Lump sum options are a commonly misunderstood alternative annuity retirement policy. Although it isn’t generally available to the public, many people continue requesting lump sum annuities as they reach retirement age. If it isn’t accessible, why was the lump sum annuity created in the first place? Can you currently opt for a lump sum annuity?Lump sum annuities were created to replace the three-year recovery rule, where retirees weren’t required to pay taxes for up to three years. Ultimately, the recipients received an amount that was equal to any contributions that were previously taxed. The lump sum option enabled retirees to make a withdrawal in an amount equal to past contributions. Although it was wildly popular and easy to get, it began gaining attention from the feds since its origin.Currently, you cannot get a lump sum option. However, there are a few exceptions to the rule. If you are an individual facing a life-threatening condition, you can elect for a lump sum in exchange for an actuarial reduction in annuities. It is important to note, though, that this formula utilizes the same life expectancy formula, regardless of your shortened life expectancy due to illness. As such, this may not be the best option and may not be possible due to specific conditions requiring a case-by-case review.Although much time has passed since the change to lump sum annuities, it hasn’t stopped employees from planning for its use. This is an issue for some because the government hired them at the introduction of lump sum annuities. As such, much of the aging federal workforce has held onto the concept for future use. For many, the lump sum annuity provided hope in paying off various major purchases, mortgages, and loans. However, even with this annuity in the rearview mirror, there are plenty of other options capable of making payoffs a reality.
Contact Information:
Email: [email protected]
Phone: 9143022300
Bio:
My name is Kevin Wirth and I have worked in the financial services industry for many years and I specialize in life insurance and retirement planning for individuals and small business owners, with a specialty in working with Federal Employees. I am also AHIP certified to work with individuals on their Medicare planning. You can contact me by e-mail or phone. I look forward to the opportunity of working with you on these most relevant areas of financial [email protected] 914-302-2300
