UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: Mark0Young Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76420  
Subject: Re: Variable Annuity Date: 1/7/2004 9:19 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
I have a variable annuity with Van Guard. I would
like to withdraw money from it and contribute to
my wife's IRA and mine also.


I assume that the VA at Vanguard is an unqualified annuity (not in any retirement account). In that case, if you withdraw everything from the VA, everything in excess of the premiums will be taxed at ordinary income tax rates and, since you are not yet 59.5 years old, 10% federal penalty (plus any state income tax and penalty). If you don't withdraw everything, the ordering rules are such that the first monies out are earnings.

If I recall correctly, Vanguard doesn't have any surrender charges.

Generally, you would be better off finding new monies to fund the IRAs.

The the VA is in a qualified account like a 401(k), 403(b), Traditional IRA, Roth IRA, or the like, then you have to follow the rules of that type of account. Usually, though, the Vanguard representatives will advise against placing a VA inside any tax-favored account.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
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:
Macro Economics

Looking at Currency Ratios
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