Discover The Best Way To Deal With Annuity Taxes

Annuity taxes can and indeed should play a significant role in determining which investment is right for you.

It does have to be stressed, of course, that tax relief is never the most important consideration, because if you make a bad investment and receive no income at all, it will come as absolutely no consolation that you are not paying any tax.

The profitability of the investment vehicle must be the most important consideration. Only when this profitability is guaranteed, or at least highly likely, can you really afford to be worrying about taxation.

Fixed annuities are becoming more popular than ever, as more people seek to protect their wealth and investment against erosion by inflation, and against confiscatory taxation. A bank certificate of deposit, which can be a very effective short term investment, still has the problem of being taxed on annual income.

This unfortunate feature has the effect of dissipating the money which would otherwise have accrued using compound interest. It is for this reason that certificates of deposit are rarely considered as suitable investments for a retirement fund, besides the fact that these days they pay next to nothing in interest.

It does have to be mentioned, though, that fixed annuities can have a sting in the tail in certain situations. If part of your aim is to pass money on to your children or other heirs, you need to think about the impact of the lack of the step up in basis rule. This can mean that a very large percentage of the money you have lovingly built up over the years using as deferred fixed annuity ends up in government hands after all. The money put into a fixed annuity is designed to be used for your retirement, so make sure that that is the primary consideration.

The alternative to this strategy, if you want to find another investment which is more friendly when it comes to avoiding inheritance taxes, is to take out a life insurance annuity or structured settlement payout that someone else is receiving from an insurance company due to an injury or accident claim. This policy operates as closely as possible to the way a fixed annuity would operate. If you know that you will only use a small percentage of your accumulated wealth during your retirement years, and that most of it will go to your heirs or beneficiaries, then this is likely to be the best way for you to go.

In summary, the best way of approaching the problem of annuity taxes depends on your main purpose in creating your savings plan in the first place. If you are intending to use the annuity for its intended purpose, which is to accumulate savings for your retirement, then you will do best by sticking with the tried and trusted system. If, on the other hand, you know that you will be leaving most of the money to your heirs, go for a life assurance solution instead, or possible a combination of both. Take the appropriate advice before you finally decide how to handle annuity taxes.






 

Annuities News:

 

Novation Settlement Solutions' $250000 Pledge Makes a Positive Impact on Storm Victims' Lives - PR Web (press release)

PR Web (press release)

Novation Settlement Solutions' $250000 Pledge Makes a Positive Impact on Storm Victims' Lives
PR Web (press release)
Novation Settlement Solutions, the nation's most respected structured settlement company, is providing continued and direly needed support to hurricane victims through its $250,000 pledge of advances to Florida and Texas residents affected by Hurricane .

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CFPB UDAAP Claim in Structured Settlement Factoring Case Moves Forward - Lexology (registration)

CFPB UDAAP Claim in Structured Settlement Factoring Case Moves Forward
Lexology (registration)
On September 13, the U.S. District Court for the District of Maryland allowed a UDAAP claim brought by the CFPB to move forward in which the defendants allegedly employed abusive practices when purchasing structured settlements from consumers in .

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Magomed Abdusalamov receives $22M injury settlement from New York State - ESPN

ESPN

Magomed Abdusalamov receives $22M injury settlement from New York State
ESPN
The state is to pay $10 million into structured settlement annuities for Abdusalamov, $10 million into an account overseen by his court-appointed property guardian (to handle financial obligations, including legal fees) and $2 million to his wife for .

and more »
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Novation Settlement Solutions Pledges $250000 in Advances to Victims Affected by Hurricane Harvey and Impending . - Benzinga

Novation Settlement Solutions Pledges $250000 in Advances to Victims Affected by Hurricane Harvey and Impending .
Benzinga
Florida-based Novation Settlement Solutions is pledging $250,000 in structured settlement and annuity advances to qualifying applicants affected by either Hurricane Harvey or those in its home state of Florida needing assistance in preparation of .

and more »
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NM's addiction epidemic is out of control - Albuquerque Journal

NM's addiction epidemic is out of control
Albuquerque Journal
Through structured settlements, money realized as a result of targeted litigation can be directed back into the communities that have suffered most. Manufacturers and distributors that sell pills in New Mexico should invest in safety-net services for .

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Comparing SLM Corporation (NASDAQ:SLM) & JG Wentworth (JGW) - The Ledger Gazette

BZ Weekly

Comparing SLM Corporation (NASDAQ:SLM) & JG Wentworth (JGW)
The Ledger Gazette
The Company conducts its operations through two segments: Structured Settlements and Annuity Purchasing (Structured Settlements), and Home Lending. The Structured Settlements segment provides liquidity to individuals with various financial assets, such .
Slm Corporation - SLM - Stock Price Today - ZacksZacks Investment Research

all 23 news articles »
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Analyzing JG Wentworth (JGW) and SLM Corporation (SLM) - The Ledger Gazette

Analyzing JG Wentworth (JGW) and SLM Corporation (SLM)
The Ledger Gazette
The Company conducts its operations through two segments: Structured Settlements and Annuity Purchasing (Structured Settlements), and Home Lending. The Structured Settlements segment provides liquidity to individuals with various financial assets, such .

and more »
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Social Security Offsets in the Proposed US Budget - WorkersCompensation.com (press release)

Social Security Offsets in the Proposed US Budget
WorkersCompensation.com (press release)
Arcadia is the first structured settlement firm in the world with over 45 years in business providing security and closure. You can find us nearby, with more than 160 experienced settlement professionals including bilingual professionals across the .

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