Pension Release: What Annuity

by Pension Release by Pension Forecast

John asks…

What form can you claim charges for withdrawal of money from an annuity?

Pension Release by Pension Forecast answers:

USA answer, surrender charges are NOT deductible.

Carol asks…

what happens to the money in an annuity if a person dies before they retire?

Pension Release by Pension Forecast answers:

It goes to the person that was chosen as a beneficiary when the policy started if it is an individual policy. A person usually names their spouse as sole beneficiary, and all of their children as contingent beneficiaries receiving equal distributions.

Michael asks…

What happens to the principal of an annuity when you die?

Pension Release by Pension Forecast answers:

No idea………………..

Nancy asks…

I am 60 yrs old, can I withdraw from my annuity and still continue working? What’s my tax situation?

Pension Release by Pension Forecast answers:

You will pay tax at ordinary rates on the annuity withdrawal and wages.

Sandra asks…

what’s the difference between annuity and perpetuity?

Pension Release by Pension Forecast answers:

A perpetuity is a type of annuity.

Normally, an annuity pays something back each year and then returns your principal at the end of a number of years. A perpetuity gives you a payment each year forever and never gives you your money back. The converge in present value at the length of the annuity increases because, let’s face it, getting your principal back in 99 years is pretty close to not getting it back at all. If you don’t believe me, play with the present value function in excel.

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