Are Annuities good retirement vehicles

By | July 7, 2009
Great article on Annuities and how they are designed to create an income that cannot be outlived. Annuities are not right for everyone but can be great options in the right scenario.
clipped from www.omaha.com
Annuities: The right plan?

In the wake of a slide that erased half the value of the U.S. stock market, legislation has been introduced in Congress to make annuities and similar retirement plans offering guaranteed lifetime payments more attractive.

The House measure would provide a tax advantage on payments from annuities, investment retirement accounts and other retirement plans that offer lifetime, guaranteed income. Defined-benefit company pensions, which also provide lifetime payments, would be excluded.

The tax advantage would vary depending on an individual’s tax situation and details of the retirement plan. For example, 50 percent of otherwise taxable portions of annual payments from lifetime annuity plans — up to $10,000 — funded through after-tax dollars could be exempt from income taxes. Twenty-five percent, or up to $5,000 for an individual and $10,000 for couples, could be exempt from plans funded with pre-tax dollars.

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