Profit Sharing Plan/Keogh

[pugmom]

A few years go DH worked as a consultant under his own C-corp. Our accountant had him set up a Profit Sharing Keogh account thru Fidelity. He invested in some stocks and mutual funds over the years, and we basically treated it like any other retirement account.

The other day we received a letter from Fidelity giving us estimates for our profit-sharing plan as if it were an annuity. The entire purpose of the letter appears to be showing us what we would get if we took a payment at 67 (DH is now 66) as a single life annuity or whether we took it as a joint with survivor annuity. There’s no other indication of asking us to do anything but it’s still confusing about why it’s treating it like an annuity. There’s nothing online that shows it as if it were an annuity. My question is; is this something that’s built into the Keogh that we didn’t realize, or is it something that is just telling us what would happen if we did convert it to an annuity next year.

I will call Fidelity on Monday to straighten this out, but wondered if someone here could explain. My best guess is that because a Keogh is a retirement vehicle, the Feds are automatically generating this annuity estimate, but that it is still up to us to decide what to do with the money. We have generally stayed away from annuities, for reasons which will doubtless be familiar to people here...

Thanks!

 

[swakyaby]

When I retired from my employer, I had a self-directed profit sharing plan that I intended to roll over into an IRA, to give me more control over my retirement funds. In my packet of paperwork everyone receives when they leave the company was an annuity schedule. It was nonspecific, didn’t include my actual amount in the schedule. It just seemed placed there to suggest annuitizing my lump sum was an option if I wanted to initiate that. In the end, I chose to continue with my original plan to roll it over into an IRA.

 

[swakyaby]

I think Fidelity wants to know what DH intends to do with his Keogh plan, so yes, he should contact them.

 

[pugmom]

Sorry for the delay... I have been away. I think we figured it out. It is NOT a new account or "found money" :-(
It is essentially something mandated by the government to force Fidelity to give us a "what if" view for retirement planning. So they took the total and showed an example of what it would yield as an annuity.
We will keep it as is.
Thanks for replying!