Defined terms for the annuity market and lifetime income landscape.
A 1035 exchange is a tax-free swap of one annuity or life insurance contract for another eligible contract under IRC Section 1035, allowing the contract owner to move from one product to another without triggering current income tax on any accumulated earnings.
A 401(k) plan is a defined contribution plan established under Internal Revenue Code Section 401(k) that permits an employee to elect to have a portion of compensation contributed to the plan on a pre-tax or Roth basis, with employer contributions optional.
A 403(b) plan is a defined contribution plan under Internal Revenue Code Section 403(b) available to employees of public schools and certain tax-exempt organizations, permitting pre-tax or Roth salary deferrals into annuity contracts or custodial mutual fund accounts.
A 457(b) plan is a nonqualified deferred compensation plan established under Internal Revenue Code Section 457(b) by a state or local government employer or a tax-exempt organization, permitting eligible employees to defer compensation on a pre-tax or Roth basis into the plan.
