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How can I lower my social security tax with an annuity?

Many middle-and upper-income retirees will find that some relatively simple shifts in investment strategy can help protect some of their Social Security benefits from being taxed away. In order to understand the impact of these strategy shifts, you must first understand the current system for taxing Social Security benefits.

Social Security benefits are not subject to federal personal income tax if the taxpayer's "provisional Income" is below the "base amounts" of $32,000 for Married Filing Joint filers. and $25,000 for all others. Provisional income is calculated by taking Adjusted Gross Income (without Social Security benefits) plus tax-exempt interest plus half of Social Security benefits. need help?

Repositioning investments into tax deferred annuities can have a dramatic impact on your taxable income while increasing your overall wealth. Annuities are also an excellent vehicle for purchasing long term care insurance, further safeguarding your retirement assets.

There are many types of annuities, Basically, an annuity is defined by its characteristics. An annuity is either "deferred" or "immediate." An annuity purchased now that will pay proceeds at a future date is a "Deferred" Annuity. One that begins payments immediately is an "Immediate" Annuity.

The greatest fear that many consumers must face is the prospect of outliving their assets during retirement. An Immediate Annuity provides a guaranteed income for life or for a specified period of time in exchange for a single, lump sum premium. An Immediate Annuity will give the consumer the security of knowing that they won't out live their assets during retirement. It is the only financial product that can make this claim.

Some consumers choose to diversify into an Immediate Annuity for guaranteed income, then rebuild the assets used for the purchase with a Deferred Annuity. Using a combination of different annuities with a specific sum of money to accomplish an objective is often referred to as a "Split Annuity" of "Split Fund Annuity." (Example available, see below) [or, Phyllis, we could put in a link here to the CD comparison page]

Using funds from a Split Annuity is an effective method of paying for long term care insurance. But what if you have waited too long to invest in long term care insurance and now you no longer qualify medically? Are you or a loved one receiving care now and want to put a cap on expenditures, protecting the balance of your assets? There are solutions for these problems as well.