Annuities

MYGAs, or multi-year guaranteed annuities, are a type of fixed annuity that guarantees a stable interest rate for a set length of time, often three to ten years. MYGAs, like standard fixed annuities, are subject to surrender costs, which are penalties that an annuity holder must pay if he or she withdraws money from an […]

If you have no investment in the contract (also known as “cost” or “basis”) because of any of the following circumstances, the pension or annuity payments you get are completely taxed. For your pension or annuity, you did not contribute anything or are not recognized to have contributed anything. In previous years, you got all […]

When you purchase an annuity, you are pooling your risk with the other people who are also purchasing annuities. The insurance company from which you purchase the annuity manages that risk, and you pay a charge to reduce your risk. You may never make more money from an annuity than you put into it, or […]

After the complete cost of the plan has been recovered, annuity payments you or your survivors receive are normally fully taxable. How do I report a survivor annuity payment? To enter the CSF-1099-R, Statement of Survivor Annuity Paid, go to the Federal Taxes tab, then Wages & Income, then Retirement Plans and Social Security, and […]

While the bulk (but not all) of your Social Security income will almost certainly be taxed, your FERS Supplement will be taxed in full. Is FERS annuity taxable? The taxation of federal retirement benefits is one of the most prevalent misunderstandings I encounter. It’s easy for federal employees to forget that their federal retirement pension […]

While the bulk (but not all) of your Social Security income will almost certainly be taxed, your FERS Supplement will be taxed in full. How much of my FERS annuity is taxable? This means that you’ll have to pay income taxes on the bulk of your federal retirement pension income. Everyone’s contribution will be varied, […]

The IRS requires that qualified variable annuities held in IRAs make required minimum distributions (RMDs). Qualified account owners must begin taking RMDs from their IRAs at the age of 72. Do annuity payments satisfy RMD? Most annuities are “RMD-Friendly,” meaning the annuity provider will waive surrender charges if the RMD amount for the individual annuity […]

A qualifying annuity is one that is funded with money that has never been taxed before. 401(k)s and other tax-deferred retirement accounts, such as IRAs, are commonly used to fund these annuities. Payments from a qualifying annuity are fully taxable as income when you receive them. This is due to the fact that no taxes […]

While a fixed annuity can reduce market risk, there are other factors to consider when evaluating whether or not a fixed annuity is right for you. The “guarantee” of an annuity is only as good as the insurance company that issues it. In the event that an insurance company fails, state guarantees may exist, but […]

Perpetuity is an annuity with an endless life and annual payments that never stop. Perpetuity refers to a bond or instrument that has no specified maturity date. Is an annuity a perpetuity? Annuities are investments that pay out for a predetermined period of time. Perpetuities are investments that pay out for the rest of your […]