Latest news with #beneficiary
Yahoo
5 days ago
- Business
- Yahoo
Annuity payout options: How to pick the right one for you
Key takeaways Choosing the right type of annuity payout depends on when you want payments to start, how long you want them to last and if you want a survivor's benefit. Single-life annuities provide higher income but no survivor benefit, while joint-and-survivor and period-certain options have lower monthly payments in exchange for protecting a beneficiary. Consider whether receiving lifetime income, leaving money to heirs or managing tax exposure is most important to you. An annuity is a financial product designed to provide a steady income stream, often during retirement. While an annuity can serve as a reliable paycheck replacement, the way your annuity pays out is just as important as the decision to purchase one. The concept is simple: You hand over a single sum of money or series of payments to an insurance company, and in exchange, the insurer takes on the risk and promises a series of payments to you either now or years in the future. However, the reality of annuities is complex and carries some risk. We'll explore how annuity payouts are calculated and structured to help you make an informed decision. How are annuity payouts calculated? When it comes to calculating annuity payouts, there's more to the story than just the type of annuity you choose and how long you'll receive payments. Your age and gender are also key. Insurance companies use actuarial tables to determine payouts, and life expectancy is their top consideration. If you're older when payments start, your monthly checks will be higher because you have fewer years to live, so the insurer expects to pay out for a shorter time. For example, a 70-year-old man starting payments will typically get a bigger check than a 60-year-old man choosing the same payout option. While delaying your annuity payments can boost your monthly income, everyone's situation is different, not unlike when you choose to claim Social Security. Waiting means you may need other income sources — like a part-time job, pension or retirement savings — to cover your expenses until those larger payments kick in. So really, the best time to buy an annuity depends on your unique situation and financial goals. Calculate: Your potential annuity payout Another factor influencing your payouts is your gender. Women generally live longer than men, so their monthly payments tend to be lower compared to those of men of the same age. The way you structure your annuity payments also plays a big role. Opting for a joint-life contract, which ensures payments continue to a spouse after your death, often means a smaller monthly payout compared to a single-life contract. Finally, the size of your payout depends on the insurer and how they invest your money. If you go with a fixed payout, your monthly amount stays the same and the insurance company takes on all the investment risk. If you choose a variable annuity, your payouts will vary. Your check size fluctuates based on the market performance of underlying subaccounts, shifting more investment risk to you. New to annuities? Annuities are complex and a bit different from other financial products. Learn how annuity fees and commissions work and the common annuity terms that every investor should know. Annuity payout options There are many ways an annuity can pay out. It largely depends on: When you want payments to start How long you want payments to last Whether you want payments for your life only or your life and your spouse's life Here are some of the most common annuity payout options and how they work. Single life/life only A single life annuity offers the highest monthly payout because the insurer only guarantees payments for your life — not your spouse's. Payments are made for as long as you live. However, after your death, the payments stop, and no money is passed on to beneficiaries. The payout amount is influenced by life expectancy: Shorter life expectancies result in larger payments, while longer life expectancies lower the monthly amount. If you live longer than expected, you may receive more than the total value of your annuity, which is beneficial if you expect a long retirement. Also known as a 'straight life' or 'life-only' annuity, this option is ideal for people who are seeking maximum monthly income but don't need to provide for a family member. However, it comes with a risk: If you pass away before receiving the full value of your annuity, the remaining balance stays with the insurance company. To mitigate this risk, some people choose a life annuity with a period certain. Life with period certain A life-with-period-certain annuity combines the benefits of lifetime income with a guaranteed minimum payment period. While it's similar to a straight life annuity, this option ensures payments continue for a set time — generally 10 to 20 years — even if you pass away during that time. If that happens, the remaining payments go to your beneficiary or estate. For example, choosing a life annuity with a 10-year period certain means your annuity will pay you for life, but if you pass away after five years, your beneficiaries will receive payments for the remaining five years. Because the insurer provides a guaranteed payment period, the monthly payment amount is lower compared to a straight life annuity. This can be a good option for people who want guaranteed income for life but worry about dying early and leaving no financial benefit to their loved ones. Joint and survivor A joint and survivor annuity ensures payments continue for the lifetimes of both you and a second person, usually your spouse. When one of you passes away, the other will continue receiving income. This results in smaller overall monthly payments compared to a single-life annuity because the payout needs to stretch in order to cover the life expectancy of two people instead