Myth Buster: Actually, IRAs Can Be a Great Place for Annuities!

RELATED CONTENT

How to Evaluate Your Client’s Current and Future Marginal Tax Rate

Horsesmouth Essential: Proper tax planning relies on understanding what the tax consequences will be for various tax strategies. What tax rate, at the margin, will apply to the next dollar of income or deductions? And for strategies that can shift income—like Roth conversions—you’ll need both a current marginal tax rate and a good estimate of a future tax rate.

The Crossover Zone: How IRA Withdrawals Can Trigger the 3.8% Medicare Surtax

Horsesmouth Essential: While retirement distributions are not considered investment income for tax purposes, the reality is that a withdrawal can indirectly trigger the additional 3.8% surtax if there is enough existing investment income. At that point, investors have entered the “crossover zone”—which offers income shifting and tax planning opportunities for proactive advisors.

Is Variable Annuity Tax Deferral Worth Paying for Again?

When tax rates were lower, variable annuities made sense only from a risk management perspective. Now, as tax and growth rates start to rise, low-cost variable annuities could make a good asset location vehicle for higher-returning investments.