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Fixed Period Immediate Income Annuity & 72t

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ByPeriodCertain

L1: Fixed Period Immediate Income Annuity & 72tI”m age 55 & retired. With one of my IRA”s I want to purchase a 7 year fixed period annuity. Are fixed period income annuities allowed the exception from the 10% penalty?2008-01-18 13:17, By: PeriodCertain, IP: [98.193.103.0]
L2: Fixed Period Immediate Income Annuity & 72tSorry, but no. If you purchase an annuity payable for life you are probably ok. Anything less will cost you the 10% penalty.2008-01-18 13:31, By: Gfw, IP: [74.136.102.241]

L2: Fixed Period Immediate Income Annuity & 72tActually, this question is in response to Gfw”s reply. How could we turn your “probably” with regard to a lifetime annuity into a definite Yes or No? :)Also, is it possible to invest in an immediate lifetime annuity within an IRA? Not saying this is a good idea, mind you, just wondering if it”s possible (I”m thinking of an application that is not really relevant to the discussion). Cheers,Casey2008-01-19 11:33, By: Casey, IP: [71.111.159.2]

L2: Fixed Period Immediate Income Annuity & 72tIt probably meets the definition since it is a pay out over the life expectancy of the individual. Most insurance companies are using a mortality table similar to the Annuity 20-03 table and most interest rates offered by insurance companies would probably be less than the 120% mid-term rate – it should qualify. Real question is why would anyone want to tie up their funds and lose control of their money for the promise of an income stream – especially with interest rates as low as they are today.
Can an immediate lifetime annuity be used inside an IRA – sure it is done all the time for individuals at retirement. Most insurance companies turn the annuity into an IRA by rider so it pretty much stands on it”s own – no other assets in that IRA account.
Another approach is to use a custodial account which can contain any assets that is qualified to fund an IRA. If this type ofaccountwere used to fund a SEPP, the distribution could be guaranteed by a period certain annuity (payable back to the IRA) with the balance in other investments, but still all part of the SEPP.
After 30 years in theinsurance industry, I”m not a big believer in annuities inside an IRA – most any investor (without too much risk)can beat the results promised by an insurance company.
2008-01-19 12:05, By: Gfw, IP: [74.136.102.241]

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