William Penn Life, 2011 (46. évfolyam, 1-12. szám)

2011-07-01 / 7. szám

Annuity Essentials by Debbie Evans

About movin

WELCOME to the first installment of "Annuity Essentials." Periodically, we will provide tidbits of information to help you, our members, better understand the sometimes complex world of annuities. With some simple basic information, you will be better prepared to discuss your annuity with your agent and be able to explain exactly what you want to accomplish.

To begin, let's talk about rollovers and transfers.

In today's market, many people are relocating their investments and savings to arguably safer, higher interest paying, fixed annuities with guaranteed minimum interest rates. If you are one of those people, you need to know the lingo. By now, you have heard the terms "transfer" and "rollover." These terms are two very separate transactions. What is the difference? Let's compare.

Moving by rollover

The rollover process begins with a distribution to the IRA holder from his or her IRA plan. The check is made payable to the IRA holder. The IRA holder has 60 days from receiving the check to complete a rollover and can rollover only ONE distribution from the IRA plan within a one-year period. The distribution is reported on IRS form 1099R (sent by Jan. 31 each year), and the rollover deposit is reported on IRS Form 5498

(sent by May 31 of each year). The Form 5498 trumps the 1099R, so to speak. This makes the transaction nontaxable, if done properly.

Moving by transfer

The transfer process begins with a request from the IRA holder to the current custodian or issuer (i.e, a bank, insurance company, etc.) to transfer the funds directly to a new custodian/issuer. A check is then issued payable to the new custodian/issuer for the benefit of the IRA holder. The 60-day rule for rollovers does not apply, and this transfer is not reportable. Clean and easy.

Even though a rollover and a transfer accomplish the same thing, one method may be better than the other, depending on the IRA holder's situation. However, keep in mind that because the transfer is not reportable, the frequency of transfers are not limited and possibly the better choice, unless, of course, you have a specific reason to do a rollover.

Debbie Evans, FIC, is WPA's Annuity Specialist. You can reach Debbie at 1-800-848-7366, ext. 127, or by email at devans@williampennassociation.org.

WPA is looking for a few good agents who want to grow with us

William Penn Association is looking to grow and expand its reach in current and possibly new markets. To do this we are seeking to add highly motivated agents to our list of over 200 existing agents. WPA currently writes insurance and annuity products in 19 states and the District of Columbia. The states include; CA, CT,

DC, FL, IL, IN, KY, MD, MA, Ml, MO, NE, NJ, NY, OH, PA, VA, WV and Wl.

To grow, we need both full-time and part-time agents.

Good agents are the lifeblood of any association, and WPA is a strong and growing association that has much to offer our members and the agents that write for us. If you are interested in an opportunity to grow with us, then contact Barbi Tew at 1-800-848-7366, ext. 120, or Jeff DeSantes at ext. 134. Thank you.

6 0 July 2011 0 William Penn Life