72t based on a Variable Annuity from AXA
L1: 72t based on a Variable Annuity from AXAHas anyone ever heard of or used a 72t based on investments into a Variable Annuity product from AXA? These are the insurance based products that have a guaranteed return with no loss (other than the fees charged, I assume). Supposedly the funds are qualified (pre-tax) and can be used in the same as any IRA.
Novice here, so looking for any insight…
2017-07-28 15:48, By: Bytor, IP: [188.8.131.52]
L2: 72t based on a Variable Annuity from AXAFULL DISCLOSURE — I do not like annuities.
I have 2 clients who were put into IRA annuities by their brokers. In general, you have to be careful because the cash flow provided by the Annuity may be less than the ANNUAL DISTRIBUTION required from your SEPP 72-T. That affected one of my clients not only from that standpoint, but also because she had low income and would have been benefited from taking $ 10,000 more without being subject to income taxes, but she was not allowed by the annuity.
2017-07-28 17:52, By: dlzallestaxes, IP: [184.108.40.206]
L3: 72t based on a Variable Annuity from AXAA NQ annuity is tax deferred, but is not a qualified plan and 72t does not apply. However, you could use 72q in the same manner as 72t with one of the same 3 approved calculation methods. At the end of the day, you would need a 1099R in which Box 1 was identical to your calculation. Note that taxes on an annuity distribution differ considerably from an IRA distribution, since the investment in the contract would be non taxable when distributed, but in most cases the investment in the contract would not be distributed after all gain was distributed.
While there is also an “immediate annuity” penalty waiver in 72q that waives the penalty without using one of the 3 methods, that would not apply unless you annuitized the contract and did not previously start a 72q plan based on one of the approved calculation methods.
2017-07-28 19:37, By: Alan S, IP: [220.127.116.11]
L4: 72t based on a Variable Annuity from AXASo, is there any advantage to using the funds from a 401k/IRA rolled into a qualified plan (Variable Annuity) and using a 72q over just using a 72t from an IRA? Yes, this was presented as an option to me from one of my advisors and I don’t fully understand how it works yet. The attractiveness was supposed to be the guaranteed return and safety of the principal. I will still be seeking further information from my advisor, but I was not sure if this was even worth pursuing.
Thanks for respondingdlzallestaxesandAlan S.
As usual, more good information…2017-07-28 20:32, By: Bytor, IP: [18.104.22.168]