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Qualifying Annuity

What is 'Qualifying Annuity'

This type of annuity is similar to any other, except that it has been approved by the IRS for use within a Qualfied Retirement Plan or IRA. Qualifying Annuties can be either fixed, indexed or variable, depending upon the investment objectives of the plan sponsor. Contributions made into a Qualifying Annuity are tax-deductible according to ERISA guidelines, unless the plan or annuity has a Roth feature.

Explaining 'Qualifying Annuity'

Qualifying Annuities are not tax-deductible plans in and of themselves; they must reside within a Qualified Plan or IRA in order to enjoy this status. Qualifying Annuities can be either the sole vehicle inside the plan or account, or they can be one of several other choices that are offered as well. In many cases, the Qualifying Annuity is a variable contract and is the only vehicle offered within the plan, with the variable subaccounts constituting the choices available to plan participants.


Further Reading


Household ownership of variable annuities
www.journals.uchicago.edu [PDF]
… of these group programs provides insights regarding the feasibility of purchasing annuities with the … that that these rules do not substantially affect the private demand for annuity products … chapter also sketches the complex tax rules that govern payouts from qualified accounts in …

Developments in decumulation: The role of annuity products in financing retirementDevelopments in decumulation: The role of annuity products in financing retirement
link.springer.com [PDF]
… of these group programs provides insights regarding the feasibility of purchasing annuities with the … that that these rules do not substantially affect the private demand for annuity products … chapter also sketches the complex tax rules that govern payouts from qualified accounts in …

Household demand for variable annuitiesHousehold demand for variable annuities
papers.ssrn.com [PDF]
… of these group programs provides insights regarding the feasibility of purchasing annuities with the … that that these rules do not substantially affect the private demand for annuity products … chapter also sketches the complex tax rules that govern payouts from qualified accounts in …

Annuities and their derivatives: The recent Canadian experienceAnnuities and their derivatives: The recent Canadian experience
papers.ssrn.com [PDF]
… of these group programs provides insights regarding the feasibility of purchasing annuities with the … that that these rules do not substantially affect the private demand for annuity products … chapter also sketches the complex tax rules that govern payouts from qualified accounts in …

Variable annuities versus mutual funds: a Monte-Carlo analysis of the optionsVariable annuities versus mutual funds: a Monte-Carlo analysis of the options
www.sciencedirect.com [PDF]
… of these group programs provides insights regarding the feasibility of purchasing annuities with the … that that these rules do not substantially affect the private demand for annuity products … chapter also sketches the complex tax rules that govern payouts from qualified accounts in …

Betting on death and capital markets in retirement: a shortfall risk analysis of life annuitiesBetting on death and capital markets in retirement: a shortfall risk analysis of life annuities
www.nber.org [PDF]
… of these group programs provides insights regarding the feasibility of purchasing annuities with the … that that these rules do not substantially affect the private demand for annuity products … chapter also sketches the complex tax rules that govern payouts from qualified accounts in …

Lifecycle impacts of the financial and economic crisis on household optimal consumption, portfolio choice, and labor supplyLifecycle impacts of the financial and economic crisis on household optimal consumption, portfolio choice, and labor supply
www.nber.org [PDF]
… of these group programs provides insights regarding the feasibility of purchasing annuities with the … that that these rules do not substantially affect the private demand for annuity products … chapter also sketches the complex tax rules that govern payouts from qualified accounts in …

In sickness and in health: An annuity approach to financing long-term care and retirement incomeIn sickness and in health: An annuity approach to financing long-term care and retirement income
www.jstor.org [PDF]
… of these group programs provides insights regarding the feasibility of purchasing annuities with the … that that these rules do not substantially affect the private demand for annuity products … chapter also sketches the complex tax rules that govern payouts from qualified accounts in …

Putting the pension back in 401 (k) plans: Optimal versus default longevity income annuitiesPutting the pension back in 401 (k) plans: Optimal versus default longevity income annuities
www.nber.org [PDF]
… of these group programs provides insights regarding the feasibility of purchasing annuities with the … that that these rules do not substantially affect the private demand for annuity products … chapter also sketches the complex tax rules that govern payouts from qualified accounts in …



Q&A About Qualifying Annuity


Are contributions made into a Qualifying Annuity tax-deductible?

Contributions made into a Qualifying Annuity are tax-deductible according to ERISA guidelines unless the plan or annuity has a Roth feature.

What is a Qualifying Annuity?

A Qualifying Annuity is an annuity that has been approved by the IRS for use within a qualified retirement plan or IRA.

What are the different types of annuities?

There are fixed, indexed and variable annuities.

Are there any other features of a Qualified Plan or IRA that must be met in order to enjoy this status?

Yes, there must be either a single vehicle inside the plan or account, or they can be one of several other choices that are offered as well. In many cases, the qualifying annuity is a variable contract and is the only vehicle offered within the plan with variable subaccounts constituting the choices available to participants.

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