The Primary Reasons People Buy Annuities
Safety of Principal!
Most people have worked hard all their life accumulating their “nest-egg”. They should not put their money in risky investments, especially our senior citizens. Most seniors are more concerned about the “return OF their money than the return ON their money”. Annuities are considered to be safe investments for the following reasons:
- No market risk
- Backed by the financial strength of large life insurance companies who are required to set aside a portion of their assets (reserves) to cover claims.
- They also spread their risk through the industry’s reinsurance network, i.e. several companies share in a particular risk.
- Tax Deferral – Taxes are paid only when money is received. IRC Section 72 This results in a much faster cash build-up. Your principal grows because you receive:
- 1) interest on the principal;
- 2) interest on the interest;
- 3) interest on the money that normally would have been paid in taxes.
Competitive Interest Rates – At present, and historically, annuities outperform CD’s and money market accounts.
Accessibility– One of the biggest concerns, especially with seniors, is “Do I Have Access to My Money, Should I Need It?” There are a number of choices:
- Withdraw interest as needed, monthly, quarterly, etc.
- Exercise free withdrawal privilege
- Total surrender
- Annuitize (choose one of a number of income options)
Avoids Probate – By naming a beneficiary, your annuity account is paid directly to a named individual, making it accessible and eliminating probate costs.
Interest Rate Guarantees – Almost all annuity contracts have minimum rate guarantees…the rate can never go below a specified amount.
Current Income Reduction – CD’s, money market accounts, savings accounts, etc. require current taxation of interest earned even if it is not taken. Annuities are taxed only upon receipt of interest.
Lifetime Income Option – Annuities are the only investment vehicles available that guarantee you cannot outlive your monthly payments
Avoid Risk and invest in a tax deferred annuity! Your PRINCIPLE & INTEREST is FULLY GUARANTEED at all times!!
You get:
- Triple Compounding
- Tax Savings
- No Fees or Load Charges
- Competitive Interest
- Probate Avoidance
- No Market Risk
- Does not affect taxation of your social security
- Liquidity (Ability to withdraw funds) (Brsan)
Consumer Resources
2 page summary that comes with the policy
Minimum Reserves required by California DOI
Met Life Annuity Definitions – Glossary
Glossary – Annuity Advisors
Annuities – CA Dept. of Insurance – What Seniors need to know
IRS FAQ Required Minimum Distributions
4 hour CE Agent Course – Sandi Kruise
Power of Tax Deferral -
from North American Brochure

Annuities -
What Seniors Need to know - HTML
CA DOI Pamphlet
NAIC - National Association of Insurance Commissioners
Buyer's Guides
- Fixed Deferred Annuities
- Deferred Annuities - Variable
- Deferred Annuities - Fixed
- Deferred Annuities
How much of your Pension & Annuity Income goes on line 4 of IRS 1040 and
thus counts towards MAGI Income for Covered CA subsidies?
Just the Count Taxable Portion of your Pension
Covered CA Countable Income
Reported on 1099-R Form 1099-R Instructions for Forms 1099-R and 5498 (HTML)
#Line11 Adjusted Gross income then add line 2a, 6a & 8 (Foreign Income)
to get Covered CA MAGI Income
1040 Form *** Schedule 1 Additional Income & Adjustments to Income
#Retirement Benefits # 10035
*********************
Social Security
Understanding the Benefits # 10024
25 pages
Set up an ONLINE Social Security Account - You also need it to get enrolled in Medicare Parts A & B
VIDEO
How Social Security Can Help you Plan for Retirement
30 minutes
Steve's Social Security Video's explaining how to use and benefit from these pages
- Optimum Age to start taking social security retirement
- Survivor Death Benefits Social Security SSI SSDI
- Social Security Retirement Benefits Maximize age 62 or 70?
- How are Social Security retirement benefits taxed
- reduced Social Security retirement Benefits if you are working
- Story of Medicare - Timeline
History of Medicare
on cms.gov
govbooktalk.gpo.govhappy-birthday-medicare/
Nolo Social Security, Medicare, Medi Cal & Government Pensions
Requirements for Replacement of Life Insurance and Annuity Policies …………………….. 10509-10509.9
Standard Nonforfeiture Law for Individual Deferred Annuities ……………………. 10168-10168.93
Misrepresentation of Policies ………………….. 780-784
Senior Insurance …………………………. 785-789.10
Unfair Practices …………………………. 790-790.15
General Provisions ……………………… 10110-10127.18
Pension and Annuity Income Glossary – Annuity AdvisorsCalifornia
Insurance Code – Standard Nonforfeiture Law for Individual
Deferred Annuities 10168-10168.92
Requirements for Replacement of Life Insurance – Annuity Policies 10509-10509.9
Article 6. Misrepresentation of Policies ………………….. 780-784
Article 6.3. Senior Insurance …………………………. 785-789.10
Article 6.5. Unfair Practices …………………………. 790-790.15
2 comments on “Annuity Income? IRA, Pension # 1040 Line 4”
I have just begun to receive retirement income that will make me ineligible to continue to receive Medi-cal benefits.
I have questions about the Kaiser Program…
We will answer your Kaiser Coverage questions here:
https://individuals.healthreformquotes.com/companies/kaiser/
When you lose Medi Cal, that gives you a special enrollment period:
https://individuals.healthreformquotes.com/open-enrollment-for-individuals-families/ccr-code-regulations-ca-%c2%a76504-special-enrollment-periods/
Get quotes here:
http://www.quotit.net/eproIFP/webPages/infoEntry/InfoEntryZip.asp?license_no=0596610