Resource Center

How do annuities work in Advizr software?

You can enter any type of annuity product (excluding riders at this time) as an asset that will be used to help fund goals. We will automatically estimate taxes and can even include surrender charges if entered on the account input screen.

To begin, head over to the Accounts page of a client's Profile and click on "Add Account". You can either link an existing annuity account if we support the institution, or add a manual account:

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When adding a manual account, you'll need to follow the prompts:

  • Select the "Annuity" account type
  • Select the institution (if you can't find the name of the institution, just click on "Can't find it")
  • Enter a nickname for the account that will appear as its title in the plan
  • Select the Annuity Type (Variable, Fixed, or Indexed)
  • Select whether the annuity is qualified (IRA, 403(b), etc.) or non-qualified (this is the default selection) for tax purposes
  • Enter the current market value
  • Choose the Account Owner - this can be either the client or the spouse, or a trust if you've added one in the Trusts section
  • Enter any notes regarding riders in the Comments section as a placeholder - we'll be adding support for income riders in the future!

Once you've made these selections, you'll need to click on "Show Advanced" if you want to enter any further details on the account, such as the surrender schedule or year the client plans to annuitize the account.

  • Enter expected annuitization year
  • Enter the principal amount if you wish to have distributions from a non-qualified account taxed appropriately
  • Choose whether the principal amount contribution was pre- or post-tax, again to increase accuracy of taxation on distributions from the annuity
  • Enter the surrender schedule of the annuity, with each year's percentage separated by a comma (see screenshot below for an example, or hover your mouse over the tool tip next to that field)
  • Enter the purchase year for increased accuracy in the surrender penalties of the account

Make sure to click on Save Changes when you're done!

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Once the account has been created, you'll then be able to add an asset allocation for the account just by clicking on the pie chart to the right of the account name on the Accounts page.

Now that you've entered the account, you can also control the order of its distribution towards retirement by going to the Financial Plan > Recommendation section, clicking on the What Ifs button at the top right corner of the graph, and navigating to "Distributions". You'll see the first three or four accounts listed there in order of distribution hierarchy, but you can click on "More" to change this.

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Another screen will pop up that allows you to remove accounts or change the order of the distribution hierarchy:

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Once you have decided upon the order of distribution and have saved all changes, including the changes to the overall What Ifs section, you will then be able to see any proposed distributions and corresponding taxes in the Projected Assets and Projected Cash Flow reports:

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