Same retirement dollars — potentially a very different contract. Here’s what a 1035 exchange is, and what it can cost you.
A 1035 exchange can allow you to move from one annuity contract to another without paying tax on the gain at the time of the exchange. Same retirement dollars — but potentially a very different contract.
If you bought your annuity years ago, it was designed around the products and conditions available at that time. Income riders have changed. Contract features have changed. That doesn’t mean your current annuity is bad — it means it’s worth asking whether it still fits what you need today.
This isn’t really about replacing one contract with another. It’s about your entire retirement-income picture — what you’ve got coming in, what your essential expenses are, and where the gaps may be. The annuity is one piece of that plan. See where your income gap is →
Get a second opinion before you make your next decision.
Talk to your tax advisor about tax matters.
This page is educational and is not investment, tax, or legal advice. Annuity guarantees are subject to the claims-paying ability of the issuing insurance company. A “personal pension” refers to guaranteed income from an annuity issued by a licensed insurer. Product features, availability, and terms vary by contract and state. Consider your own circumstances and consult a licensed professional before acting. We started in Tennessee ten years ago; today we help retirees nationwide.
Not exactly. A 1035 exchange can move you from one annuity contract to another without paying tax on the gain at the time of the exchange — same retirement dollars, a potentially different contract.
If you’re still inside a surrender period it could cost more than you gain, a new annuity may start a new surrender period, and you may give up benefits or guarantees.
No — sometimes the right answer is to stay where you are. Get a second opinion before you decide, and talk to your tax advisor.