of one. Some plans allow you to choose a reduced survivor benefit — for example, your spouse might receive 50 percent or 75 percent of the original payment instead of 100 percent — which might increase your initial monthly amount. For added security, you can include a period certain option. This ensures that if both you and your spouse pass away before the guaranteed period ends, the remaining payments go to a designated beneficiary. A joint and survivor annuity is a popular choice for couples who want to provide a level of financial stability for the surviving partner, regardless of who lives longer. Lump-sum payment A lump-sum payment lets you receive the full value of your annuity all at once. While this might sound appealing, it can carry significant tax implications. The IRS requires you to pay income tax on an annuity in the year you take the distribution, which could lead to a hefty tax bill. And depending on the type of annuity you choose, you may face surrender charges and other penalties if you take a lump-sum payout or distribution. Systematic withdrawal A systematic withdrawal gives you control over the amount and frequency of payments from your annuity. You decide how much to withdraw each month and how often, but there's a catch: Systematic withdrawal doesn't guarantee your funds will last for the rest of your life. Payments continue until either you stop them or your account runs out of money. So how long the payments last depends solely on the remaining cash value in your contract. This approach shifts the risk of withdrawing funds to you. If you withdraw too much or live longer than expected, you could exhaust your funds before you need them most. While systematic withdrawals offer flexibility, they require careful planning to avoid financial shortfalls in retirement. 5 factors to consider when choosing an annuity payout option Generally, you can't change your annuity payout option once payments begin, so it's important to evaluate your specific situation carefully before deciding. When comparing annuity payout options, consider these factors. Life expectancy: Your life expectancy plays a major role in determining the most suitable payout option. For example, life-only annuities may be more beneficial if you expect to live well into your 80s or 90s. Financial goals: Are you looking for lifetime income, flexibility or a legacy for beneficiaries? Your priorities will influence the best payout for you. Tax implications: Understand the tax consequences of your chosen payout structure, especially with lump-sum payments and systematic withdrawals. Beneficiary needs: If leaving money to your heirs is important, options like life with period certain or joint and survivor annuities may be appropriate. Financial planning: Consulting with a financial advisor can help ensure the annuity you choose fits in with your broader retirement strategy. An advisor can also help you consider all the potential risks of owning an annuity. You might consider buying an annuity if: You want steady income in retirement. You are concerned about outliving your savings. You are a conservative investor who prefers stability to growth. You have a long retirement horizon. You don't need immediate access to your money. An annuity might not be right if: You already have enough guaranteed income from other sources. You have a shorter life expectancy. You want high growth potential for your investment. You are uncomfortable with the fees and complexity that accompany annuities. You need quick access to your funds. Bottom line An annuity can be a strategic tool in retirement planning, but selecting the right payout option is important. Each comes with its own potential benefits and trade-offs, so understanding how these payouts align with your financial goals, risk tolerance and lifestyle is essential. By evaluating your priorities and seeking professional advice, you can maximize the usefulness of your annuity long into retirement. Get matched: Find a financial advisor who can help you maximize your investments — Kim Husband contributed to an update. Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Zawya
5 days ago
- Business
- Zawya
Oman: ROP to receive complaints on direct debits
MUSCAT: The Royal Oman Police (ROP) said it will receive complaints related to the non-cancellable direct debit tool under the National Payment Systems Law issued by Royal Decree No 8/2018, and related laws, through police stations in various governorates of the Sultanate of Oman. For this law, a direct debit means a payment order issued to debit the payer's bank account for the benefit of the beneficiary, at the latter's request. The regulations shall specify the provisions relating to direct debit, including its conditions, rules and procedures. Article 33: A person may issue a direct debit order in settlement of a debt owed by him. This order may be revocable or irrevocable, as specified in the regulations. Article 34: The person issuing the direct debit order shall guarantee payment of its value, and any condition exempting them from this guarantee shall be deemed null and void. Article 35: It is not permissible to refrain from paying the value of a direct debit order if it has sufficient funds to pay, even if the deadline for submission has expired. If the drawee bank refrains from paying the value of the direct debit order, it must prove the refusal and the reason for it by issuing a statement stating the time the direct debit order was submitted and the amount due. This statement must be dated, written and signed by the person issuing it. It is not permissible to refrain from issuing the statement mentioned in the previous paragraph upon the beneficiary's request. 2025 © All right reserved for Oman Establishment for Press, Publication and Advertising (OEPPA) Provided by SyndiGate Media Inc. (
Yahoo
03-08-2025
- Business
- Yahoo
Will your spouse automatically inherit your 401(k)?
