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Named One of
America’s Top 25 Accounting Firms
by Inside Public Accounting
Annuities come in three flavors
Here are the three types of annuities:
1. Fixed. These annuities provide fixed returns tied to the
performance of the insurance company’s general investment portfolio and
usually guarantee a minimum rate of return (3% or 4%, for example). A
fixed annuity is usually the best option for reduced risk and guaranteed
lifetime income.
2. Variable. Variable annuities allow you to select from a menu
of stock and bond funds. They tend to outperform fixed annuities over
the long term, but they don’t guarantee a minimum return. Because you
bear the risk of market volatility, a variable annuity may not be the
best choice if peace of mind is your primary goal. Variable annuities do
offer a death benefit, however, that pays your beneficiary the greater
of the account’s value or a guaranteed minimum benefit.
3. Equity-indexed. These annuities are hybrids. Like fixed
annuities, they guarantee a minimum rate of return, but they also allow
you to tie your return to the performance of an equity index, such as
the S&P 500. Most equity-indexed annuities limit your upside potential
to a percentage of index growth or an annual limit on gains. Also, many
equity-indexed annuities guarantee only a portion of your principal (say
90%), so you’re not insulated against losses.
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Tax Tips
To Roth or not to Roth?
This section presents brief
notes on Pension Protection Act changes to Roth 401(k)s,
setting up a trust to hold life insurance, substantiating
small charitable contributions and flexible spending
accounts.
Read more
Finding your comfort zone
Annuities can provide financial peace of mind
With life expectancies
continuing to climb, you may be concerned about whether your
savings will last. If you‘re approaching retirement, an
annuity may help you feel at ease with your planning
efforts. With their modest rates of return, annuities are no
substitute for other retirement planning vehicles. But they
can make up for their lack of earning power with the peace
of mind that comes with a guaranteed income stream for life.
Also, unlike other “safe” investments, such as certificates
of deposit, annuities offer tax-deferred growth. This
article looks at the advantages and disadvantages of
annuities.
Red
more
Energy-efficient buildings
can provide insulation from taxes
The Energy Policy Act of 2005
created more than $14 billion in tax breaks to promote
energy production and conservation in the United States. One
of these breaks is a tax deduction of up to $1.80 per square
foot for commercial building owners or tenants who make
their properties more energy efficient. The Tax Relief and
Health Care Act of 2006 extended the deduction through 2008.
Property or improvements placed in service between Jan. 1,
2006, and Dec. 31, 2008, qualify. This article reviews how
businesses can conserve energy while saving money.
Read more
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Be TRU to your
beneficiaries
A total return unitrust can help avoid conflicts of
interest
Most estate plans rely on trusts to achieve a variety of
tax and nontax objectives. And though they’re very
effective estate planning tools, traditional trusts have
one significant drawback: They can create a conflict of
interest between your current beneficiaries, who receive
the income the trust generates, and your remainder
beneficiaries, who receive what’s left at the end of the
trust term. This article explains how a total return
unitrust (TRU) can align the interests of your current
and remainder beneficiaries — helping you to avoid these
conflicts.
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