What amount will be tax-excludible to the annuitant?
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Just prior to the payout period the amount of money that is available in the contract as principal paid in over the life of the annuity is determined at $200,000. The total annuity is currently valued at $360,000. The annuity payment is calculated at $24,000 per year. Our client wants to retire at age 65. The IRS Tables multiplier from the IRS Table for Age 65 is 15 (remaining life expectancy). What amount will be tax-excludible to the annuitant?
$1,111 until the principal amount has been exhausted
$888.89 for the life of the annuitant
$1,111 for the life of the annuitant
$888.89 until the principal amount has been exhausted
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- A person has an individual retirement account that they contribute | . $2,150 to annually at the end of each year. The person wants to retire after making 35 annual contributions to the account. Assuming that the account earns 12% interest annually, using the Future Value of an Annuity of 1 table, compute the value of the account on the date of the final contribution (35 years from the present).Assume that a pension plan offers to pay $500,000 on a person's retirement (his/her sixty-fifth birthday) or a semi-annual annuity for the remainder of the person's life - i.e., starting 6 months from the date of retirement and including his/her date of death. Interest rates are 7 percent compounded annually, and a person's life expectancy has been determined statistically as being 78.5 years. Calculate the amnunt of the annuity that would make a person indifferent between the options? A person joins a pension plan at age 40 (40" birthday). How much will s/he have to pay into the pension fund each year in order to accumulate a balance of $500,000 by the time s/he retires (age 65)? Assume that the final payment is on his/her 60th birthday. Interest rates are 9% compounded semi-annually.Assume that a pension plan offers to pay $500,000 on a person's retirement (his/her sixty-fifth birthday) or a semi-annual annuity for the remainder of the person's life – i.e., starting 6 months from the date of retirement and including his/her date of death. Interest rates are 7 percent compounded annually, and a person's life expectancy has been determined statistically as being 78.5 years. Calculate the amounț of the annuity that would make a person indifferent between the options?l .Ysm
- Fifteen years ago, Mr. Fairhold paid $40,000 for a single-premium annuity contract. This year, he began receiving a $1,100 monthly payment that will continue for his life. On the basis of his age, he can expect to receive $249,600. Assume that on January 1, 2026, Mr. Fairhold's unrecovered investment in the annuity is $1,650. Required: a. How much of his total 2026 annuity payments ($13,200) are taxable? b. Assume that he dies in February after receiving only one $1,100 payment. What are the tax consequences on his final Form 1040?Joel makes regular (end of term) deposits into his RRSP (Registered Retirement Savings Plan) that will be converted into an RRIF (Registered Retirement Income Fund) 20 years from now. During retirement Joel would like to receive $5,400 at the end of every six months for 22 years. If interest is 3.28% compounded semi-annually (for both the RRSP and RRIF). Answer the following questions, and round all answers to two decimal places where necessary. 1) How much money should Joel have in his RRIF to receive payments of $5,400 at the end of every six months? P/Y= PV = $ esc P/Y = PV = $ Submit Question 1 2) What payment will Joel have to make at the end of every six months into his RRSP so that there is enough money in his RRIF at the start of his retirement? Q A N C/Y= FI PMT= $ C/Y= PMT= $ 2 W S * X #3 80 F3 E N= D N= FV = $ FV = $ $ 4 Q F4 R LL I/Y = F I/Y = do 5 % T G 6 % % F6 Y & 7 H F7 U 00 * 8 DII FB ( 09 ODevine purchased an annuity of N$1 500 per month from an insurer on 31 May 2019. The cash consideration paid by Devine was N$420 000 and the total expected returns of all the annuities as per the contract amounts to N$560 000. She received the first monthly cheque of N$1 500 on 30 June 2019. Required: Calculate the exempted capital element of the annuity received by Devine for the 2020 year of assessment. Answer:
- In 2012 the maximum Social Security deposit by an individual was $8,386.75. Suppose you are 27 and make a deposit of this amount into an account at the end of each year. How much would you have (to the nearest dollar) when you retire if the account pays 2% compounded annually and you retire at age 65?_____$A self-employed person deposits $4,000 annually in a retirement account (called a Keogh or H.R. 10 plan) that earns 7 percent. Use Appendix A and Appendix C to answer the questions. Round your answers to the nearest dollar. How much will be in the account when the individual retires at the age of 65 if the savings program starts when the person is age 50?$ How much additional money will be in the account if the saver defers retirement until age 70 and continues the contributions?$ How much additional money will be in the account if the saver discontinues the contributions at age 65 but does not retire until age 70A person joins a pension plan at age 35. How much will she have to pay into the pension fund each year in order to accumulate a balance of $250,000 by the time s/he retires (age 65)? Assume that the payments start on his/her 35th birthday and the final payment is on his/her 60th birthday. Interest rates are 7% compounded annually
- You begin making contributions to a new retirement account on your thirtieth birthday. You make a contribution of $4000 at the beginning of each year through your sixty-fourth birthday. Starting at age sixty-five and continuing through your eightieth birthday, you made a level withdrawal on your birthday. Find the amount of these withdrawals if they completely exhaust the balance in your account and the annual effective rate is 6% until you are sixty-five and 5% thereafter.“Sunrise Industries wishes to accumulate funds to provide a retirement annuity for its vice president of research, Jill Moran. Ms. Moran, by contract, will retire at the end of exactly 12 years. Upon retirement, she is entitled to receive an annual end-of-year payment of $42,000 for exactly 20 years. If she dies prior to the end of the 20-year period, the annual payments will pass to her heirs. During the 12-year “accumulation period,” Sunrise wishes to fund the annuity by making equal, annual, end-of-year deposits into an account earning 9% interest. Once the 20-year “distribution period” begins, Sunrise plans to move the accumulated monies to an account earning a guaranteed 12% per year. At the end of the distribution period, the account balance will equal zero. Note that the first deposit will be made at the end of year 1 and that first distribution payment will be received at the end of year 13.TO DOa. How large a sum must Sunrise accumulate by the end…You annually invest $1,500 in an individual retirement account (IRA) starting at the age of 25 and make the contributions for 15 years. Your twin sister does the same starting at age 40 and makes the contributions for 25 years. Both of you earn 6 percent annually on your investment. What amounts will you and your sister have at age 65? Use Appendix A and Appendix C to answer the question. Round your answers to the nearest dollar. Amount on your account: $ Amount on your sister's account: $ Who has the larger amount at age 65? Select the larger amount.