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- Title
After-tax value of annuities.
- Authors
Horan, Stephen M.; Robinson, Thomas R.
- Abstract
This paper adds to the growing literature on after-tax asset valuation and asset allocation by developing a model to value annuities on an after-tax basis. Qualified and non-qualified annuities are shown to be equivalent to a tax-deferred account (like a traditional IRA) plus a cost basis tax shield, if any. Viewed in this light, the after-tax value of an annuity decreases as the investment horizon increases, but is independent of the risk of the underlying investment.
- Subjects
ANNUITIES; TAX basis; ASSET allocation; DEFERRED tax; INVESTMENTS; TAX deductions
- Publication
Financial Services Review, 2008, Vol 17, Issue 3, p169
- ISSN
1057-0810
- Publication type
Article