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Should my wife keep her annuity from a previous job or convert it to an IRA?

My wife just learned she has an annuity from a company she worked for over 20 years ago. She will be eligible to withdraw the funds in a couple of months. A friend told us that she should roll it over into an IRA because there would be no penalties and she could withdraw funds from the IRA also without penalties. Should she keep it as an annuity, or convert it to an IRA?

Annuities, IRAs
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October 2018


Good question.  It will depend.  Her former company may require her to take a lump sum or monthly payments from the annuity.  They also may allow the lump sum to be rolled over to an IRA.  Rolling to an IRA avoids any current taxes and allows your wife to withdraw funds at her discretion.

Keeping it in the annuity versus rolling it over to an IRA will be determined by what the former company's rules are and if she can keep it where it is what the benefits of leaving it there will be.

I would suggest you get more details from her former company before deciding what to do.

Thank you,


October 2018
October 2018