Anyone know anything about annuities?

[Double"O"]

long story short when my mother passed away a few months ago i found she had 2 annuities.

What is the best course of action for me to take?

They arent substantial by any means but i dont want to get shafted by the IRS either

Tks gents

 

[9397SVTs]

I have been out of that world for some time now, but I'll try to help.

What type of annuities are they? Fixed interest, equity indexed, or variable? Are they Roth or traditioannuities? When do they annutitize?

What are you wanting to do? Cash them out? Roll them over? Continue them as they are as the new annuitant?

 

[Double"O"]

I have been out of that world for some time now, but I'll try to help.

What type of annuities are they? Fixed interest, equity indexed, or variable? Are they Roth or traditioannuities? When do they annutitize?

What are you wanting to do? Cash them out? Roll them over? Continue them as they are as the new annuitant?

I am not sure about the 2 in question. I would like to cash them out. She had a roth as well, that im rolling over

I havnt had a lot of time between work and getting the estate handled...ad im an only child its been a lot of work

 

[Pribilof]

Start here:
Annuity Beneficiaries - Inheriting an Annuity After Death

And call the annuity companies.

Are the annuities in a retirement account? You may want to consider a stretch option for distributions. Really hard to give you advice without knowing the specifics of the annuity contracts or anything about your personal financial situation.

 

[Double"O"]

Start here:
Annuity Beneficiaries - Inheriting an Annuity After Death

And call the annuity companies.

Are the annuities in a retirement account? You may want to consider a stretch option for distributions. Really hard to give you advice without knowing the specifics of the annuity contracts or anything about your personal financial situation.

My financial situation is fine, i dont need the money.

I guess my question really is do i take installments or the lump some...also what rate will i be taxed at? My current rate or the rate of the sum as an income?

I just wanna cover my ass and and pay as little in taxes as possible. My plan is to get the ball rolling on these this week as i havr a day off from work and can start dealing with this crap

Oh pro tip guys...get as many death certs as ya can...jeez...i got 20 and wish i fot more at 20 bucks a piece

 

[VENOM1]

If your financial situation is stable and/or fine, then why take the funds now? Why not put it into another annuity with a higher PAR and bonus on the funds. Or, in an indexed account so you can’t ever lose money?

 

[MG0h3]

Whatever you take that isn’t Roth gets added onto your income.

So if you’re a higher earner, it might make sense to take it later when you’re on SS or pension.

Possible overall rates could be higher in the future so ya just never know.


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[Double"O"]

If your financial situation is stable and/or fine, then why take the funds now? Why not put it into another annuity with a higher PAR and bonus on the funds. Or, in an indexed account so you can’t ever lose money?

This is why im asking...i dont know if i have to take anything...i really just wanna protect as much as possible

 

[IA Shelby]

Ohio snake is a member on here and a financial advisor as I recall. I would pm him as opposed to letting the rest of us give you advice.

 

[VENOM1]

This is why im asking...i dont know if i have to take anything...i really just wanna protect as much as possible

I own a financial company and would be more than happy to address any questions you may have.

 

[VegasMichael]

@Ohio Snake
This guy knows what's up.

 

[Ohio Snake]

long story short when my mother passed away a few months ago i found she had 2 annuities.

What is the best course of action for me to take?

They arent substantial by any means but i dont want to get shafted by the IRS either

Tks gents

HelloDouble O.

For annuities, it sounds like you are the beneficiary on e few annuity contracts. The question is whether these contracts are qualified (IRA type) or non qualified ( after-tax). In both cases, you may be able to exercise a few options.

Qualified options:

lump sum distribution - entire distribution is taxable
5 year distribution rule- account must emptied within 5 years....I need to check this further since the distribution rules changed recently.
10 year distribution rule- this recently replace the Stretch IRA ruling. This seems to be the best option to control taxation.

Non Qualified option:

Lump sum- the entire GAIN PORTION is taxed at ordinary income tax rate. If there is little gain, this may be fine to exercise.

Stretch Non Qualified annuity- must stay inside an annuity to exercise and the carrier must offer this option or find a carrier who who accepts this transfer type. The goal is to take distribution based on your life expectancy each year to control taxation with the option to take more if needed. This will be the best option if there are large gains on the contract.

If either contract is annuitized, the contract stipulates the annuitization type used and distribution will be specified.

Feel free to PM me with additional info on your contracts then I can tell you the best strategy to use.


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[MG0h3]

HelloDouble O.

For annuities, it sounds like you are the beneficiary on e few annuity contracts. The question is whether these contracts are qualified (IRA type) or non qualified ( after-tax). in both you may be ablto exercise a few options.

Qualified options:

lump sum distribution - entire distribution is taxable
5 year distribution rule- account must emptied within 5 years....I need to check this further since the distribution rules changed recently.
10 year distribution rule- this recently replace the Stretch IRA ruling. This seems to be the best option to control taxation.

Non Qualified

Lump sum- the entire GAIN PORTION is taxed at ordinary income tax rate. If there is little gain, this may be fine to exercise.

