401k Rollover to Annuity

What should you do with the money you have in your 401K? When you change jobs or decide to retire, you have several options. If you don’t want to leave it there and you don’t want to take a taxable distribution, you should do what most people do – roll it over into another tax-deferred retirement plan.

For people who are young and not planning to retire for a long time, it is usually best to do a rollover into an IRA or transfer it into your new employer’s 401K plan. If you are retiring, you may want to set up an IRA annuity rollover.

Expert Tips on 401k Rollover to Annuity

Under IRS annuity rollover rules, you can rollover a qualified retirement plan into an annuity without incurring any tax liability for the transfer. A qualified retirement plan (401K is one type) is one that is paid for with pre-tax dollars. As long as you purchase an annuity that provides payments for life, and not one that provides payments for a period certain, there are no tax issues.

Advantages of an IRA annuity rollover

  • Taxes continue to be deferred until you start to take withdrawals
  • You can transfer some or all of your 401K rollover to annuity
  • You are guaranteed a stream of income for life
  • You have flexibility in what type of annuity you want to use for retirement

Doing an IRA annuity rollover is a fairly simple process. You contact your HR department and they may ask you to complete some forms. Then, they may either issue you a check or directly transfer your funds to the insurance company who sets up your new IRA annuity account.

Our annuity experts will be more than happy to sit down with you and discuss the differences between choosing a CD-type deferred annuity, an equity index annuity, or an immediate income annuity. When you are looking for a very safe way to provide guaranteed income for life, no other financial product can match an annuity.

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