It's my understanding that under the Employee Retirement Income Security Act, if a 401(k) participant is married, their spouse is their automatic primary beneficiary. What happens if the participant gets married again but doesn't update the beneficiary to be their new spouse? Does the surviving spouse still automatically override any prior beneficiary designation? Overthinking My 401(k) 'I told him that wouldn't fly': My 90-year-old mother's adviser pushed her to change her beneficiaries. What is going on? Social Security wants to make a change that would cause 3.4 million more people to have to visit its field offices Amazon's stock is falling, as this trend from earnings has investors worried Don't miss: 'He's an egomaniac': My husband said he'll flush his $1.5 million IRA 'down the toilet' rather than split it with me in our divorce. What can I do? Your first spouse will inherit the 401(k) if they remain the beneficiary. The reason is that these accounts become part of your marital property, along with your family home, automobiles, bank and brokerage accounts, and any other assets you acquired during your marriage. It's unlikely, however, that a 401(k) would be ignored during a divorce case. When couples divorce, 401(k) accounts are usually split through a qualified domestic relations order, or QDRO. 'When dividing the assets, the receiving spouse may choose to take the money as a distribution or roll it over into their own retirement plan account, such as an IRA,' says Merrill Edge, an investment advisory service. 'The typical additional tax for early withdrawal does not apply to distributions made pursuant to a QDRO, but the receiving spouse would still owe federal and, if applicable, state income taxes on the distribution,' it adds. 'The decision mainly depends on when the spouse intends to use the money and whether they can wait until retirement.' Rules regarding 401(k)s are set by the Employee Retirement Income Security Act. Here is what the Department of Labor says on the subject: 'In most 401(k) plans and other defined-contribution plans, the plan is written so different protections apply for surviving spouses. In general, in most defined-contribution plans, if you die before you receive your benefits, your surviving spouse will automatically receive them.' But here's the twist for anyone who plans to divorce: 'If you wish to select a different beneficiary, your spouse must consent by signing a waiver, witnessed by a notary or plan representative,' the department adds. 'If you were single when you enrolled in the plan and subsequently married, it is important that you notify your employer and/or plan administrator and change your status under the plan.' Individual retirement accounts are a different kettle of fish. IRAs are unrelated to your employment and deemed separate property, per IRS rules. 'Unlike a 401(k), which requires your spouse to sign off on your naming someone else as the beneficiary, you can leave your IRA to anyone you want,' according to the Gudorf Law Group, which has offices in Ohio. 'Leaving an IRA to a charity, leaving an IRA to your grandchildren — it's entirely up to you. All you have to do is name your intended beneficiary.' And there's another rub for anyone who is remarrying: 'Forgetting to complete or update a beneficiary form is a common mistake,' the law firm adds. 'If you don't have a form on file, some custodians will default to awarding the account to a surviving spouse, but some will make your estate your default beneficiary. This may result in IRA funds going to people you didn't intend, or in adverse tax consequences to your heirs.' But it can get even more complicated than that. In Missouri, for instance, IRAs, Roth IRAs and some 403(b) plans are generally not governed by Erisa, which regulates the administration of employee-based retirement plans, or the Retirement Equity Act, which requires that specific employee-based plans be provided for spouses, according to the Missouri Bar. 'They do not include the same protections for spouses,' lawyers Robert Selsor and Jeffrey Glogower note in this review. 