Stretch Non Qualified annuity- must stay inside an annuity to exercise and the carrier must offer this option or find a carrier who who accepts this transfer type. The goal is to take distribution based on your life expectancy each year to control taxation with the option to take more if needed. This will be the best option if there are large gains on the contract.

If either contract is annuitized, the contract stipulates the annuitization type used and distribution will be specified.

Feel free to PM me with additional info on your contracts then I can tell you the best strategy to use.


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Are all Roth’s like that; you pay cap gain on the growth? I though that you weren’t taxed on any or it for some reason, but upon further thought, tax man would never allow that.


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[Ohio Snake]

Are all Roth’s like that; you pay cap gain on the growth? I though that you weren’t taxed on any or it for some reason, but upon further thought, tax man would never allow that.


“You’re full of $#!+”
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All Roth death benefits are federal income tax free including the gains. Some states have been known to tax the gain portion.

The stretch will preserve the Roth status for no longer than 10 years under the IRS ruling that replaced the normal stretch.

I have a Roth 401K death benefit Im working on right now and researching the Roth status stretched over 10 years. The questions Im looking at are:

Under the new 10 year stretch rule, are RMD’s required?

Under this same rule, are all distributions from the Roth tax free as a death benefit or are the gains from the time of death taxable. If the later is the case, distribution may be the better option. If all gains remain tax free through 10 years, leave it as a Roth, which does not have to be an annuity.

I’ll let you know tomorrow on these questions Im researching.


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[MG0h3]

All Roth death benefits are federal income tax free including the gains. Some states have been known to tax the gain portion.

The stretch will preserve the Roth status for no longer than 10 years under the IRS ruling that replaced the normal stretch.

I have a Roth 401K death benefit Im working on right now and researching the Roth status stretched over 10 years. The questions Im looking at are:

Under the new 10 year stretch rule, are RMD’s required?

Under this same rule, are all distributions from the Roth tax free as a death benefit or are the gains from the time of death taxable. If the later is the case, distribution may be the better option. If all gains remain tax free through 10 years, leave it as a Roth, which does not have to an annuity.

I’ll let you know tomorrow on these questions Im researching.


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T4.

What about a traditional Roth IRA not involving death?


“You’re full of $#!+”
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[Ohio Snake]

T4.

What about a traditional Roth IRA not involving death?


“You’re full of $#!+”
Joe Biden

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Are you the Roth IRA account owner? If yes, you may take distributions of all contributions ( basis) without tax or penalty and provided it is not a conversion account under 5 years old.

All gain portion should remain in the account to avoid tax and/or penalty until age 59.5 years of age.

The CARES ACT may give some tax relief to those needing to take IRA distributions ( amongst other relief options) until 12/31/2020. This is another topic!

If you are not the owner, pm me so I can understand the issue.

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[MG0h3]

Are you the Roth IRA account owner? If yes, you may take distributions of all contributions ( basis) without tax or penalty and provided it is not a conversion account under 5 years old.

All gain portion should remain in the account to avoid tax and/or penalty until age 59.5 years of age.

The CARES ACT may give some tax relief to those needing to take IRA distributions ( amongst other relief options) until 12/31/2020. This is another topic!

If you are not the owner, pm me so I can understand the issue.

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Ok you answered it.

So GTG after 59.5 on the growth.

Was aware of being able to withdraw contributions.

Thank you!


“You’re full of $#!+”
Joe Biden

svtperformance.com mobile app

 

[Ohio Snake]

A few things to keep in mind on distributions from qualified accounts (death benefit, hardship, 401K loans, etc.)

Recent tax law changes affecting distributions on qualified accounts for death and required minimum distributions (RMD) have changed.....new tax regulations under Trump.

The CARES ACT, currently active, is partly designed to give some tax relief to those affected by COVID 19 and needing distributions from certain accounts. The ACT has been fluid and subject to amending by years end. This is not a tax regulation, but an ACT which is set to expire 12/31/2020.

Everyone’s situation is different.


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[Ohio Snake]

Ok you answered it.

So GTG after 59.5 on the growth.

Was aware of being able to withdraw contributions.

Thank you!


“You’re full of $#!+”
Joe Biden

svtperformance.com mobile app

BTW- Unlike traditional IRA’s, Roth IRA’ s are NOT subject required minimum distribution (RMD) which is now set at age 72 ( was 70.5). Its perfectly fine to keep the Roth IRA as long as you want.

Roth 401k’s ARE subject to RMD distribution. When the time is right, transferring your Roth 401K to a Roth IRA will eliminate the RMD for those not needing to take distributions.

Just an FYI.


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[MG0h3]

BTW- Unlike traditional IRA’s, Roth IRA’ s are NOT subject required minimum distribution (RMD) which is now set at age 72 ( was 70.5). Its perfectly fine to keep the Roth IRA as long as you want.

Roth 401k’s ARE subject to RMD distribution. When the time is right, transferring your Roth 401K to a Roth IRA will eliminate the RMD for those not needing to take distributions.

Just an FYI.


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I’ll def be grabbing every cent I can out of them , while trying to keep taxes at bay, as soon as eligible.

My Roth is traditional though.


“You’re full of $#!+”
Joe Biden

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