Taxes

Starting on January 1 2010, proceeds from annuities will be free from federal income taxes when used to pay for long term care . The Pension Protection Act of 2006 provides the basis for this change in the tax law. So called "long term care annuities" provide an alternative to the purchase of a long term care insurance policy. There are pros and cons to both approaches, and consumers may wish to pursue both options as they potentially complement one another. A positive for the annuity involves...

There is a great article in Smart Money that discusses the tax implications of annuity ownership. The article also provides solid detail on swapping an existing annuity on a tax free basis through a Section 1035 exchange . A good reference for tax and Section 1035 questions. Source: Smart Money Full Story

The income limits on Roth IRAs will change in 2010. Current restrictions on Roth IRAs are set at $105,000 for singles and $166,000 for couples. Removal of these restrictions will open-up a much wider market for Roth IRAs. Higher income earners will simply need to establish a conventional IRA and then convert to a Roth. Taxes due on the conversion can be paid over the course of 2011 and 2012 rather than at once in 2010. Source: Investment News Full Story

Morningstar's Director of Personal Finance writes about the factors that are within an individual's control and therefore manageable through good planning. The economy and stock market movements are not on the list. Prudent risk management in retirement is on the list. The items that fall into the risk management category include: Longevity risk . Long-term care. Inflation . Regulatory risk and higher taxes. Longevity annuities are discussed in the context of longevity risk. Source: Morningstar...