IRA annuities

Q:

How do I show Annuities within a regular IRA ?

I also do have other, non Annuity IRA investments.

 

IRA Annuities providing a Monthly income check: Six of the Annuities in my IRA are some variation of fixed index or variable annuities, growing (usually slowly if at all) and sending me a check each month. Basically the guaranteed monthly payout is about 5% of the principle- so the basic value of the annuity payout is a little less than the annual growth rate.  Thus there is a chance the principle could disappear, however my guaranteed payments would still (I believe) continue till I pass away.  

 

To put that in perspective: I am 70, retired, bought all the eight Annuities in my IRA about 5 years ago, and expect to live till at least 85.

 

IRA Annuities without a monthly check: The other two Annuities in my IRA are: 1 is variable; the other is indexed. These are usually very slow growing, that do not send me a monthly check.  Thus the only way I can get any $ out before I die is to take a withdrawal of principle once a year (approx 5% max without penalty). 

 

Other question: 

When I use the separate worksheets (Investments, Cash Infusion, Special Expenses) do they add to or replace any of the values/ input on the main input screens below the Retirement Income Graph labeled: 1 (personnel information, investments & social security); and 2 (Other Assumptions)?

 

A:

The IRA Annuities that are annuitized into monthly checks…

• I would REMOVE the balances from your investments either by reducing your IRA balance or entering a Special Expense for the premium
• I would then enter a Cash Infusion for the monthly checks.  You can either use 6 lines one for each annuity or ONE line and add up all 6.  For the tax rate you will need to deduct ordinary income taxes I am assuming.

For the annuities that are Not annuitized…

• just leave them in the IRA as Qualified and let the software tap them as needed
• the reality is you will be limited by the 5% cap but I’m assuming you have other investments and that over the long term this estimate will still be sufficient

When I use the separate worksheets (Investments, Cash Infusion, Special Expenses) do they add to or replace any of the values/ input on the main input screens below the Retirement Income Graph labeled: 1 (personnel information, investments & social security); and 2 (Other Assumptions)?

• Investments will REPLACE balances and returns on the main screen so Add to Plan overwrites ALL values for those text fields
• Cash Infusions and Expenses just ADD TO the plan in a transparent way… you will only see the “effects” on the graphs and values in spreadsheets.   Special Expenses for example “adds to” Retirement Income goal + inflation rate.