If you have an IRA or 401(k) plan for retirement, you may be wondering if you can buy an annuity with those saved funds. We’re here to tell you that is absolutely possible, and that you do have the ability to move your IRA or 401(k) — completely tax-free.
You’ll be happy to hear this part: You won’t be hit with any distribution taxes when you transfer retirement savings from an IRA or 401(k) into an annuity. When it comes down to it, you can transfer the following retirement savings plans to an annuity tax-free:
If you decide to roll over funds into an annuity from an IRA or 401(k), this is considered a “qualified” plan, which essentially allows an insurance company to create an “IRA annuity” for you. From this point, you can deposit any of your retirement funds directly into this IRA annuity.
Worst case scenario, don’t be afraid to talk to your Human Resources Department when it comes to transferring funds from a 401(k). You can also work with one of our financial planners, as we’ve worked with several individuals regarding their IRA or 401(k) plans, and we can work together to determine a strategy that works best for you, so you can have a safe and sound annuity for retirement.