How Do Pension Annuities Work?
61667 POINTSview profileSteve SavantSyndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale ArizonaAssuming the interpretation of the question is correct, qualified retirement plans can purchase a variety of financial products and tax deferred annuities is an option. If a qualified pan purchase a tax deferred annuity, the basis is taxable because the basis or original contributions were deducted under the defined contribution plan.Answered on July 28, 2013flag this answer
37376 POINTSview profileDavid G. Pipes, CLU®, RICP®Business Development Officer, T.D. McNeil Insurance Services, Fresno, CaliforniaA pension annuity is probably better known as in immediate annuity. This is a contract offered by a life insurance company that provides a lifetime of guaranteed income in exchange for a single deposit. These transactions are usually handled as a “roll-over.” In such a case the insurance company will coordinate the transfer of funds from the existing accumulation plan (401(K) for example, to the annuity. This does not affect taxation, but a CPA is a better source of tax information.Answered on July 10, 2014flag this answer
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