The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing

URL:  http://boards.fool.com/1035-transfer-12022349.aspx

Subject:  1035 Transfer Date:  2/21/2000  4:21 PM
Author:  gebanks Number:  19372 of 74759

10 years ago, I (foolishly?) bought into a type of "insurance" sold by Equitable. It was a term policy, and was connected to an investment vehicle that worked like this: after the amount for term insurance was deducted from each contribution, the rest was invested in mutual funds (I selected the choices). At any time I wished, I could borrow money from my account at a 1% interest rate. The idea was that I could then access the full account this way without paying any more taxes, since these withdrawals were "loans" far below market rates. One thing I forgot, and that was how expensive term insurance gets as you age. I don't need the insurance now, but the only way to get the money out is apparently to do a "1035 transfer" which prevents me from having to pay taxes on the gains. I'm wondering, though, whether I should even bother with this, or just cash in the policy for its redemption value, pay the capital gains on it, and then invest it Foolishly. Does anyone know of a good investment that could be made with the 1035? I've only found annuities that do the 1035s, not equity investments.
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us