What is exclusion ratio?
Understand the Problem
The question is asking about the concept of 'exclusion ratio,' which typically refers to a financial or investment term indicating the proportion of total income or returns that excludes certain amounts due to specific criteria or regulations. This term could relate to various fields, including finance or taxation.
Answer
The percentage of an annuity payment that isn't taxed.
The exclusion ratio is the percentage of an annuity payment that isn't taxed, representing the return of your initial investment.
Answer for screen readers
The exclusion ratio is the percentage of an annuity payment that isn't taxed, representing the return of your initial investment.
More Information
The exclusion ratio is used mainly for annuities to optimize tax efficiency by identifying the non-taxable portion of the payouts.
Sources
- The web page with info on - Example Source - investopedia.com
- Annuity Exclusion Ratio: What It Is and How It Works - annuity.org
- What Is the Annuity Exclusion Ratio? - SmartAsset - smartasset.com
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