Annuity Immediate Quote

Lately, I’ve been thinking much about an early retirement. Have worked over 20 years in the same company. Plus, always good to prepare as I’ve seen friends and family get an early retirement forced upon them. I was thinking about using an immediate annuity (along with a pension) for a guarenteed income stream. However, since a regular income wouldn’t keep up with inflation, I’d definitely still want to have money invested in mutual funds too.

Let’s say the annuity plus penison brings in about $50,000 a year, with about $400,000 left in other investments and a Roth IRA about $50,000. Also, no mortage in home, no dependents to provide for. With $50,000, some of that can still be used to continue investing in mutual funds even in retirement. Thus, if a bear market comes along, it’s comforting to know there is a steady income stream.

Would that combination of annuity and mutual funds be the best of both worlds for a stress free early retirement?

I am doing my taxes and have not received the 1099 but have a distribution receipt. It does not havethe fed id number needed for taxes, anyone have it or know where I can look it up?
It’s not like a soc sec number the number is printed on anyone that has a annuity or retirement plan and gets a 1099 in the mail. It may even be on a pay stub if you work there.

A change in the federal tax code has left a wake of confusion among retirees aged 70 and ½ who must make annual withdrawals from their IRAs, 401K, or similar plans. The change was meant to help retired persons whose life savings sustained a hit from the precipitous decline of the stock markets.

It is not uncommon for retirement savings maintained in 401K, IRA or other qualified plans to have lost 40% or more. For many people, this means that retirement planning falls far short of expectations they had when the plans were initiated.

With the precipitous decline in mutual fund stocks, one million dollars previously saved for retirement could have shrunk to $600,000 or less. For those less fortunate or less savings minded, a $100,000 dollar IRA retirement account invested in a mutual fund might have shrunk to $60,000 or $70,000 dollars. In the latter case, a person withdrawing an annual amount of $10,000 would deplete all savings within six or seven years, as opposed to ten years.

The Wall Street Journal reported February 17 that the Dow Jones Industrial Average fell to within 65 points of its November 2008 lows. At those levels of fund performance, retirees are right to worry that their nest eggs won’t provide the anticipated retirement income.

As the result of the steep decline in retirement savings, the Internal Revenue Service granted an exemption from required IRA withdrawals in 2009. The presumption is that mutual and index funds will bounce back and extend the length of time that retirees might have to continue receiving periodic payments from their retirement plans. The owners of retirement accounts have the option of returning part or all of those disbursements, and they may direct the custodian to send another smaller periodic payment in lieu of the original amount. Mandatory withdrawals apply only to those who have attained the age of 70 and ½.

For many retirees, existing plan withdrawal rates mean that, in 2009, they have already received more from their retirement accounts than a more prudent withdrawal plan would dictate. The IRS solution allows re-deposit of disbursements without penalty within a 60 day period.

However, a problem has arisen among some custodians of such funds who have been blindsided by the new legislation and are unsure how to proceed. Many fund administrators report that they have not received enough guidance from the Internal Revenue Service.

Insurance companies responsible for annuity payments are also perplexed. Some insurance companies who pay out annuities are struggling under the weight of telephone calls from anxious clients, some of whom have become only recently aware of the rule change. While some fiduciary custodians have informed their clients of the changes and sent out letters providing guidance, others have not been as responsive to customer needs as they might be.

In spite of any confusion or lack of readiness for the changes, retirees should focus upon the certainties. The new law applies to almost all defined-contribution employer plans, including inherited, traditional, and Roth IRAs.

Retirees should be mindful of the “60-day rule.” If the retiree wants to take advantage of the law change and revert all or part of the withdrawals back to their account, they can simply write a check to the custodian of the funds in the amount which was disbursed. The retiree is allowed to do this just once in a twelve-month period for each account from which payments are received. Miss the deadline and the taxpayer is liable for income taxes due on the traditional IRA disbursements.

Workplace 401K plan custodians are often hesitant to make changes because of documentation already submitted to the government. In such cases, plan custodians fear that they may be found in violation of existing rules. The retiree should put their withdrawal requests in writing, keep copies of it, and send their requests to the account custodians. Without the retiree’s directive, custodians are pretty much free to do whatever they want in disbursement of the funds.

The new law is set to expire at the end of 2009, so it is important to consider 2010 when contacting the plan custodian. Must the retiree put into writing their requests for 2010 withdrawal amounts? That’s something to inquire of the plan custodian, too. Even so, some retirees may be frustrated enough to convert their conventional IRAs into Roth IRAs, a legitimate maneuver which will require the payment of federal income taxes based on the rollover amount. The advantage of rolling the funds into a Roth IRA, of course, is that future disbursements will no longer be taxable, nor would there be required distributions from the retirement account.

Or if instead of buying a house, I want to buy a retirement annuity, would I have to pay tax on the sum of the 403b and then pay tax each year on the money from the annuity?

Annuities are simply an agreement between an individual and an insurance company, and they are comparable to a contract. Discover how annuities can explain what monies an individual is getting with…

I receive monthly income (small amount) from a retirement annuity. At the beginning of last year, I moved from the west coast to the east coast. Several months into the year, I changed my address with the annuity company.
Now, they sent me two 1099-R forms for 2008……. one showing a portion of the income reflecting CA as the state, and the other 1099-R form shows the balance of the income reflecting NC as the state.
Do I have to file a state return in both states because of this? I actually was in NC in 2008……. I just didn’t put through a change of address right away.

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Melinda’s retirement party at Abigail’s in Simsbury.

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Feel free to contact Dave for a free consultation and free information about annuities by going to http://www.kansascitysenior…, email at dave@kansascityseniorsadvisor. com., or call me at (816) …

Melinda’s retirement party at Abigail’s in Simsbury.

Melinda’s retirement party at Abigail’s in Simsbury.

A friend of mine said that my investment “adviser” will make a KILLING on an annuity if I open one up; plus, I have to be in this annuity for something like 8-10 years before (decreased fees or something??) occurs. I’ll be transferring around $260k from another brokerage house to my “adviser.”
This same friend thinks I need to stick with mutual funds… when you compare the two investment vehicles, their difference in total return over the last 12-15 years isn’t that much difference (but that there were tax benefits or something with one or the other).
Any help?