BrianB
Recycles dryer sheets
I haven't seen any discussion of this on the boards; my apologies if it has already been discussed elsewhere.
In the book "This is not your parents retirement" author Patrick Astre offers an unusual tax saving strategy that I might be able to use. I'm wondering if any of our experts has heard of or used it:
The IRS recognizes "1035" tax deferred exchanges that allow a person to move cash value and cost basis from one life insurance policy to another, or to an annuity (Hold the grenades - I know annuities are generally not good especially in low interest times.)
I have a 10-year level term policy that will expire in October 2014.
Total premiums paid (cost basis) = $5280.00
Cash value = $0.00 (it's a term policy)
So if I "exchange" my term policy for an immediate fixed annuity for $50000 I can add the $5280.00 for a total basis $55280.00.
This would allow me to shelter most all of the return - effectively making my old term policy premiums tax-deductible. The funding would be helpful to make our "bridge" to age 59.5
What do you think?
In the book "This is not your parents retirement" author Patrick Astre offers an unusual tax saving strategy that I might be able to use. I'm wondering if any of our experts has heard of or used it:
The IRS recognizes "1035" tax deferred exchanges that allow a person to move cash value and cost basis from one life insurance policy to another, or to an annuity (Hold the grenades - I know annuities are generally not good especially in low interest times.)
I have a 10-year level term policy that will expire in October 2014.
Total premiums paid (cost basis) = $5280.00
Cash value = $0.00 (it's a term policy)
So if I "exchange" my term policy for an immediate fixed annuity for $50000 I can add the $5280.00 for a total basis $55280.00.
This would allow me to shelter most all of the return - effectively making my old term policy premiums tax-deductible. The funding would be helpful to make our "bridge" to age 59.5
What do you think?