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Why the Life Income Strategy ™ makes sense…now

Why the Life Income Strategy ™ makes sense…now. In 2014 , Taxes are going up!. Which income tax provisions will change?

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Why the Life Income Strategy ™ makes sense…now

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  1. Why the Life Income Strategy ™ makes sense…now

  2. In 2014, Taxes are going up! Which income tax provisions will change? • The 10 percent tax bracket will disappear and the 25 percent, 28, percent, 33 percent, and 35 percent rates will revert to 28 percent, 31 percent, 36 percent, and 39.6 percent respectively. • The phaseout of personal exemptions and limit on itemized deductions will return for high-income taxpayers. • The standard deduction and the width of the 15 percent tax bracket for married couples filing jointly will both shrink from twice that for single filers to 1.67 times as large. • Dividends will be taxed at regular tax rates rather than at the lower long-term capital gains rates. • Long-term capital gains tax rates will increase from 0 percent to 10 percent for taxpayers in the 15 percent bracket and below and from 15 percent to 20 percent for filers in higher tax brackets. • The child credit will be halved to $500 and become largely non-refundable. • The child and dependent care credit and the earned income credit will be pared back.

  3. Alternative Minimum Tax Many more taxpayers will pay the alternative minimum tax (AMT). In recent years, Congress has increased the exemption for AMT each year to keep the levy from affecting millions of taxpayers. Expiration of the 2001 and 2003 income tax cuts will reduce the impact of the AMT by raising regular taxes—people pay the AMT only if it exceeds their regular tax. Still, if Congress doesn’t continue to allow higher AMT exemptions, many more taxpayers will owe the alternative tax. And … The estate tax will come back into existence under pre-2001 law. Source: Tax Policy Center. www.taxpolicycenter.org

  4. Tax Rate increases between 2012 and 2013

  5. A new “unlimited” tax advantage savings program: no contribution limits Tax-deferred accumulations Tax-free distributions Guaranteed minimum return Automatic tax cost reimbursement Does not require active management The Life Income Strategy

  6. Why this makes sense … now • Not affected by higher future income or capital gains taxes • No sponsoring organization insolvency risk – no substantial risk of forfeiture • Internal earnings accumulate tax-deferred – distributions are income tax-free • No contribution limits • Life insurance death benefit protection • Diversifies both your portfolio and pre-tax vs. after-tax retirement income resources • Take distributions when wanted – not subject to distribution rules or penalties • Protects against fluctuating tax rates • Optional employer contributions (no limitations or caps)

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