Nonqualified plan

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Nonqualified plan

A retirement plan that does not meet the IRS requirements for favorable tax treatment.

Nonqualified Plan

An annuity or pension plan that one buys individually rather than through an employer. Nonqualified plans are not subject to the same restrictions as qualified plans. As a result, withdrawal penalties are smaller or non-existent, and one may continue to make contributions to a more advanced age (sometime until the annuitant is over 80). In the United States, specific restrictions on nonqualified plans are set at the state level. The IRS does not regulate them; as a result, contributions are not tax-deductible, but earnings still are.
References in periodicals archive ?
In general, investment income includes, but is not limited to: interest, dividends, capital gains, rental and royalty income, nonqualified annuities, income from businesses involved in trading of financial instruments or commodities and businesses that are passive activities to the taxpayer (within the meaning of section 469).
Planning Point: Although the rules under IRC Section 1035 cover a broader array of annuity exchanges, funds in nonqualified annuities are not freely movable.
For many, income taxes on inherited retirement plans, 401(k) balances and gains in nonqualified annuities may create significant costs.
The following discussion of annuities relates to nonqualified annuities.
Another important element, Ludden said, is that the law permits tax-free exchanges (under Section 1035 of the tax code) of existing nonqualified annuities into LTC annuities.
You may take LTC risk charges from life insurance, endowments and nonqualified annuities, and these charges will not be considered disbursements.
For deferred annuities, nonqualified annuities generated more sales premium than either IRAs or qualified employer plans.
While on target with the discussion of qualified retirement plans and Roth IRAs, the article misinformed readers about nonqualified annuities.
Warshawsky, "Taxing Retirement Income: Nonqualified Annuities and Distributions from Qualified Accounts," NBER Working Paper No.
In broad terms, funding agreements are nonqualified annuities or annuity-like instruments that are designed specifically to generate regular cash flows to service the debt on short-term or medium-term notes issued through a securitization vehicle--a trust and/or special-purpose vehicle.
Nolan is the director of retirement planning services at Penn Mutual and provides sales and technical support in the areas of ERISA qualified retirement plans, SIMPLE, SEP, traditional IRAs, Roth IRAs, nonqualified annuities and life insurance.
First, because the tax deferral enjoyed by nonqualified annuities flows from provisions of the Internal Revenue Code that apply only to nonqualified annuities, that deferral cannot be wasted by an IRA annuity because it does not apply to an IRA annuity.