When you add a future annuity purchase, the Planner will reduce the source account and create an income stream.
Follow these steps:
STEP 1: Head to My Plan > Income > Annuity
STEP 2: Press Add an Annuity
STEP 3: When asked "Have you purchased this annuity yet?" Select "No."
STEP 4: Enter the amount to invest, purchase age, income start age, survivor and COLA
NOTE: The Planner has its own annuity calculator, which is updated monthly based upon current bond rates. If your annuity is based upon a different rate, you have two options.
Method 1:
Step 1: Use the future annuity purchase
Step 2: View the monthly income in our model
Step 3: Add a additional income stream to match the projection from the annuity company
Method 2:
Step 1: Reduce the IRA by the amount of the annuity by entering a One-Time Expense in the Expenses and Healthcare section and selecting "Deductible" in order to avoid any income tax modeling
Step 2: Add the annuity in My Plan > Income > Annuity as already purchased to match the monthly income projection from the annuity company
When an annuity is purchased from a traditional IRA, the payment from the annuity is considered to satisfy the RMD from the individual retirement annuity each year. That is, you don’t have to worry about calculating an RMD amount which might be different from the payment from the annuity. The payment satisfies the RMD by definition.