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Author: eyeball390 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75838  
Subject: Anunity Date: 1/11/2000 2:04 AM
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If i withdraw my annunity before 59 1/2 can this be rolled into an Ira without paying the 10% penailty or income tax?
Thanks
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Author: TTRoberts Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17643 of 75838
Subject: Re: Anunity Date: 1/11/2000 11:03 AM
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eyeball390, you asked:

<< If i withdraw my annunity before 59 1/2 can this be rolled into an Ira without paying the 10% penailty or income tax? >>

No, you can not "withdraw" an annuity and "roll" it over into an IRA without being taxed. . . . . . unless the annuity is already in an IRA.



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Author: gtstarling Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17673 of 75838
Subject: Re: Anunity Date: 1/11/2000 11:27 PM
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eyeball390, you asked:

If i withdraw my annunity before 59 1/2 can this be rolled into an Ira without paying the 10% penailty or income tax?


TTRoberts replied that you can only do this if it is already in an IRA.

This can also be done if the annuity is in some other tax sheltered plan. Many 403(b) plans and some 401(k) plans use annuities. If you have left the job where those plans originated, they can be put into an IRA as well. However, you may have to pay a withdrawal penalty to the holder of the annuity contract.

Annuities are somewhat like Brier Rabbit's Tar Baby - easy to get hold of, but hard to turn loose!

Good Luck.

Gemstarman


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Author: TheBadger Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17713 of 75838
Subject: Re: Anunity Date: 1/12/2000 2:19 PM
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If i withdraw my annunity before 59 1/2 can this be rolled into an Ira without paying the 10% penailty or income tax?


On the presumption that you are referring to regular after-tax annuity; it is not rollable into an IRA; therefore you will, at a minimum, owe regular income tax on the amount distributed less your basis in the contract.

However, you can avoid the 10% early withdrawal surtax through implimentation of IRC §72(q)(2)(D) SEPP's. §72(q) does not get discussed much; however, the rules for §72(q) are essentially the same as those for §72(t), its companion code section for 401(k)'s & IRA's. I suggest that you stroll over to the Retire Early Homepage & start reading the posts on §72(t) get some background information.

TheBadger


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