I can draw out 10 percent of the annuity yearly or 20 percent for the first time on a withdrawal. I don’t need the money but I am 67 with health issues and would like to put money from the annuity into an investment that is somewhat safe. By doing this I know that I will have to pay a sizzible amount for taxes instead of leaving it alone and my children and grandchildren having to pay a lot in taxes through inheritance. I am talking in the amount of about 8 hundred thousand. Thank u Rick

Terry Says:  OK, you have left out a LOT of details that would be required to give you a good answer.  I ran this by my annuity expert Jeffrey.Oster@RaymondJames. (That’s his email and you can contact him directly with specifics.)  But for others who might have similar situations, here are some of the issues:

  1.  Is this annuity inside an IRA?    If so, you can name grandchildren and children as beneficiaries, and they will be able to “stretch out” withdrawals over their lifetimes.  Thus, they would not owe big taxes at your death.
  2. Is there a guaranteed death benefit with this annuity?  If so, is it larger than the current balance?  Or if it is lower than the current balance, is the death benefit the maximum your heirs can get??  You need to find out!
  3. I’m assuming you do not have a spouse?  That could impact your total estate plan.

So feel free to contact Jeffrey to go over the specifics of your policy.  That will determine the possibilities.  And that should coordinate with your total estate plan, since an annuity of that size might indicate a taxable estate of over $5.35 million!  But taking the money out and paying taxes now, is the least appealing choice — IF you don’t need the money!

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