Yes, she could purchase 10 year certain annuities as MYGAs come out of surrender charge. She should check into annuitizing with the current MYGA carrier, and also check a site like immediateannuities.com for third party SPIA quotes.My SO had a fixed indexed annuity out of the penalty phase and wanted to earn a better interest rate than the 2.5% rate it had earned over the last 10 years. She did a 1035 exchange into a Multi Year Guaranteed Annuity ladder for 3-5 years at roughly 5.85%. This is a taxable (non deferred) account that will shelter the money from taxes for the length of the annuity. She will not need lifetime income as her current guaranteed income floor is more than sufficient to cover expenses. Reducing the taxes and possible IIRMA penalty is the goal at this time. I’m thinking a 10 year immediate annuity may be the best solution to spread out the tax hit on each annuity as it matures. Is there another way to handle this that I am missing? SO is 64 at this time and MYGA funds are about 25% of her net worth.
She could also just continue deferring the interest within a MYGA or other low cost annuity. That will defer, but not avoid, the income taxes either she or her heirs will pay upon withdrawal. But it will completely avoid IRMAA surcharges.
Finally, depending on her other income, she could structure her withdrawals and maturities so she has one large amount of income in a certain year - say 2030. If she did that, she’d have a high income tax in one year (2030), and a one time high IRMAA two years later (2032), but thats it.
You might also factor in when she needs to start taking RMDs from her tax deferred accounts.
Lots of moving parts here!
Statistics: Posted by Stinky — Mon Jun 24, 2024 6:06 am — Replies 1 — Views 118