Defined terms for the annuity market and lifetime income landscape.
Ordinary income treatment is the tax characterization under which the taxable portion of an annuity distribution is taxed at the contract owner's marginal ordinary income tax rates rather than at preferential long-term capital gains rates. Why it matters Ordinary income treatment is the rule that governs how the taxable portion of an annuity distribution is taxed, and it is independent of how those gains were generated inside the contract — whether through fixed interest, index cr