'Thus, an IRA owner may be able to eliminate his or her spouse's right to inherit or make a claim against the IRA without spousal consent. This is true even if a covered plan, such as a 401(k), is rolled into an IRA.' In other words, your ability to disinherit a spouse or former spouse can depend on where you live. In New Jersey, law firm Hanlon Niemann & Wright argues that 401(k)s and IRAs are part of the 'augmented estate,' which refers to the value of a deceased person's assets from which a surviving spouse's elective share is calculated. These assets include the probate estate (mentioned in the will or assets without a named beneficiary) and certain nonprobate transfers. A surviving spouse is entitled to one-third of the deceased spouse's augmented estate. You asked a simple question, but it has a complicated answer. Related: 'I have Type 1 diabetes': I'm 64 with a $1.3 million 401(k). Is it too late for long-term-care insurance? My therapist said he was in-network. My insurance says he's not. Am I obliged to pay out-of-network rates for all prior sessions? Can my husband contest his late brother's $600K will? He experienced oxygen deprivation due to COPD before he died. I have early Alzheimer's and my husband has stage 4 kidney disease. We just inherited $50K. How can this help us? Will your spouse automatically inherit your 401(k)? 10 stocks favored to gain up to 30% in a sector that has missed this year's rally I'm trustee of $65,000 going to my nephew. What are the rules for what I can do with the money? 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Health Line
17-07-2025
- Health
- Health Line
Divorced Spouse Eligibility for Medicare
You're eligible for Medicare if your current or former spouse has worked in the United States and paid taxes for at least 10 years. Whether or not you'll pay a premium for Part A depends on a few more factors. Original Medicare includes Part A, which is hospital insurance, and Part B, which is medical insurance. Once you qualify for Part A, you can also sign up for Part B. If you're married or were married to someone who meets the eligibility criteria, you should still qualify for Original Medicare, even if you don't meet the requirements yourself. That said, depending on some criteria, you may have to pay a premium for Part A. Read to learn how you can qualify for Medicare after divorcing a beneficiary spouse and what you need to know about potential costs. Can a divorced spouse get benefits from Medicare? Generally, you're eligible for Medicare if you're over 65 or younger and receive Social Security Disability Insurance (SSDI) as long as you've worked in the United States and paid taxes for at least 10 years. However, if you're divorced and ineligible for Medicare, you may still qualify for Medicare through your former spouse's eligibility, provided your marriage lasted at least 10 years. Similarly, if you're widowed, you can qualify for your deceased spouse's Medicare if you are currently single, were married for at least 9 months before their passing, and they qualified for Social Security benefits. How do I qualify for divorced spouse benefits? If you were married to your beneficiary spouse for at least 10 years, you're also eligible for Medicare. However, most people don't pay a premium for Part A. Whether you'll have to pay it depends on your former spouse's work and tax history as well as a few other factors. You can receive Medicare Part A without any cost at the age of 65 based on your former spouse's work history if you fulfill these requirements: Your marriage lasted a minimum of 10 years. You're currently not married. Your former spouse is at least 62 years old and qualifies for Social Security or Railroad Retirement Board (RRB) benefits. You qualify for Social Security benefits through your former spouse's work record, even if you haven't applied for them yet. If your former spouse has passed away, you may still be eligible for premium-free Part A as a divorced surviving spouse if: You're 65 years old or older, or you're younger and meet disability eligibility criteria. Your marriage lasted at least 10 years. You're currently unmarried. Your former spouse had sufficient work history under Social Security or in a Medicare-covered government job. If you don't meet these criteria, you can still get Part A by paying a monthly premium during specific enrollment periods. Even if eligible through your former spouse, you must enroll separately. How much does Medicare cost if I'm divorced from my spouse? Even with premium-free Part A, you'll still have to meet a deductible before you get coverage. In 2025, this is $1,676. Once you're eligible for Part A based on your former spouse's eligibility, you are then eligible to purchase Medicare Part B (medical insurance) for a monthly premium, which in 2025 starts at $185. You then also have the option of signing up for Medicare Advantage (Part C), which is an alternative to Original Medicare (parts A and B), and for Medicare Part D, which covers prescription drugs. The costs of these privately run plans vary by plan. As with Part A, each spouse