Ronstar
Moderator Emeritus
I have an annuity that has returned approx 3% annually since 2004. It returned 3% in 2014, -.55% in 2015 and -1.18% so far in 2016.
I'm not happy with the return, and I'm in the process of consolidating/streamlining our investments into 2 or 3 sources, so I feel the need to do something with the annuity. We are 60 /61 years old and anticipate living off cash and post tax investments for the next 5-6 years. Then start taking IRA withdrawals and paying the tax from SS income.
I see a few options:
1. I could surrender it now and take the cash, paying tax on $66k gain. Then put the proceeds in my post tax account. But I'm unsure of the affect of this on my 2016 taxes, given that I have some gains I need to account for in 2016.
1a. I could surrender it in 2017 when the tax situation will be much clearer - no anticipated unusual income/cap gains in 2017.
2. I could annuitize the annuity, taking lifetime (or short term?) payments.
3. I could leave it as is.
I'm leaning toward 1a. The surrendered $ would be invested for at least 5-6 years in a post tax account that has a return that should double that of the annuity.
Is there anything else that I'm missing?
I'm not happy with the return, and I'm in the process of consolidating/streamlining our investments into 2 or 3 sources, so I feel the need to do something with the annuity. We are 60 /61 years old and anticipate living off cash and post tax investments for the next 5-6 years. Then start taking IRA withdrawals and paying the tax from SS income.
I see a few options:
1. I could surrender it now and take the cash, paying tax on $66k gain. Then put the proceeds in my post tax account. But I'm unsure of the affect of this on my 2016 taxes, given that I have some gains I need to account for in 2016.
1a. I could surrender it in 2017 when the tax situation will be much clearer - no anticipated unusual income/cap gains in 2017.
2. I could annuitize the annuity, taking lifetime (or short term?) payments.
3. I could leave it as is.
I'm leaning toward 1a. The surrendered $ would be invested for at least 5-6 years in a post tax account that has a return that should double that of the annuity.
Is there anything else that I'm missing?