Do I still pay taxes and take required withdrawals?
Yes. Pre-tax money still gets taxed, and an IRA's required withdrawals still apply.
The fair worry
You may have heard annuities delay taxes. I'd want to know what still comes due.
The answer
Growth is tax deferred, so the tax comes later.
A direct move from a work plan to an IRA generally isn't taxed. Pre-tax money stays pre-tax. Withdrawals count as taxable income.
Required minimum distributions are amounts you must take yearly from pre-tax retirement accounts, starting in your 70s. An annuity in your IRA doesn't change those rules.
The downside
Missing a required withdrawal can mean extra tax. Taking money early may trigger tax penalties and surrender charges.
At your consultation
I can't give tax advice. On your free Zoom consultation, your retirement advisor will put those withdrawals beside YOUR income needs.
More questions on this topic
- Can I change my mind later?You can usually cancel for a full refund within a set window, often 10 days after you get the contract. Later changes depend on its terms.
- What if the insurance company fails?The insurance company backs the guarantee. It depends on that company's ability to pay. Annuities aren't FDIC insured.
- What is an annuity?An annuity is a contract with an insurance company. You put money in for growth, a retirement paycheck, or both.