Would liquidating a nonqualified annuity with over $1 million in gains lower my monthly Social Security check?

by Paul K. Rudoy, CPA, PFS | Aug 15, 2019

I'm 80 years old and have been fully retired since age 62. If I liquidate a nonqualified annuity that has over $1 million in gains, will this lower my monthly Social Security check?

This will not change your Social Security check, but it could increase the cost of your monthly Medicare premium and increase the amount of federal income tax you pay on your Social Security benefits. You may want to consult with your CPA to do some financial modeling to determine the best financial plan based upon your specific circumstances. 

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Answered by: Paul K. Rudoy, CPA, PFS, is managing partner of H2R CPA in Pittsburgh, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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