ATTORNEY NEWSLETTER
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=”mailto:info@evanslaw.com”>info@evanslaw.com</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.
