Retirement Annuities will shelter you against such draconian tax laws.
Thank goodness for Annuities. The Biden Administration is considering bringing back an old tax law that will tax unrealized gains in your investments. This means money gained through a 401(k) or personal IRA will see a tax bill for the interest earned. A tax bill, despite the fact you don’t have that money in your bank account.
If passed, this law cripples the economy even more by forcing people to pay additional taxes on investment gains they’ve not drawn on. Imagine your $500,000 IRA having a 10% gain, which is about $50,000. Then you pay taxes on that gain, even though the funds have to remain in your IRA until age 59.5 . Where’s the money to pay the tax coming from?
The government gave away too much free money during COVID and now the proverbial chickens have come home to roost. Meaning; the bill is due and current tax revenues cannot offset the Federal budget.
Add insult to injury by combining the volatility of current markets and inflation with this possible new tax law. It’s a real mess with your retirement savings. It’s time to move those funds into the “safe bucket” of investing with a Retirement Annuity. How will this help:
Retirement Annuities are not included
Retirement Annuities are not on the target list of products to be taxed for unrealized gains. Annuities are a bit of a sacred cow being technically classified as a type of life insurance product.
Principal is guaranteed against loss
Fixed and Fixed Index Annuity principal is guaranteed against market losses and the returns are never less than 0%. When the account value resets each year, the new number is the new principal. If the S&P 500 takes a dive and goes negative, your annuity will not go negative with the market. It stops at a 0% return.
Taxes are deferred
Retirement annuities are taxed on a deferred basis for gains. Your gains are the last funds out and not the first. Combined with the fact that there are no unrealized gains, and you have a perfect product.
Income is guaranteed for life
When an annuity is set up for income generation (annuitized), that income is paid for life, even beyond the account value’s depletion. You cannot outlive the income from an annuity, but you can outlive the income from an IRA.
Reach out to the Annuity Master and take the free annuity assessment to learn if now is a good to consider an annuity as part of your retirement strategy. Once you complete the assessment, you can connect with an annuity professional to review your score and options.