- Introduction
- What Initiates a Distribution?
- Five Dates You Should Know
- Selecting a Distribution Option
- Deciding on a Payout Option
- Annuity Form of Payout
- Advantages and Disadvantages of Taking an Annuity
- Taking a Lump-Sum Distribution: Know Your Options
- Annuity vs. Managing Your Own Retirement Assets
- Advantages and Disadvantages of a Lump-Sum Distribution
- The Roth IRA–How Does It Fit In?
- Making the Decision: Annuity or Lump-Sum?
- Taxation of Distribution Options
- Rollover into a Traditional IRA
- Advantages and Disadvantages of Rollover to a Traditional IRA
- Annuity Payouts
- Early Distributions
- Should You Defer Your Retirement Plan Distribution as Long as Possible?
- Distributions Following Death
Your company may allow you to receive your qualified retirement plan monies as an annuity, in which a series of payments is made according to a predetermined schedule. If so, you may want to compare your company's annuity offer to the benefits you would receive by rolling over a lump-sum retirement distribution into a single premium immediate annuity you can get through an insurance company.
Assuming all of your retirement plan contributions were made with pre-tax dollars or your retirement plan is employer funded, each payment from your company annuity (or the insurance company annuity) would be taxable as ordinary income when received. If you made any after-tax contributions, a portion of each annuity payment would be tax-free.
Your financial professional can help you determine if an annuity payout is your best option.
