What Are Qualified Annuities?

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   Steve Savant

   Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona

   Qualified retirement plans like 401(k)s (under ERISA) may use tax deferred annuities as a funding product. Using tax deferred annuities in a qualified plan subjects the annuity to the rules of RMD distribution and the re-characterization of basis as taxable as ordinary income at the plan participants effective tax bracket rate. 

   Answered on August 8, 2013

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