.At 81 years of age, My annuity investment of $35,000 ADDS UP TO $77000. after any years. I would like to with draw the total. What would be my tax cost in Oklahoma?
Terry Says: You will have to consult your tax advisor on that. The money will be added to your other income and taxed accordingly. BUT this is probably a bad idea for many reasons, and you should think it through before acting!
First, you need to know whether you really can withdraw the entire amount — one whether this is just a “withdrawal base” from which you can take income.
Second, you might need this money later in life. You should ask how much you could get in a monthly lifetime check (or a check covering the lives of yourself and your spouse. That way you can never “runout.”. Of course if you have a terminal illness, I could see why you want the money now instead of annuitizing (taking the check a month for life).
An alternative is to simply start withdrawing smaller amounts as needed, paying taxes as you withdraw. The rest of the money should continue to grow tax-deferred depending on the rules of the contract.
For specific advice re the terms of your annuity, contact my expert whose email is Jeffrey.Oster@Raymond.James.com.
And there’s one more thing to consider: taking a huge lump sum might increase your monthly Medicare premium, or disqualify you from other income-based benefits. So think carefully and get some tax and benefits advice before taking this step