Small Annuity Decisions, Big Tax Consequences
May 7, 2026 by John Stevenson
Wink’s Moore on the Market: John Stevenson taught me something new today, via this article.
Case study:
A 65-year-old man, with several million dollars invested in the market. He wants reliable income that won’t be affected by the market’s highs and lows.
The choices for a solution:
Single Premium Immediate Annuity (SPIA) or indexed annuity with a Guaranteed Lifetime Withdrawal Benefit (GLWB).
The outcome:
Not surprisingly, the indexed annuity ended up paying about $200 more per month, and providing the purchaser more flexibility as well.
The solution:
The annuity purchaser put in $750,000 of non-qualified money and started income right away; the income came out to about $5,000 per month for life.
The knowledge dropped on me:
The tax play. You’ll have to read this piece for more of the good stuff! -sjm
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Many annuity advisors focus on how to generate income in retirement, or, more simply put, the end result of an annuity contract.
Fewer pay close attention to how that income is taxed, especially in the early years.
