[Mrprez]

Yes it is. I’ve had it for over four years now.

[JoelJohnson]

Originally Posted by Gigi3000

Yeah, I've read that the market is suppose to take a dive. Banks removing lines of credit etc. I'll probably take lump sum if only have to pay $30000 in taxes.

Depends on your time frame (never try to time the market, the market can stay irrational longer that you can stay solvent).

Talk to a financial accountant to figure out how to avoid paying too much in taxes.

[Gigi3000]

Is that bridge in central ohio?

[Gigi3000]

Originally Posted by glennl0159

I work in the insurance/investment world. Because of the SECURE Act and that it is a Inherited annuity you will have 2 options.
If it was an IRA account you have 10 years to pay the taxes you decide how all now, a little each year, or all at once at the end of the 10 years.
If it was non-IRA, you have up to 5 years to pay the taxes either all now or equally over 5 years.
No matter what it is taxable ordinary income and your tax rate that goes with it.
If you have no current taxable income as you mentioned it would make much more sense to liquidate it over time and pay at lower tax rates as this would be your only income.

This is what I don't understand. It's not an IRA but the bank advisor said with Lincoln Advantage Variable Index Fund I can pick the number of years to spread it over? They downplayed the 5 year option to keep with with Nationwide, said it Is an older policy....

[Gigi3000]

Because I'd like to not sound like a complete idiot when I talk to them. Sounding like an idiot anonymously is so much better

[retiredguy123]

Originally Posted by Gigi3000

This is what I don't understand. It's not an IRA but the bank advisor said with Lincoln Advantage Variable Index Fund I can pick the number of years to spread it over? They downplayed the 5 year option to keep with with Nationwide, said it Is an older policy....

It's pretty simple. The bank advisor wants you to move the money to another annuity so he can make a large commission. Even if you spread the income over several years, you will still pay the tax. You may save a small amount in taxes by delaying the income, but you will also save money by avoiding the annuity fees and other restrictions.

I would suggest that you ask the bank advisor to give you a copy of the "entire" annuity contract, not the sales brochure. He will probably refuse to provide it. But, if he does give it to you, it will be a very large document that you will not understand. I have never been able to get an annuity salesperson to provide the contract they are trying to sell. I had one hang up on me when I asked. Their sales policy is to make you buy it before you can read it. Absurd.

[CoachKandSportsguy]

there are two points of view in this type of financial decision

TAX MINIMIZATION and INCOME MAXIMIZATION

USA a CPA/tax expert for the tax minimization. Most CPA's primary goal is to minimize taxes on events which may or have happened. Minimizing taxes is good, but can be counter productive to future income or investments. ie, you can pay 27% in taxes, and lose the 27% in asset pricing, and still have to pay tax if you sell, so tax planning is strictly a tax minimizing exercise. . .

Income generation is the opposite exercise of tax minimization, which is the strength of a CFP, or other financial planner. both have consequences, one has a longer term implications to your quality of life, the other doesn't

either way, the net effect is increased financial assets and security, since it came from an outside entity, so the total just adds to your current pile of financial assets. . .

good luck, but keep the perspective of who does what and how to use them together.

corporate finance guy

[cduffield]

I have been a CFP since 1982 and we deal with this constantly. There are several factors to consider: taxes, risk tolerance, personal needs, and inheritance to name a few. My partner and I will be at the Baby Boomer Expo in September and we are setting up an office in the Villages soon. Feel free to contact me anytime to review options. Cliff Duffield

[DPauly]

Talk to Parady Financial. We have FIXED index annuities and love them....as do many others. Parady will teach you about them. It costs nothing to listen.

[Aces4]

I would hope by this time you are having a good laugh at all the, “ give me your money” and I’ll make you rich...

Keep in mind that if our government hadn’t tampered with the economy by printing funny money, created practically free money to borrow thus removing any profit from CDs to push money into the failing stock market, it would have all collapsed during the second Great Depression, oops... Great Recession. Our country is living in a house of straw and owning property is like having a house built with bricks.

[dewilson58]

Originally Posted by CoachKandSportsguy

there are two points of view in this type of financial decision TAX MINIMIZATION and INCOME MAXIMIZATION

USA a CPA/tax expert for the tax minimization. Most CPA's primary goal is to minimize taxes on events which may or have happened. Minimizing taxes is good, but can be counter productive to future income or investments.

Ouch, that hurt.
As a guy with plenty of C's, the goal is to Maximize After Tax Net Worth.

[Gigi3000]

Originally Posted by FredJacobs

Sorry, gains from annuities are taxed as ordinary income not capital gains. If you have no other taxable income, your gain of $40,000 would be reduced by the standard deduction - $12,550 - leaving $27,450 as taxable income. The tax on $27,450 for a single person, under age 65, is roughly $3,000.

I am no longer licensed to give investment advice. From a tax standpoint and that you need income it might be a good idea to surrender the annuity and find a vehicle to provide some annual income.

Fred Jacobs
Expert Tax Prep

Where do you get a gain of $40000?

[Ghat724@gmail.com]

Long term capital gains are taxed at 15%, isn't it? Don't pay taxes look for tax deferred, but stay out of the stock market. Or split it up and put parts if it in different investment vehicles!

[dewilson58]

Gigi3000...........Pull up your stakes & get out of this thread. The nuts have arrived.

[gpk111]

Originally Posted by Gigi3000

I'm 63, cost basis $160000, gain $200000. Bank advisor offered indexed variable annunity, 10 year spread. Anyone familiar with these? I have no experience with annunities. Trying to figure out whether to take lump sum and just pay the $70000 tax bill or do the annunity. If I take the annunity I'd put it into index mutual funds. My situation is very simple...I have no income, lots of savings, no mortgage on home, no tax deductions. If take annunity, goal.would be income I guess. Not taking social security, maybe take at 65.or wait until 70...

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