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Additional Tax Questions
Yes. You can change your allocation from your online account.
Please note that you can only make one transfer or withdrawal from the "Personal Annuity Select Fixed" account once every six months.
If your funds aren't already in a retirement plan and they aren't tax deferred, you first need to redeem the shares held at the other company and send them in along with a completed mutual funds application.
You can open a tax-deferred mutual fund IRA by completing the application and mailing it in.
You cannot directly roll mutual funds over to TIAA unless they're already invested in a retirement plan (like a 403(b) or an IRA).
That depends on a number of factors including the type of account, whether or not your contributions have been deducted previously, and the timing of your withdrawals. Call us at 800-842-2252 for more information.
The tax information contained above is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding tax penalties that may be imposed on the taxpayer. It was written to support the promotion of the products and services addressed herein. TIAA-CREF or its affiliates do not provide tax advice. Please consult your tax advisor.
This depends on two key factors: your age and the type of IRA.
If you take money out before age 59 ½, then you may face a penalty equal to 10% of the money you take out from a Traditional or SEP IRA.
Traditional or SEP IRA
Any money you withdraw will be taxed as ordinary income. However, if you contributed money after taxes into an IRA, your withdrawals will not be taxed.
You can withdraw money from those accounts tax free as long as you take the money at least 5 years after January 1 of the year in which you first contributed to that plan, and you are either age 59 ½ or older, or considered disabled. If you don't meet those requirements, any money you withdraw will be taxed as early income and subject to a penalty for early withdrawal.
For annuity contracts already in payout status, why does the alternate payee need to complete a federal W-9 election form?
The IRS requires us to obtain the signed Federal Taxpayer Identification Number and Certification form W-9 before completing the division process. The W-9 form certifies the alternate payees' Social Security number.
Generally, once we receive the QDRO, payments will be put on hold, and the process to divide them implemented. Then, the benefits will be released for receipt by the first of the following month unless otherwise specified.
That depends largely on whether you originally contributed that money before or after paying taxes on it.
When you withdraw money that you contributed on a before-tax basis from your retirement plan, that money is taxed as ordinary income.
If you contributed money to your retirement plan on an after-tax basis you won’t have to pay taxes. However, note that any earnings from these after-tax contributions are still taxable.
You may hold a retirement plan that allows Roth contributions, which are made with after-tax money. You can withdraw money from those accounts tax free as long as you take the money at least 5 years after January 1 of the year in which you first contributed to that plan, and you are either age 59 ½ or older, or considered disabled.
Note on early withdrawal penalties
For any retirement plan, there are penalties for taking money out if you're younger than 59 ½. Any money taken from a retirement plan is generally subject to a 10% early withdrawal penalty (unless certain conditions are met).
The short answer: It's complicated. The long answer depends on the source of income.
Your employer-sponsored retirement plan
Pre tax contributions withdrawn from a tax-deferred retirement plan are taxed as ordinary income. Any "after-tax funds" in the account are returned to you tax free; however, the earnings from these after-tax contributions are still taxable.
Some retirement plans allow for Roth contributions. If Roth contributions are made to the retirement plan, the contributions have already been taxed and the earnings can be withdrawn tax free depending on certain conditions. The date of the distribution needs to have occurred at least 5 years after the beginning of the year in which the first Roth contribution was made (or its predecessor in the case of a rollover), and the participant is either (1) age 59½ or older or (2) considered disabled. For certain withdrawals considered under the Internal Revenue Code to be rollover eligible, we are required to withhold 20% of the taxable amount withdrawn as a prepayment of taxes.
Additionally, withdrawals from employer-sponsored plans taken before you obtain age 59½ may be subject to a 10% early withdrawal penalty (unless certain conditions are met).*
Your Individual Retirement Account (IRA)
Withdrawals from Traditional and SEP IRAs are generally taxed as ordinary income. However, if you have funded your IRA with non-deductible contributions, the non-deductible contribution portion of your IRA is not taxable upon withdrawal (earnings on the non-deductible contributions will still be subject to ordinary income tax). Withdrawals before age 59½ may be subject to a 10% early withdrawal penalty unless certain conditions are met.*
Withdrawals from Roth IRAs are tax free provided the date of the distribution occurs at least 5 years after the beginning of the year in which the first Roth contribution was made (or its predecessor in the case of a rollover) and the participant is either (1) age 59½ or older or (2) considered disabled. Prior to meeting these requirements, any earnings withdrawn are taxable as ordinary income and may be subject to the early withdrawal penalty.
For lifetime annuity payments, fixed period annuity payments (set up for more than 10 years), and Minimum Distribution Option payments, there are no withholding requirements. This means you can either designate a flat dollar amount, a fixed percentage you want withheld, or opt to have no withholding from these types of distributions. If you do not make an election, we are required by the IRS to withhold 10% of your payments.
* An early withdrawal penalty does not apply if you meet one of the following conditions:
- It's part of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the employee or the joint lives (or joint life expectancies) of such employee and his designated beneficiary.
- You leave the sponsoring employer at age 55 or older.
- You have unreimbursed medical expenses that exceed 7.5% of your adjusted gross income.
- You are disabled as prescribed by IRS Regulations.
- The withdrawal is made by your beneficiary after your death.
- The withdrawal is made from an account issued through a Qualified Domestic Relations Order.
- The withdrawal is made for up to $10,000 to pay for first-time homebuyer expenses (IRA Only).
Are taxes required for cash withdrawals and/or settlements from the awarded retirement product contracts?
All withdrawals or settlements by the alternate payee will be subject to ordinary income taxation. Withdrawals initiated prior to the alternate payee attaining age 59½ are generally not subject to the IRS 10% early withdrawal penalty.