Could a 1035 Exchange Help You?
For Mark Roberts’ Use: It is often said that we should all reevaluate our retirement plans and life insurance policies every few years, to make sure the measures we’re taking are in line with our needs and goals. But what if you discover that your annuity or life insurance policy no longer serves you well, or that a better deal is available elsewhere?
You may be able to find another contract that features lower costs, a higher death benefit, or more investment choices. Keep in mind that the cost and availability of insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before surrendering your “old” life insurance policy, it would be prudent to make sure that you are insurable.
If you purchased your policy years ago and find that it no longer works for you, you may be able to exchange it using a 1035 exchange.
Normally, exchanging a life insurance or annuity policy could trigger negative tax consequences. That’s why a 1035 exchange is helpful. With a 1035 exchange, you can switch to a more beneficial policy while avoiding those taxes.
A 1035 exchange can be complex, and you could incur surrender charges from your old annuity or life insurance policy. You can also do partial 1035 exchanges for a portion of the total contract amount. The transferring company should notify the new company of the exchange amount that is investment versus gain, because any gain is subject to ordinary income taxes when withdrawn. Also, some companies do not recognize partial 1035 exchanges for tax reporting purposes, so remember to fully investigate your options before making a final decision.
A tax professional should be consulted to properly operate your 1035 exchange. It can be a tricky business, but worth it if the benefits of your new annuity or life insurance policy far outweigh the benefits of your old contract.
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In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution.
Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies.
Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.”
Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.