Can I use my 401k to buy an annuity?
To move money from a 401(k) or other qualified retirement plan to an annuity, you can roll over your retirement funds directly into a qualified annuity contract, keeping the transfer tax deferred as long as the money goes straight from the 401(k) plan to the insurance company. This allows you to convert your retirement savings into an annuity that can provide guaranteed income for life or a competitive compounding fixed interest rate. We will be here every step of the way and make it a seamless process for you.
Schedule A Consultation
You can use your qualified retirement funds to purchase an annuity without a huge tax burden when you buy. As long as the transaction is set up as a direct rollover or transfer, you won’t owe taxes when you move your 401(k) funds to an annuity.
It will not be taxed until lifetime payments start, or until you withdraw funds, or you are required to take RMD’s at age 73. (Or until age 85 if you purchase a Qualified Longevity Annuity Contract or QLAC).
If retirement planning feels too complex, then using your 401k to purchase a stable, lifelong income with an annuity may simplify your life. Annuities may feel complex, but if you focus on the guarantees they are simple.
Combining the tax-deferred growth of a 401(k) with the guaranteed income of an annuity can help you enjoy peace of mind and financial security for the rest of your life.
If you have not yet retired and want to use funds from your 401k, you must be over 59 ½ and even then, a few employer plans will not allow you to transfer funds until you separate from employment.
If you are over 59 ½ your employer may allow you to transfer funds from your 401k into an annuity while you are still working.