Distributions from Your Retirement Plan
- 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
Advantages and Disadvantages of Taking an Annuity
Advantages
- Fixed monthly income for life and the security of knowing that payments will continue on a regular basis.
- You don't have to actively manage your pension amount.
- Option of spreading the payments out over your spouse's lifetime as well as your own.
- Confidence in knowing you can't outlive your pension.
Disadvantages
- Once you start to receive an annuity, you can't elect a lump-sum distribution.
- If you select an annuity today, you will be unable to take advantage of interest rate increases, since you have a fixed monthly payment.
- If you die prior to your life expectancy, you and your beneficiary, if applicable, may not collect the full value of your accrued benefit. For example, suppose at retirement your spouse waives his or her right to your pension, and you choose a life annuity. Assume you live for only one year and then die. Your beneficiary will not receive payments, since you chose the life annuity option.
Before accepting an annuity form of payout from your retirement plan, compare it with the benefits you would receive by rolling over a lump-sum distribution into an annuity purchased from an insurance company.
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Important information about procedures for opening a new account
To help the government fight the funding of Terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.
What this means to you: When you open an account, we will ask you for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents.
Investment products are offered through Osaic Institutions, Inc., Member FINRA/SIPC. Insurance products offered through Osaic Institutions, Inc.