Bohemia, NY (PRWEB) March 25, 2013
On March 25, 2013, Savings2Income releases a new installment to its facts and fictions series about annuities, and how they can have an impact on your retirement plan. This new installment covers Variable Annuities (VAs), the most popular type of annuity, with over $1 trillion in assets. In spite of their success, even advisors have questions as to how VAs can impact their clients’retirement planning.
Savings2Income developer Jerry Golden answers some key questions about VAs:
•Are variable annuities complicated? If you separate the basic chassis from the living benefit guarantees, the non-qualified VA chassis is relatively simple:
-You invest money in a VA contract that has already been taxed either in a lump sum or in periodic contributions. You have a wide choice of mutual funds in which to invest your VA account.
-Investment returns from your mutual funds under a VA are not taxed as earned. You eventually have to transfer the VA account value to a payout annuity, and most contracts allow you to wait until age 90 to do so, at which point taxes on the payout are due.
-Withdrawals from the VA are taxed as ordinary income (with a penalty tax for withdrawals before 59 ½). Taxes are spread if you convert the VA account to a payout annuity.
Jerry Golden goes on to say, “My advice about the variable annuity business is to go back to its fundamentals, and offer what the contracts were originally designed for - a low cost way to grow retirement savings on a tax-deferred basis and to convert those savings into guaranteed income through a payout annuity.”
An innovative retirement planning method called Savings2Income (S2I) created by Jerry Golden seeks to provide a clear path to retirement security for those saving for retirement, soon to retire, and recently retired. S2I incorporates Rollover IRA savings, personal retirement savings held outside an IRA or 401(k) plan and Social Security into an integrated solution.