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Feb 1, 2018 by |

Marin County and California Elder Abuse and Annuity Attorneys: Annuities and Taxes


Beware Annuity Sales Hype

Always Think About Taxes

Are you a California resident over age 60 taking a close look at your future retirement savings level? The New Year is a good time to do just that and there are a few important factors to keep in mind.  Tax deferred investments are the bedrock of any sound retirement savings.  Amounts contributed to Social Security, IRAs, 401(k)s, SEPs, and other retirement accounts all grow tax deferred over your working life.  If you’re over age 60 and have an annuity included in your retirement savings portfolio, beware when an insurance agent pushes any kind of surrender, rollover, and/or replacement of that investment.  We at Evans Law Firm Inc. represent California residents over age 60 who have lost money, including in the way of taxes, on annuity surrenders and/or replacements.[1]   If you or a loved one is a California resident over age 60 who has suffered loss from surrender penalties and/or a tax loss as a result of a surrender or replacement transaction, contact the annuity and financial elder abuse lawyers at Evans Law Firm at (415)441-8669, and we may be able to help. 

Agents often push annuity replacements or “churns” because they stand to receive a sizeable commission on the transaction. Any replacement may result in payment of surrender penalties under your existing contract. But you may also ending up paying taxes on the surrendered amount if the agent does not structure the transaction properly.  If you decide to replace or rollover one annuity into another annuity, you are always better off doing a tax free exchange, referred to as a 1035 exchange.  Agents may try and talk you out of the 1035 exchange because it can take several months for the two carriers to process the exchange and commissions are delayed.  Don’t let them; when you surrender, take the money, and buy the new contract, you are may well be taxed on the total of your surrender amount. The IRS will not tax a proper 1035 exchange; any other transaction may be taxed.

Proceed with Caution

Always review the tax consequences of an annuity with your accountant or tax preparer before you buy. Be especially wary of annuities as retirement plan vehicles; they are complex and dangerous, often unsuitable, and the tax consequences can be disastrous.  Don’t lose tax deferral benefits; annuity withdrawals may be subject to tax prematurely.  Resist high-pressured sales pitches or agents who gloss over details.  Refuse quick decisions.  Consult an independent financial consultant or counsel who is not compensated by sales commissions.  Talk to your accountant or tax preparer.  Take your time and get professional help.

Contact Us

If you or a loved one is a California resident over age 60 who has experienced a tax penalty or other financial loss (beyond that of reasonable investment risk) in Marin County or anywhere in California, contact Ingrid Evans and the other Evans Law Firm annuities, financial elder abuse, and fraud attorneys at (415) 441-8669, or by email at <a href=””></a>. Our attorneys have experience with annuities, life insurance, and large insurance companies.  We can help guide your case through a jury trial or toward an equitable settlement.  We handle cases involving physical and financial elder abuse, qui tam and whistleblower law, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.

Some of the leading providers of annuities and life insurance in California are listed below. We do not suggest in any way that these carriers have sold unsuitable new or replacement contracts.  Rather, the list is provided solely for our readers’ reference.

Allianz Life Insurance Company of North America

Allstate Life Insurance Company

American Equity Investment Life Holding Company

American General Life Insurance Company

American National Insurance Company

Ameriprise Financial/RiverSource Life Insurance Company

Athene Annuity and Life Company

AXA Equitable Life Insurance Company

Bankers Life Insurance and Casualty Company

EquiTrust Life Insurance Company

Fidelity & Guaranty Life Insurance Company

Guggenheim Partners/First Security Benefit Life Insurance Company

Global Atlantic/Forethought Life Insurance Company

Genworth Life Insurance Company

Guardian Life Insurance Company

ING USA Annuity and Life Insurance Company

Jackson National Life Insurance Company

John Hancock Life Insurance Company

Life Insurance of the SouthWest/National Life Group

Lincoln Financial Group/The Lincoln National Life Insurance Company

MassMutual/Massachusetts Life Insurance Company

MetLife/Metropolitan Life Insurance Company

Midland National Life Insurance Company

Mutual of Omaha/United of Omaha Life Insurance Company

National Life Group/Life Insurance of the SouthWest

New York Life Insurance Company

Pacific Life Insurance Company

Principal Life Insurance Company

Pruco/Prudential Life Insurance Company

RiverSource Life Insurance Company/Ameriprise Financial

Security Benefit Life Insurance Company/Guggenheim Partners

Symetra Life Insurance Company

Transamerica Life Insurance Company

United of Omaha Life Insurance Company/Mutual of Omaha

Unum Life Insurance Company of America

Voya/Reliastar Life Insurance Company

[1] We do not provide investment or tax advice, and always review any annuity transaction with your tax advisor before you enter into it.

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