must enroll and pay for their own Medicare Part B, C, or D plan. Takeaway Original Medicare consists of parts A and B. If you're divorced from someone who meets the eligibility criteria, you should still qualify for Original Medicare as long as your marriage lasted 10 years, even if you don't meet the requirements yourself. However, depending on how your former spouse qualifies for Medicare, you might need to pay a premium for Part A. After obtaining Part A, you can enroll in the other parts of Medicare. The information on this website may assist you in making personal decisions about insurance, but it is not intended to provide advice regarding the purchase or use of any insurance or insurance products. Healthline Media does not transact the business of insurance in any manner and is not licensed as an insurance company or producer in any U.S. jurisdiction. Healthline Media does not recommend or endorse any third parties that may transact the business of insurance.
Medical News Today
17-07-2025
- Health
- Medical News Today
What should caregivers know about Medicare?
When a person cares for someone eligible for Medicare, it's important to ensure they have the right permissions, information, and contact details to help manage their care Medicare's different coverage rules is important for caregivers, but there are also some other things to consider, such as enrollment periods, when to review coverage, and whether financial help may be before these things, it's essential a person has the right medical permissions to manage their loved one's care. This caregiver guide will help people navigate Medicare and provide some important contact the right Medicare permissionsMedicare cannot discuss anything with anyone other than the beneficiary unless they have the correct permissions. This includes discussing everything from medical information to claims and ensure a person has the right permissions, the beneficiary must complete the authorization to disclose personal health information release form, which is also available in Spanish.»Learn more:Becoming a healthcare power of enrollment periodsMedicare has various enrollment periods to become familiar enrollment periods are:initial enrollment period (IEP)open enrollment period (OEP)general enrollment period (GEP), also called Medicare Advantage open enrollment period (MA-OEP)special enrollment period (SEP)Initial enrollment period (IEP)Everyone eligible for Medicare has a 7-month initial enrollment period (IEP).During this time, they can enroll in Original Medicare, which includes Part A inpatient hospital coverage and Part B outpatient medical IEP:starts 3 months before a person's 65th birth monthcontinues throughout their 65th birth monthends 3 months after their 65th birth monthOpen enrollment period (OEP)Medicare's OEP runs between October 15 and December 7 each open enrollment, people can change their Medicare coverage. For example, they can:swap from Original Medicare to a Medicare Advantage planswap from Medicare Advantage to Original Medicareenroll in, leave, or switch Part D prescription drug planschange from one Medicare Advantage plan to anotherGeneral enrollment period (GEP)If people miss their IEP, they can enroll during the GEP, which runs between January 1 and March 31 each year. However, they may have to pay a late enrollment penalty unless they are eligible for a special enrollment a person already has a Medicare Advantage plan, they can change from one Medicare Advantage plan to another or leave a Medicare Advantage Plan and return to Original returning to Original Medicare, people can also choose to join a stand-alone Medicare Part D prescription drug plan to ensure their medications are enrollment period (SEP)If a person misses their IEP, they may be able to enroll during a special enrollment period or are several reasons a person may qualify for a SEP, including:having alternative coverage that is coming to an end, such as through an employerreturning to the United States after living abroadtheir plan's Medicare contract ending or changing»Learn more:Medicare enrollment to know plan documentsCaregivers can familiarize themselves with the Medicare & You handbook, which Medicare updates every handbook details general Medicare coverage rules, costs, plan rules, and any changes that affect coverage for the new calendar also find information on a person's rights, appeals processes, and where to get answers to common Medicare a person has a Medicare Advantage plan, caregivers should ensure that the private insurer administering the plan has sent the plan documentation, which details its