Did You Know?
- That, as of the first quarter 2011, the combined net assets of U.S. variable annuities were valued at nearly $1.6 trillion, an 11% increase from first quarter 2010 and the highest level ever recorded?
- In 2010 fixed annuity assets were valued at $659 billion a 6% increase from 2009?
- That in 2010, the total average expense difference between variable annuities and mutual funds was 1.01%?
- In 2011, the contribution limits range from $5,000-$6,000 for an IRA, $16,500-$22,000 for a 401(k) and $200,000 plus for a non-qualified annuity?
- That the average number of funds per variable annuity contract was 50 in 2010, of which 47% of assets were invested in equities, 11% in bonds, and 20% in fixed-rate accounts?
- That the guaranteed lifetime withdrawal benefit was offered on 79% of variable annuities in 2011 and was elected by 65% of contract holders?
- Boomers who own annuities have a higher confidence in retirement expectations, with 92% believing they are doing a good job in preparing for retirement?
Tools to Assist in Your Investment Decisions
How Can Variable Annuities Help at Tax Time?
Because variable annuities are tax deferred, you don't report any earnings on your Form 1040. This is not the case with taxable investments.
For example, each year mutual funds generally must distribute all dividends, short-term gains and long-term capital gains realized by the fund through its investment activities. When you invest in taxable mutual funds, each year you receive a Form 1099 indicating your earnings which must be reported on your tax return. With a variable annuity, on the other hand, your earnings are not taxed while you are saving for retirement, you receive no 1099s, and there are no calculations to perform.
So, you can see, variable annuities can simplify your life at tax time.
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