In 2014 $236 Billion in annuities were written. Each year a majority of that business gets sold through 1035 Exchanges. We gather from this information that client’s aren’t using their annuity for income… So when asked what they are using it for we hear…
“I figure i will use for an emergency.”
“I plan on passing it on to my kids since I don’t need it.”
So what can you do with their annuity to protect their other assets from an emergency 70% of Americans will face age 65 and older? How do you plan to protect them and their investments from a potential Long Term Care event?
The answer is a 1035 to Annuity Care II
Help them protect their other assets with Annuity Care II. If they need it for care, they will have a much larger amount available to pay for care and is tax-free. If they don’t need it for care, then their kids will still get the annuity.
Wilma age 60 has a Non-Qualified annuity with $60,000 cost basis, now worth $100,000 with $40,000 of taxable growth. She can 1035 her current annuity to Annuity Care II with OneAmerica. So what are the benefits?
- The growth is tax-free for LTC expense withdrawals under the Pension Protection Act.
- It has added another bucket valued at $150,000, also tax-free.
- She has a total “bucket” valued at $250,000 for LTC expenses (2.5 times leveraged)
- If she never needed care, her kids get the value of the annuity…..just like she planned.
- $100,000 immediately turns into $250,000 for LTC expenses!
Let us know if you have a client to discuss. Also, ask us how we can help you with a partial 1035 exchanges!