I know it sounds somewhat alien to hear someone say that a split annuity is a “split ticket”. A split annuity is a type of annuity where you pay into two different annuity funds. So you pay into a separate and distinct account for each payment. In my case, I’m on my own account so I pay into my account for my IRA. But with my employer accounts, I have to make my payments to my employer’s account.
As you might expect, there is some good news here. The plan for the split annuity is a bit vague, but it looks like it will end up going through the same process for me, as I pay into the IRA. It’s possible I get a split-ass from my employer as I can’t spend any money on the IRA as my employer gives me a small percentage of the money. I have to buy a new car.
If I pay into the IRA I would probably have to pay into the employer account for it. For the split annuity, I would have to pay into the employer account for the entire year. Also, if I do a partial split-ass, there is no way I could do it all year round (with a month or so).
Although I hear from a few people that it is very easy to do, I’m not entirely sure that’s true. A friend of mine found out about this and decided to buy a partial split annuity after reading a post on this blog. I’m no expert on the topic of splitting up your IRA, but I know I would like to know too, and that’s what I’m researching now.
If you do decide to do a partial split annuity, you have three options. You can pay your entire $1K into your employer’s account, pay just a portion of it into your own account, or split it into two accounts. The problem with the three options is that you have to be careful about the amount you split when looking at your tax return.
Basically in a partial split annuity you are paying the higher percentage of the 1K you have to pay into your account and the rest into the other account (the non-retirement one). So basically you are paying $100K into your employer’s account and $50K into your own account. It sounds like a good idea, but there are a couple of problems.
One of the biggest problems with partial annuities is the fact that they are taxed at a much lower rate than a regular annuity. So basically if you are making $50K a year but are not saving for retirement you will pay less tax. The other problem is that it is very hard to predict the future. If you have enough money in your account you can live comfortably for the rest of your life paying the tax-free interest of 0.
Now, I am not saying that people shouldn’t save for retirement, but if you don’t think you have enough money in your savings account, then you should think carefully. I am saying that you are not going to save money by making your own annuity. You will have to put it into a mutual fund or similar arrangement and hope that it does not get wiped out by the market.
A mutual fund is simply a vehicle for the investor to put money into the fund so that it grows and grows and grows. The fund holds the investment risk and the fund investor pays the return on investment. The mutual fund provides an efficient way to share the risk of investments.
A mutual fund is basically just an investment arrangement where the investor is able to put money into the fund to increase its value.