Avoid Annuity Tax ProblemsWritten by Tony Novak
Millions of investors own retirement annuity accounts but few are aware of tax implications when annuity is passed to an heir or beneficiary. A little known tax fact is that income tax on an individually owned annuity can be postponed only if account owner’s spouse is named as sole beneficiary. If annuitant is not married, same treatment may be obtained through use of a trust account. Any other designation of account beneficiary will cause proceeds to be immediately taxable in year of account owner’s death. The results can be financially devastating, triggering huge current tax liabilities that would have otherwise
| | Conservative Investment Management Pays for This FirmWritten by Tony Novak
It is genrally not a good idea for an independent financial adviser to endorse specific companies or products by name and this article is not intentionally written as an endorsement. But when another industry magazine printed an article sub-titled “American Skandia’s Stroke of Genius” for viewing by financial professionals only, it seems apparent that outstanding actions of this company deserve further comment in public media.In short, variable annuities are insured stock accounts where a private insurance company guarantees that investors will not lose money. That guarantee can be expensive to insurance companies, especially when stock market perfumes poorly as is has in past few years. Some variable annuity companies are facing significant losses from these guarantees, to point of threatening financial stability
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