own plan rules and the coverage options assistanceMedicare offers people and their caregivers educational help and support when navigating the healthcare support includes:Principle illness navigation services: This care management service helps people understand specific medical conditions and guides them through the healthcare system they care management services: This service covers condition-specific management for complex chronic conditions that may result in hospitalization, physical or cognitive decline, or end-of-life care management services: If a person has two or more chronic conditions that they expect to last for at least 1 year, Medicare may pay for a healthcare professional to help manage their care specifically for these care services: To try and avoid unnecessary tests, services, and medical errors, Medicare offers care coordination services to ensure medical information is shared across a person's healthcare team, including with the facilities involved in their care. This ensures it is the most effective care possible. Coordinated care services include: Accountable care organizations (ACOs) include doctors, healthcare professionals, hospitals, and healthcare facilities. They all accept Original Medicare and work together to coordinate a person's care. ACO Realizing Equity, Access, and Community Health (ACO REACH) helps different kinds of primary care doctors and specialists work together to improve healthcare quality and results under Original services may be available based on a person's exact needs. To find out more, caregivers can contact Medicare or the person's plan servicesBoth Original Medicare and Medicare Advantage plans offer many free preventive services. This includes services that do not require payment of out-of-pocket costs like deductibles, coinsurance, and list is comprehensive and may not include all available options, particularly if someone has a Medicare Advantage plan, as these plans typically include additional services that Original Medicare does not assistanceMedicare may be able to offer some help to those with low income and options may include:Medicare Savings Plans (MSPs): There are four different MSP types, each offering different savings. The programs are: Qualified Medicare Beneficiary (QMB) programSpecified Low-Income Medicare Beneficiary (SLMB) programQualifying Individual (QI) programQualified Disabled and Working Individual (QDWI) programExtra Help: This program helps people with the costs of their prescription Medicaid is a joint state and federal program that helps with healthcare costs. Some people may be dually eligible for both Medicare and Medicaid. Sometimes, Medicaid may cover some or all of the costs that Medicare does not local programs may also help with healthcare costs, so caregivers should always check with the beneficiary's local state department for informationCompiling a list of contacts can help caregivers know who to contact and when. They can start by compiling a list of their loved ones:family doctor or primary care doctornearest hospital, clinic, or other healthcare facilitynearest or preferred pharmacyOther important contacts include:Medicare800-633-4227 (TTY: 877-486-2048)Lines are open 24/7, except for some federal mailing addressMedicare Contact Center OperationsPO Box 1270Lawrence, KS 66044milConnect800-538-9552 (TTY: 866-363-2883)Alternatively, use this helpful web tool to find a local contact details are for members of the military and can help them identify military benefits and locate local military benefits Retirement Board (RRB)877-772-5772 (TTY: 312-751-4701)Automated services available 24/7Social Security Administration (SSA)register, enroll, and manage accounts via the SSA those unable to access online services: 800-772-1213 (TTY: 800-325-0778). Lines are open between 8 a.m. and 7 p.m. local time each Health Insurance Assistance Program (SHIP)877-839-2675This service offers tailor-made Medicare and other health insurance advice.U.S. Department of Veterans Affairs (VA)health benefits hotline: 877-222-8387Lines are open between 8 a.m. and 8 p.m. ET on can support Medicare beneficiaries in many ways, and it is vital to ensure they have all the information they need or know where to find the right permissions to manage Medicare on behalf of a beneficiary should be the first thing a caregiver does so that they don't experience any barriers when discussing about the different Medicare enrollment periods, coverage options, rules and procedures, and the financial help that may be available will ensure caregivers have everything they need to manage any Medicare plan.
