UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75828  
Subject: Re: Tax-deferred annuity Date: 10/20/1998 1:00 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Greetings, 2gynkv, and welcome. You asked:

I have a tax-deferred annuity account worth about 2K. I never claimed the principal off my income back in 95 when I opened it.

Can I, and if so, How do I roll-over this account into my Roth IRA? Do I first have to roll it over into a traditional IRA?

Since I never took a deduction for the principal will I still owe tax on the transfer?


You have an annuity purchased with after-tax money. Although the earnings on that annuity are tax-deferred, the annuity itself is not an IRA or a tax-qualified retirement plan. Therefore, it is not eligible for transfer to an IRA under any circumstances. If you surrender it now for its cash value, you will almost certainly pay a surrender fee to the insurance company that sold it to you. Additionally, you must pay taxes on any earnings over an above your cost of that annuity. Your basis (i.e., purchase price) will not be taxed because you've already paid taxes on that amount. Further, if you are under the age of 59 ½, you will pay an additional 10% early withdrawal penalty on all earnings.

Regards….Pixy
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Apple

The Saddest Place on iPhone Day
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement