Open Bank, USU, United States discussed on Radical Personal Finance
You can also do an exchange from a life insurance contract into an annuity contract. And there are a couple of different couple of different permutations of the go of going between life and long-term care nudity, etc. But ten thirty five exchanges could be very useful. Because as those values grow in annuity you can exchange them from one annuity to another annuity. If there's an annuity that better fits your circumstances. And better fits your situations. You should know that. However, if you don't keep it in. Annuity and if you surrendered nudie before fifty nine and a half you will pay ordinary income taxes on the gain. Plus if it's before fifty nine and a half a ten percent penalty tax if it's atrophied into nine and a half, you'll just pay ordinary income taxes and those taxes are assessed. If it's a lump sum they'll be assessed as a lump sum if receiving a series of new witty payments, you'll pay taxes based upon an exclusion ratio, which represents the amount of the annuity contract that was your contribution versus in amount that was your taxable profit. Notice the words that I said a moment ago in a slum stream of tax words, which was ordinary income one of the disadvantages of purchasing annuities is the growth on an annuity is ordinary income, which is usually the highest taxed category for most people. This means that although you could purchase variable sub accounts that have investments in them. That's useful. But what you don't get is. You don't get the treatment of those account as long term capital gains, which are usu-. Really at least in the current US tax code a lower tax rate. And so you need to do attacks analysis when purchasing an annuity as well. That covers basically taking money putting it into a new ity for the purpose of protecting that money. It is a valuable useful strategy. It's also not quite as simple as some of the other strategies we have discussed, but it is a valuable useful strategy. You can take money that is exposed to the claims of creditors because you are holding it in just open investment accounts and open Bank accounts, and you can purchase an annuity the suited to your investment objectives. And then annuity value can be protected from the claims of your creditors..