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11 Questions Clients Have About Annuities and Taxes

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Related: 8 Things Your Clients Might Not Know About Social Security

Annuities have become a common choice for investors who want to receive a steady income stream in their retirement years. They can be structured to pay income for a set number of years (such as 10 or 20) or for the lifetime of the annuity owner. Further customization is also available for most types of annuities, though fees for such tailored insurance products can get quite high.

Understanding annuities is not as straightforward as it sounds, though, and clients will more often than not have questions regarding the various types of annuities, such as fixed, variable, indexed, and their corresponding tax rules.

Are you advising your clients correctly when it comes to their investments in annuities? In the gallery above are 11 important tax and financial planning questions and answers advisors should be aware of regarding such investments, and the corresponding taxation rules, according to ALM’s Tax Facts Online.

(Graphics: Chris Nicholls/ALM)


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