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  • Previous Employer Sponsored Annuity

    Husband has a Tax Deferred Annuity Retirement Plan that was funded by previous employer.  He wasn't there long so it is small, ~$8,000.

    I am trying to clean up the number of accounts to make management of the portfolio easier.  Does he have any options to move this money out of this account?  I have read a few articles but I have gotten confused since we really do not have much information on this account (not sure if it is variable or what).  I know that annunities are not recommended, so I am not up to speed on them.  The article below states that we may be able to roll over into a traditional IRA, but then we would be blocked from the backdoor roth?  Or have to roll into tIRA and then pay tax when going to Roth?

    Are we just stuck with this account?  We would even consider donating it if that is an option...  thanks in advance!

     

    https://www.thebalance.com/how-to-surrender-or-exchange-your-variable-annuity-2389026

     

     

     

     

  • #2
    If your annuity is inside a 403b/401k (almost certainly) then, yes, you can r/o to an IRA and convert to a backdoor Roth or you can roll directly (convert) into a Roth IRA. You will pay taxes on the $8k conversion. Just be aware that you may have surrender charges. I would check before moving to make sure you aren't liquidating the annuity just before a surrender charge period is set to expire.
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3
      "Tax-deferred annuity" can be a bit of a misnomer. 403(b) plans are technically labeled as such, but most of the one's I'm familiar with are functionally indistinguishable from qualified plans like a 401(k). For example, it's probably set up so that the holder chooses mutual fund investment options, there are no surrender fees, they're still subject to the same withdrawal rules as 401(k) plans, etc. I know we're programmed to see the word "annuity" and sprint in the opposite direction, but in many cases vis-à-vis 403(b) plans, it's a vestige of an antiquated terminology. Review your plan to make sure of that, though.

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      • #4
        Ok, thank you very much.  I was unaware of the possibility of "annunity" being a misnomer...  Good to know.  He has a 403(b) with the same previous employer.  I will call them and check the plan to see what our options are knowing that it may not be an "actual annunity."  Good news!

         

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        • #5
          Additional options may include rolling it into a current employer or individual 401(k) if it accepts incoming rollovers. Depending on its options, leaving it there may not even be a bad choice.

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          • #6


            And when I say IRA I don’t mean individual retirement annuity which the insurance industry likes to use to confuse people.
            Click to expand...


            yes, I think I need to find out more about what this really is.  I suspect that it is not in an IRA as it is with Mass Mutual, an insurance company....  but I will have to call them to find out.  the paperwork is of course not helpful and more confusing.  I hope that it is an IRA so that we can roll/convert and get rid of an extra account to manage/track.

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