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New annuity legislation provides tax protection.

A Senate bill could provide a 50 percent tax exclusion on up to $40,000 in annual income from a non-qualified lifetime annuity.

The Retirement Security for Life Act was introduced by Sens. Kent Conrad and Pat Roberts, both members of the Senate Finance Committee. If the bill passes, a taxpayer could receive up to $40,000 per year in lifetime annuity income and keep half of that total out of taxable income.

A typical retiree in the 25 pecent tax bracket who used a lifetime annuity could save up to $5,000 in taxes annually.

The legislation is similar to a House bill recently introduced by Reps. Early Pomeroy and Ginny Brown-Waite. Experts predict that, with companion bills in both houses of Congress, the legislation is likely to pass in some form.

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Title Annotation:Short Takes
Publication:Agent's Sales Journal
Date:Aug 1, 2009
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