Annuity Income

Harv123 — Wed, 26 Jul 2023 22:45:19 GMT

I have a fixed annuity that has increased in value over many years. I have not yet begun to take any withdrawals. As I approach 70 years old, I realize that I may not need this money and I can leave it to my beneficiary, wife and someday our two children will inherit. My annuity rep. explained that I may withdraw 5% penalty free each year. He explained that some annuity products allow 10% penalty free per year. He explained that I am not required to take RMD's from this non-qualified annuity when I turn 73. The annuity rep. said any money distributed will be considered income and will increase my AGI and possibly raise future medicare premiums due to the $194,000 current IRMAA bracket .

Or alternatively, I may decide to annuitize. The reps said that the balance would stop earning the current fixed 5% interest and that I must choose how I want to annuitize i.e. years certain, my single life only, or survivor's life + children, options. As a Turbo Tax advisor, which is the most advantageous choice to reduce my taxes over the next 25 years? Should I annuitize or not? Should I plan to withdraw small amounts annually 5%-10%? Or should I continue to delay all withdrawals, in which case beneficiaries will pay future taxes?

Re: Annuity Income

KarenL4 — Wed, 26 Jul 2023 22:54:50 GMT

Hi, Harv123,

Thank you for reaching out. Unfortunately, this is not a question that is best answered in this forum. To responsibly address this your advisor should know a LOT more about you than can be covered in this forum.

You may wish to consult a financial advisor who can responsibly learn much more about your situation and future needs and advise you. While not recommending any institution, you may wish to learn more about how to choose a financial advisor from the Certified Financial Planner Board of Standards. Here is a link to that site. It can also be helpful to speak with other folks who are using financial planners. Please do your own research before picking any paid consultants.

Please cheer by clicking the thumb icon in a post, and if this answers your question, select “Mark as best answer.”

Best,

Karen

topic Annuity Income in Retirement tax questions

Annuity Income

Re: Annuity Income