Tax Sheltered Annuity

  • Thread starter Stuart A. Bronstein
  • Start date

S

Stuart A. Bronstein

I haven't dealt with tax sheltered annuities before, and I want to
make sure I'm not missing something.

My understanding is that, for essentially nonprofit employers, these
act somewhat like a 401K, in that contributions are tax deferred, and
withdrawals are taxed.

I want to make sure my understanding of the following is complete:
When the owner of the annuity dies, any balance is distributed and
all taxed at that time.

Is there any situation, such as with IRA's, that beneficiaries or
heirs can further defer taxation by not withdrawing all funds at
once?

Thanks.

___
Stu
http://DownToEarthLawyer.com
 
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J

JoeTaxpayer

I haven't dealt with tax sheltered annuities before, and I want to
make sure I'm not missing something.

My understanding is that, for essentially nonprofit employers, these
act somewhat like a 401K, in that contributions are tax deferred, and
withdrawals are taxed.

I want to make sure my understanding of the following is complete:
When the owner of the annuity dies, any balance is distributed and
all taxed at that time.

Is there any situation, such as with IRA's, that beneficiaries or
heirs can further defer taxation by not withdrawing all funds at
once?

Thanks.

___
Stu
http://DownToEarthLawyer.com
When I search on "Tax Sheltered Annuity" (within IRS site) I'm led to
believe this is what a 403(b) is usually invested in, the site treats
them as synonymous.
http://www.irs.gov/publications/p571/ch08.html implies a beneficiary can
roll to an inherited IRA.

Disclaimer - I have no experience with 403(b) or TSAs
 
S

Stuart A. Bronstein

JoeTaxpayer said:
Stuart A. Bronstein wrote:

When I search on "Tax Sheltered Annuity" (within IRS site) I'm
led to believe this is what a 403(b) is usually invested in, the
site treats them as synonymous.
http://www.irs.gov/publications/p571/ch08.html implies a
beneficiary can roll to an inherited IRA.
Thanks. I didn't think of looking at the statute for some reason.
It actually does seem to allow rolling some or all over into an IRA,
among other things.

I'm doing some estate planning with someone, and trying to advise on
the best way to deal with what is apparently a 403(b) annuity.

___
Stu
http://DownToEarthLawyer.com
 
D

dvsarwate

When I search on "Tax Sheltered Annuity" (within IRS site) I'm led to
believe this is what a 403(b) is usually invested in, the site treats
them as synonymous.http://www.irs.gov/publications/p571/ch08.htmlimplies a beneficiary can
roll to an inherited IRA.
Once upon a time, 403(b) plans were almost exclusively
(if not exclusively) invested in tax-deferred annuities
usually with TIAA/CREF for school teachers and college
professors. Indeed, most of these people asked "Do you
have TIAA/CREF?" instead of "Do you have a 403(b) plan?"
Thus, it is not surprising that in some cases, the language
of IRS publications still seems to imply that 403(b) plans
and tax-deferred annuities are one and the same.
But, many more investment possibilities became available
about 35 years ago with mutual fund companies etc offering
their own plans to employers, and even TIAA/CREF set up
its own mutual funds for teachers and professors to invest
in instead of the traditional TIAA/CREF tax-deferred annuity.

Dilip Sarwate
 
J

JoeTaxpayer

Once upon a time, 403(b) plans were almost exclusively
(if not exclusively) invested in tax-deferred annuities
usually with TIAA/CREF for school teachers and college
professors. Indeed, most of these people asked "Do you
have TIAA/CREF?" instead of "Do you have a 403(b) plan?"
Thus, it is not surprising that in some cases, the language
of IRS publications still seems to imply that 403(b) plans
and tax-deferred annuities are one and the same.
But, many more investment possibilities became available
about 35 years ago with mutual fund companies etc offering
their own plans to employers, and even TIAA/CREF set up
its own mutual funds for teachers and professors to invest
in instead of the traditional TIAA/CREF tax-deferred annuity.
Is it correct to say that all TSAs are 403(b)s? And your post clarifies
that 403(b)s now offer more than just TSAs? Do I understand that
correctly? (and thanks for the lesson, good to know this history)
 
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G

Gene E. Utterback, EA, ABA

"Stuart A. Bronstein" wrote in message

Alan said:
Stuart A. Bronstein wrote:
If a spouse inherits, the spouse can roll it over to any plan
listed on this pdf file.
http://www.irs.gov/pub/irs-tege/rollover_chart.pdf

If a non-spouse inherits, it can be rolled over to an Inherited
IRA.
Thanks, Alan!

___
Stu
http://DownToEarthLawyer.com

--
<< ------------------------------------------------------- >>

For all practical purposes a beneficiary's options for dealing with an
inherited TSA - or TSP or 403(b) or whatever they are calling it that week -
is essentially the same as any other inherited retirement account. They
can:

A - take the money and pay the tax all at once;
B - take it over 5 years;
C - roll it into an Inherited IRA and take distributions over THE
beneficiary's life;
D - if applicable, roll it into an inherited IRA and take distributions over
the original owner's remaining life.

Good luck,
Gene E. Utterback, EA, RFC, ABA
 
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