qualified tax professional for any type of tax questions that are related to annuities.  Never take an agent’s word for it.  I probably know more about annuities and taxes than most (heck, I’m Stan The Annuity Man!), but even I defer all questions to...

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Best 10 Reasons to Own Annuities

Stan The Annuity Man

Stan The Annuity Man | July 19, 2013 | , , , ,

Written By: Jeffrey Kiesel in Chester Springs, PA As Baby Boomers look ahead to a retirement with life expectancies which could be the longest part of their lives, they need to have an adequate, dependable and long lasting stream of income. This means their nest eggs should provide the funds to allow them to enjoy their retirement years and to not outlive the source of their income. For this reason retirement planning is extremely important. Besides being a complicated and somewhat threatening process, it is...

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