Permalink Submitted by Alan - IRA critic on Tue, 2020-10-06 21:31
Is this a joint and survivor annuity, thereby showing only one owner? If not, how to calculate a 72t plan could be problematic. Otherwise, the rules for 72q plans are the same as for 72t plans, so a 72t calculator would work. Such calculators are available at bankrate. com or dinkytown. com.
Permalink Submitted by Alan - IRA critic on Thu, 2020-10-08 02:59
If both are owners (which is rare), I don’t know whose age the calculation would be based on since age is one of the factors which determines the calculation. You might have to have the registration changed to just one owner with the other spouse as beneficiary. The younger the owner the lower the 72q calculation, but do not assume using the age of the youngest spouse will be OK with the IRS. Or check with the insurance company to see if they are aware of any IRS guidance on this. Other than this joint owner issue, any 72t calculator will generate the correct calculation. After resolving the ownership question, best to use 2 calculators to make sure the results agree.
Permalink Submitted by Alan - IRA critic on Fri, 2020-10-09 15:57
Looks like they have a decision to make, either the 72q plan with ownership change, or leave as is. The penalty may not be too bad if the gains on the contract are low enough, since the penalty only applies to the taxable amounts of the distributions.
Permalink Submitted by Alan - IRA critic on Tue, 2020-10-06 21:31
Is this a joint and survivor annuity, thereby showing only one owner? If not, how to calculate a 72t plan could be problematic. Otherwise, the rules for 72q plans are the same as for 72t plans, so a 72t calculator would work. Such calculators are available at bankrate. com or dinkytown. com.
Permalink Submitted by Geoffrey Kasher on Wed, 2020-10-07 16:09
It is a VA with a GMIB rider.Husband and wife and both are owners, Husband is listed as annuitant
Permalink Submitted by Alan - IRA critic on Thu, 2020-10-08 02:59
If both are owners (which is rare), I don’t know whose age the calculation would be based on since age is one of the factors which determines the calculation. You might have to have the registration changed to just one owner with the other spouse as beneficiary. The younger the owner the lower the 72q calculation, but do not assume using the age of the youngest spouse will be OK with the IRS. Or check with the insurance company to see if they are aware of any IRS guidance on this. Other than this joint owner issue, any 72t calculator will generate the correct calculation. After resolving the ownership question, best to use 2 calculators to make sure the results agree.
Permalink Submitted by Geoffrey Kasher on Fri, 2020-10-09 14:22
thank you
Permalink Submitted by Geoffrey Kasher on Fri, 2020-10-09 14:49
Both are listed as owners,. any change in ownership voids the GMIB rider. FYI. Thanks
Permalink Submitted by Alan - IRA critic on Fri, 2020-10-09 15:57
Looks like they have a decision to make, either the 72q plan with ownership change, or leave as is. The penalty may not be too bad if the gains on the contract are low enough, since the penalty only applies to the taxable amounts of the distributions.