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Deferred Annuities: Future Purchase
Deferred Annuities: Future Purchase
Nancy Gates avatar
Written by Nancy Gates
Updated over a week ago

When you add a future annuity purchase, the Planner will reduce the source account and create an income stream.

Follow these steps:

STEP 1: Head to My Plan > Income > Annuity

STEP 2: Press Add an Annuity

STEP 3: When asked "Have you purchased this annuity yet?" Select "No."

STEP 4: Enter the amount to invest, purchase age, income start age, survivor and COLA

NOTE: The Planner has its own annuity calculator, which is updated monthly based upon current bond rates. If your annuity is based upon a different rate, you may wish to enter the income as a pension. Because account balances are shared across scenarios you will need to use a workaround to model this. We recommend the following steps:

STEP 1: Reduce the IRA by the amount of the annuity by entering a Disbursement in My Plan > Expenses and Healthcare > Disbursements and selecting "Deductible" for the disbursement in order to avoid any income tax modeling

STEP 2: Add the annuity in My Plan > Income > Pension

When an annuity is purchased from a traditional IRA, the payment from the annuity is considered to satisfy the RMD from the individual retirement annuity each year. That is, you don’t have to worry about calculating an RMD amount which might be different from the payment from the annuity. The payment satisfies the RMD by definition.

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