Annuity in 72T
L1: Annuity in 72TOK, I have studied this site and am much apreciatitive of the information. Thought I had it all figured out but…….
I took my first monthly distribution on 10/29/2010. Since then another on 11/14/2010. next one scheduled for 12/7/2010.
Problem: I want to buy an annuity in the account. Since the annuity will be held by an insurance company in another IRA this would be a parcial transfer.
My thoughts on a solution: Must Ipay back the distributions within 60 days to end the 72T with no penalty. I then purchase the annuity in a new IRA and begin a new 72T with both accounts included.
If so I will not be able to use the 2.62% rate and will have to use 2.33%.2010-11-17 23:46, By: Pockets, IP: [126.96.36.199]
L2: Annuity in 72TSince you have taken two distributions, the rollover solution is off the table. You can only roll one distribution over per IRA account in a 12 month period. Suggestions:
1) Forget the annuity. Why do you want an annuity in your IRA as opposed to more traditional investments? The feesfor many annuities are high, and you must have access to funds for your distributions without surrender charges. I understand that this annuity may allow such limited withdrawals without surrender, but you need to be sure.It sounds like theannuity idea surfacedafter you already had set up the plan, which raises concernsover whetherall facets of the plan were considered in advance? OR
2) To avoid a partial transfer, do a TOTAL transfer. In other words, transfer your total balance in the current IRA to the insurance company IRA annuity account.
I lean toward #1 because an annuity comes with additional constraints vrs a standard brokerage account IRA, and a SEPP plan already has enough constraints to deal with.
2010-11-18 00:26, By: Alan S., IP: [188.8.131.52]
L3: Annuity in 72TPockets… 100% agreement with Alan.
Unless you have a very specific reason to purchase an annuity, it decreases your options. Do you have a specific reason?2010-11-18 01:07, By: Gfw, IP: [184.108.40.206]
L4: Annuity in 72TThanks for your responses.
My holdings consist of FHLMCand FNMA inverse floating CMOs. Yeilds currently capped at between 8 and 50% which is what I am receiving now. Killing it right now. The floor yeild on all is 0%. As you know if/when yields increase, I will be holding 30 year bonds at 0% until paid. The annuity is to provide cash flow during that period to prevent the need to sell the bonds for 60, 50, or 40% of par value and liquidity to allow me to purchase at those discounted levels for the next ride up.2010-11-18 02:19, By: Pockets, IP: [220.127.116.11]