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Tax Reduction To Enhance Annuity, IRA and 401k Ownership  For IRA, 401k, annuity and other retirement plan owners. Most plan owners do not realize plan and annuity ownership transfer is subject to the highest Federal and state tax rates.  Learn how to enhance most highly taxed and popular supposedly tax deferred and conservative savings products with tax reduction.  Maintain the tax deferral plus add tax deductibility, a LegacyChange plan and other advantages to this conservative savings instrument.  We do not sell annuities or insurance products. Date To be announced

 

 

ANNUITIES: How Long Will Payments Last?

 

A major consideration is if one wishes risking losing a significant portion of your investment to the annuity company if you die before receiving enough payments to justify the annuity purchase. There are options.

These options include:

  1. Single Life/Life Only
    Lifetime of payments but no survivor benefit.

  2. Life Annuity with Period Certain (Fixed Period/Guaranteed Term)
    Minimum period of payments - even after death of buyer - with remaining payments to beneficiary.

  3. Joint and Survivor Annuity
    Payments last life of both spouses.

  4. Lump-Sum Payment
    Entire annuity paid at once with heavy tax burden.

  5. Systematic Annuity Withdrawal
    Amount and frequency of payments customizable.

  6. Early Withdrawal
    Withdraw before 59 1/2, pay 10 percent in taxes. 72T

  7. IRA Withdrawal                                                                           Rules have minimum required distributions after 72 with a10 year disbursement requirement for beneficiaries receive all.

  8. Limitations                                                                                          Some annuities limit choices.

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Single Life/Life Only

Also known as a straight-life annuity, this choice allows you to receive payments your entire life. Unlike some other options that allow for beneficiaries or spouses, this annuity is limited to the lifetime of the annuitant with no survivor benefit. The risk is you will die before getting all or most of your money back. You can limit the possible loss here by choosing a life annuity with period certain.

Life Annuity with Period Certain (Fixed Period/Guaranteed Term)

Period certain annuities are the same as a straight-life annuity, but it includes a minimum period the payments will last – say 10 or 20 years – even if the annuitant dies. If the annuity holder dies before the end of the period, the payments for the rest of that time will go a beneficiary or the annuitant’s estate. Adding the period certain will cost you, lowering the amount of your monthly payments.

Joint and Survivor Annuity

Also known as a joint-life annuity, a joint and survivor annuity guarantees payments will last the lives of both the annuitant and another person, typically a spouse. This choice reduces the amount of each payment you receive with a life annuity or a life annuity with period certain. You can also elect to include a period certain with a beneficiary receiving payments if both you and your spouse die before the end of the period.

Lump-Sum Payment

This option allows the annuitant to receive the entire worth of the annuity at one time. This can increase the tax burden substantially by requiring taxes all be paid in that year.

Systematic Annuity Withdrawal

In this method, you choose the amount of the payments and how many payments you want to receive. This option does not include a guarantee it will last your entire life. It is entirely dependent on the amount of money in your annuity account.

Early Withdrawal

If you elect to withdraw money from your annuity before you reach the age of 59 ˝, you will have to pay a penalty of 10 percent to the government, in addition to whatever taxes you owe on the money. If that withdrawal is within five to seven years of purchasing the annuity, you may also owe the annuity provider a surrender charge of as much as 20 percent, depending on how much time has passed since the purchase.

Death Benefit

Your annuity contract may include a provision for a death benefit for a beneficiary you designate. Usually, the payout for the beneficiary will be the contract value or the amount of the premiums that have been paid.

TIP

 

If you are the non-spouse beneficiary or spouse beneficiary of an annuitant who has died, you have a few different options to receive payment from a nonqualified, deferred annuity unless the annuitant has arranged otherwise.

Five Year Rule

One involves invoking a requirement that all the money in the annuity must be distributed within five years of the annuitant’s death.

Beneficiary Life Expectancy

The beneficiary may also choose to have the money distributed according to his or her life expectancy. The life expectancy is used to calculate the minimum amount the beneficiary must withdraw each year.

Survivor Annuitization

And finally, the beneficiary may choose to annuitize the funds. This means the annuity becomes a guaranteed stream of income for the beneficiary. This can use the single-life or term-certain options described above.

Do Annuities Have Declared Dividends?

Annuities are different than stocks and do not have the same structure. With stocks, you have public corporations with boards of directors that decide to declare a dividend for payments to shareholders from company profits. Annuity payments are either fixed ahead of time or tied to the performance of an index or stock portfolio.

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WHAT IS COST SEGREGATION?

Cost Segregation is a tax strategy approved by the IRS in 1997 to reclassify specific real property assets that usually receive a depreciation life of 39 years (commercial real property) or 27.5 (commercial residential) into tangible personal property that is treated as five (5) year property or land improvements which are treated as fifteen (15) year property for depreciation purposes.
Due to improved treatment, portions of the electrical, plumbing, mechanical systems, and site improvements of a building along with hundreds of other components can be allocated into shorter lives translating into immediate cash flow.

WHAT QUALIFIES?

 

  • Any commercial building type qualifies (50 States)
  • Plan on hold building for a minimum of 3 years
  • The IRS allows us to do a look back study w/o amending returns to capture missed depreciation

ADVANTAGE

  • Free estimate on tax savings, within the hour response time
  • Two-week final report turnaround
  • IDR level audit protection included

THE VALUE OF MONEY:


This effectively increases taxpayer's depreciation expense in today's dollars. By recouping up to 40% of the building cost over the first 5 years as opposed to depreciating it over 39 or 27.5 years, translates into significant tax savings and taps into the concept of the time value of money.

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We do not market annuities, insurance or list real estate or businesses. We may, with client request or permission, refer to those who do.

C.P.R.E.S

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Ken Wheeler Jr. Mobile (515) 238-9266

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