Legislation Would Waive
Tax On Annuity Income
Legislation eagerly awaited by the life insurance industry that would waive half the taxes on a guaranteed stream of income for life for consumers when they purchased an annuity has been introduced.
A bipartisan group of legislators introduced the Retirement Security for Life Act in both the House and Senate last week. The legislation, if enacted, would waive federal taxes on half of the income generated by the annuity, up to a maximum of $20,000 annually. For the typical retiree, it would provide a tax break of up to $5,000.
Sponsors of the legislation include Sens. Gordon Smith, R-Ore., and Kent Conrad, D-N.D., and Reps. Nancy Johnson, R-Conn., and John Tanner, D-Tenn.
“Were going to have big challenges in the coming years as more Americans retire,” Smith said. “We need to be looking at ways to help people plan for their futures. Providing tax incentives for annuities is one of the easiest and most important things we can do.”