For Future Tax Flexibility, Consider a Variable Annuity
April 29, 2020 by Scott Stolz
As the market headed toward the 11th anniversary of the bull market, many advisors found themselves with a dilemma: How do you reduce client equity exposure without incurring substantial capital gains? Do you just bite the bullet by selling equities and moving the proceeds into a more conservative asset class, or do you just hold tight and hope the market doesn’t solve some of the problem for you?
For those of you who elected to sell and incur the taxes, I’m sure you and your clients are glad you did. For those of you who elected to ride it out, I’m sure you are now hoping the market soon recovers. In the interim, let me suggest a proactive step that you can take to help avoid this situation again in the future.
Now that your clients’ unrecognized taxes have been significantly reduced, consider moving some of those assets into a variable annuity — not because of the lifetime income it can provide, but because of the tax flexibility it offers.
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