Roth IRA - qualified distribution. Qualified distributions from Roth IRAs are exempt from taxes and penalties. For a distribution to be considered "qualified", both of the following requirements must be met:
- Roth IRA must satisfy a five-year waiting period that begins with the first taxable year the Roth IRA holder made a contribution to any Roth IRA, and
- Distribution must occur after one of the following events:
Age 59 1/2,
Permanent and total disability,
Purchase of a first home, or
Death
Roth IRA - nonqualified distribution. Nonqualified distributions from Roth IRAs are withdrawn in the following order:
- Contributions made (non-taxable upon withdrawal)
- Conversion amounts (non-taxable upon withdrawal if taxes were already paid upon conversion)
- Income (taxable upon withdrawal)
If you are under age 59
1/
2 when the withdrawal is made, you may be subject to a 10% penalty tax for early withdrawal.
Tax Shelter Annuity (TSA). Generally, distributions from a TSA are taxed as ordinary income in the year the withdrawal is taken. If you are under age 59
1/
2 when the withdrawal is made, you may be subject to a 10% penalty tax for early withdrawal. [
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A 1035 exchange is the exchange of an insurance contract for another that meets all the requirements of Section 1035 of the Internal Revenue Code (IRC §1035). When a contract is exchanged under IRC §1035, the gain or loss of the exchanged contract is transferred to the new contract.
Only the following types of exchanges will qualify for non-taxable treatment:
| FROM: |
TO: |
| Life insurance policy |
Life insurance policy; nonqualified annuity contract |
| Endowment contract |
Nonqualified annuity contract |
| Nonqualified annuity contract |
Nonqualified annuity contract |
The other requirements for non-taxable treatment include:
The owner and insured/annuitant on both contracts must be identical.
The contract being exchanged must be in force. If the contract is maturing, the 1035 exchange request must be signed prior to the maturity date.
The entire value of the existing contract must be exchanged. If any cash is received, the taxable gain up to the amount of cash received is taxable.
Please call us at 1-800-798-6600 to discuss what constitutes a valid 1035 exchange, who qualifies, and the forms you'll need to complete an exchange. [
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The length of time it takes to receive your money will depend on the time at which the request is received and the delivery method that you choose.
Requests received prior to 3:00 p.m. Central Time are processed within 3 calendar days. Requests received after 3:00 p.m. are considered received the next business day and will be processed within 4 calendar days.
Delivery methods available include:
| Method |
Time |
Charges |
| Check - sent via U.S. Postal Service |
Sent the day after request is processed. Receipt depends on U.S. Postal Service. |
None |
| Check - sent via Overnight Delivery Service |
Sent the day after request is processed. For most areas, you will receive the check the next business day. Some remote areas take 2 business days. |
$25.00 |
| Wire to your account |
Funds will be credited to your account the day after we process your request. We need the name of your financial institution, routing and account numbers, type of account (savings, checking, or share draft), and names on the account. |
$25.00 |
| Electronic Funds Transfer |
Funds will be credited to your account within 48 hours (business days) after your request is processed. We need the name of your financial institution, routing and account numbers, type of account (savings, checking, or share draft), and names on the account. |
None |
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Yes, if more than one beneficiary is named, proceeds will be split equally among the named beneficiaries unless otherwise indicated. Benefits can be designated in varying amounts. Please call us at 1-800-779-5433 (if your policy was purchased by mail or phone) or 1-800-798-6600. (if your policy was purchased through a local representative) Monday through Friday - 7 a.m. to 7 p.m., CT. [Return to Top]
Life insurance proceeds are not taxable.
The gain portion of annuity proceeds is taxable to the beneficiary when it is distributed. There are several ways to defer the gain. Contact us for more information on specific settlement options available. Our telephone number is 1-800-779-5433, ext. 3351 (if your policy was purchased by mail or phone), or 1-800-798-6600, ext. 3351 (if your policy was purchased through a local representative). [Return to Top]
The first deduction may not occur on the day you selected. We will send you a confirmation letter notifying you before the first deduction occurs. Thereafter, a draft will be sent on the specific day of the month you requested account deductions. If no draft day is designated, we will determine the date deductions will be sent based on the policy due date. Actual deduction from your account will occur 2 business days after the draft is sent, or longer if a holiday. Ex: you selected the 1st of the month for account deductions; if the 1st falls on a weekend, we will send the draft on the next business day, and the deduction will occur 2 business days later. [Return to Top]
Call our contact center at 1-800-779-5433 (if your policy was purchased by mail or phone) or 1-800-798-6600 (if your policy was purchased through a local representative) from Monday through Friday - 7 a.m. to 7 p.m., CT for a surrender form. Because of the importance of this decision, including possible surrender charges and taxation, an original surrender form signed by the contract owner is required to surrender the annuity. [Return to Top]
Forms & FAQs for All Products
Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free (800) 369-2862. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America. The Representative may also be a credit union employee that accepts deposits on behalf of the financial institution.
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©1997-2009 CUNA Mutual Group.
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