The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing


Subject:  Re: annuity in an IRA Date:  1/11/2000  4:14 PM
Author:  TMFPixy Number:  17657 of 88825

Greetings, CalicoCat, and welcome. You asked:

<<Maybe this should be posted on the Foolish question board, but...
In the '80s, I opened an IRA with an annuity from Kemper an agent sold me. I transferred this to a 3 variable annuity funds from Fidelity a few years ago, to get a better return, at least. Not too savvy, then, and not much now but getting better reading the Fool. My question: how do I go about trasferring these annuities, equal to a little over $10,000, into another vehicle in the IRA? I understand now that an annuity in an IRA is redundant, in terms of tax shelter, but I'd like to improve my returns with less expenses.>>

The annuity is inside an IRA. Therefore, you may surrender it and transfer the net sum after possible surrender fees to any IRA of your choosing. You may instruct the issuer in writing to liquidate the account so you may roll the proceeds to another IRA. Request they withhold nothing for income taxes because the proceeds will be placed in a new IRA, and have the check sent to you. On receipt, get the check into the new IRA within 60 days. Alternatively, you may request a direct transfer of the proceeds to the new IRA. The new IRA provider will have a form you may complete for that purpose. The latter is a better procedure in that it ensures nothing will be withheld by the current custodian for taxes. Some providers insist on doing that when a check is sent to you, and that means you would have to come up with the money withheld to ensure a complete rollover and no problems at tax time. A direct transfer avoids that situation.

Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us