My annuity date is coming and my options are coming. Puzzling why my surrender value is more than the annuitization value. Usually you would think that your money stretched out over time will get you more and the tax bite will be less, but not in my case. Never go with TransAmerica. Those fucks! Can anyone explain?
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My annuity date is coming and my options are coming. Puzzling why my surrender value is more than the annuitization value. Usually you would think that your money stretched out over time will get you more and the tax bite will be less, but not in my case. Never go with TransAmerica. Those fucks! Can anyone explain?
I suppose it depends on what the underlying performance of the fund is. The face value of the annuity is semi-fixed, meaning it is set and you sort of know what it is long term.
If your annuity was invested in a quasi S&P investment, then your performance of the investment side of the contract might have exceeded projections and the surrender value is higher.
My father in-law just popped out of his S&P annuity because it had gone up so much with the market that he took those gains and moved it into a traditional IRA..self directed.
So more info is needed to answer the question.
I suppose it depends on what the underlying performance of the fund is. The face value of the annuity is semi-fixed, meaning it is set and you sort of know what it is long term.
If your annuity was invested in a quasi S&P investment, then your performance of the investment side of the contract might have exceeded projections and the surrender value is higher.
My father in-law just popped out of his S&P annuity because it had gone up so much with the market that he took those gains and moved it into a traditional IRA..self directed.
It was a deferred tax annuity, pre-tax money went in and earned a set interest rate. My financial planner has advised me to roll it over to an IRA and I can get my money out with out paying a huge tax bite should I surrender it lump sum. He says by doing this I will be able to recoup most of the surrender value. My CPA also said this is a good idea if the roll over is allowed. Will find out tomorrow as I am meeting with my planner tomorrow morning. Thankfully I did not send in the surrender value forms or my taxable income would have rocketed to like 140 K and the tax bite would be big but my CPA said it would still come out ahead of the annuitized value. I installed a photo voltaic system so I do get a35% federal tax credit and 30% state tax credit so kinda why my CPA said go ahead and take the lump sum distribution.
It was a deferred tax annuity, pre-tax money went in and earned a set interest rate. My financial planner has advised me to roll it over to an IRA and I can get my money out with out paying a huge tax bite should I surrender it lump sum. He says by doing this I will be able to recoup most of the surrender value. My CPA also said this is a good idea if the roll over is allowed. Will find out tomorrow as I am meeting with my planner tomorrow morning. Thankfully I did not send in the surrender value forms or my taxable income would have rocketed to like 140 K and the tax bite would be big but my CPA said it would still come out ahead of the annuitized value. I installed a photo voltaic system so I do get a35% federal tax credit and 30% state tax credit so kinda why my CPA said go ahead and take the lump sum distribution.
If you were getting a set int rate, even if it was that simple then the value of the fund would be higher for these reasons..
Say 8-10 yrs ago you locked in a fixed rate annuity that yielded 8% guaranteed..and lets say back then it was par for average rates..(these are just round numbers)
Back then that would mean you are getting market rates and it is worth current market..so in bond terms that would mean that asset is worth 100 (100 being par)..
Well fast forward to today and the low rate environment, people chase yield because there isnt any to be had..now your fixed rate 8% annuity is worth MORE than par because your rate is awesome relative to ZERO which is the case now.
So the value of your annuity fund has appreciated even if it was just a simple fixed rate instrument.
Hope that helps..
If you were getting a set int rate, even if it was that simple then the value of the fund would be higher for these reasons..
Say 8-10 yrs ago you locked in a fixed rate annuity that yielded 8% guaranteed..and lets say back then it was par for average rates..(these are just round numbers)
Back then that would mean you are getting market rates and it is worth current market..so in bond terms that would mean that asset is worth 100 (100 being par)..
Well fast forward to today and the low rate environment, people chase yield because there isnt any to be had..now your fixed rate 8% annuity is worth MORE than par because your rate is awesome relative to ZERO which is the case now.
So the value of your annuity fund has appreciated even if it was just a simple fixed rate instrument.
I got the 60 day roll over as the direct roll over was not allowed. At least I do not pay any taxes till I decide how I want the money. My bank says I pretty much get the entire lump sum value as opposed to the annuity value which is good. So now it will be in an IRA and I can decide to annuitize or withdraw as I want and be taxed accordingly. Now I have another variable annuity fund from Nationwide to ponder. I think I will probably do another rollover as this one has lots more value but it has had it's ups and downs due to the economy and stock market gyrations of 911 and the 2007 melt down and the Great Recession .
I got the 60 day roll over as the direct roll over was not allowed. At least I do not pay any taxes till I decide how I want the money. My bank says I pretty much get the entire lump sum value as opposed to the annuity value which is good. So now it will be in an IRA and I can decide to annuitize or withdraw as I want and be taxed accordingly. Now I have another variable annuity fund from Nationwide to ponder. I think I will probably do another rollover as this one has lots more value but it has had it's ups and downs due to the economy and stock market gyrations of 911 and the 2007 melt down and the Great Recession .
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