Tax Time-Bomb you may be sitting on one!

Are you sitting on a time bomb? Yes, a “tax time-bomb”. You might have bought one and do not even know it. Simply waiting for the right time to explode.

During the past ten years, billions of dollars have been placed with annuity and life Insurance companies by America’s senior citizens looking for yield, safety and liquidity. The vehicle most often chosen for this purpose was the fixed annuity or the Equity Indexed Annuity. Tax deferred interest at generally higher rates was a lure few could resist. For the salesman, it was an easy sale. For the client, better interest rates than he/she could get at the bank, and the option of annuitizing the contact at the appropriate time. No one discussed what happened at the death or how the proceeds would be taxed. It was really a savings alternative. Now that the annuity interest rates are no longer greatly superior to CD’s, the excitement is over. Reality is facing the concerned seniors. Their old money is now earning as little as 2% to 3% in some annuities, which is a lot, lower than any CD’s at the bank.

The fixed annuity contracts for senior citizens may be a dinosaur. Except in cases involving the need for current income in retirement years. Historically, less than 5% of seniors actually even annuitize their contracts, surrender them, or otherwise draw down current income. So, why even have one?

What happens at death in the event the contract was never annuitized was not a big part of the initial discussion. As a result, beneficiaries and heirs are getting hit with large tax bills when mother dies because all of the tax build up inside the annuity contract becomes taxable at death!

This negative aspect of the annuity contract raises a very serious question - what are my alternatives? How can I pass my life savings - which I worked so hard for all my life - to my heirs - without Uncle Sam taxing it?

Do not wait any longer. Call now to learn how simple it is to come out of such a dreadful situation you have got yourself in to. During our meeting, I will be able to shade more detailed light on the subject by showing you the concept of how to transfer your assets without paying a single red cent in taxes. Wouldn’t you like to have your Cake and eat it too?

I am looking forward to meeting you.

Sincerely,

Mukul (mike) Sheth CAC, CEPC, CIDA
Sigma Senior Resources