Dual Income, No Kids (DINKS)

Finance a la shmoop....what is a 1035 exchange? well why don't they

give these things a name like what pathos is there in a number well it [Arrow pointing to star in the solar system]

makes your life miserable remembering all these numbers and frankly doesn't

make our life any easier writing pithy epithets about them you know as we go

but all right we'll try here we go...A 1035 exchange is a swap more

specifically it's a swap relating to life insurance policies or annuities you

have one annuity or life insurance policy and want to exchange it for [Two life insurance policy documents]

another of similar value so you use at 1035 exchange to do it's like a legal

structure why well because a 1035 is tax-free.. tax-free yeah that's good why

would there be a tax when you're changing policies well an insurance

policy is just another form of an investment and with it comes a gain

usually over time so if you're exchanging an in theory you [Insurance policies exchanging]

could be realizing a gain that's taxable so if one policy fit your feet from age

25 to 45 and then it tripled in value over that time well you'd have

"realized a gain" if you sold it for cash and then use that cash to buy

another and you'd have a whole lot less cash left over after the feds you know

taxed you and being able to deploy that 1035 exchange tax loophole well you get

to keep all the value in that policy and use it to buy all the value of another

policy thank you insurance industry lobby and yeah you'll be dead but well [Richie Richpants gravestone]

others will too