Setting Up Income from an Annuity

I'm still new (4 weeks now) so I have a question about properly entering annuity income. Originally, I set the income up as a monthly income payment (out of "thin air"), with a split, so the total income was reported and tax was split out. This way, the net income agreed with my monthly automatic deposit and the tax was accounted for as well. I just realized that, to properly show the entire picture, I needed to add a new account (AIG 10 Yr Annuity) which shows the funds currently in the annuity and the monthly payment should be a transfer from the Annuity account, to my bank account. I added the Annuity account, set the opening balance to today's balance, and edited the scheduled monthly income transaction by going to the Category/Splits box, and filling in the new AIG 10 Yr Annuity in the Transfer field (3rd column in the Splits dialog). Did I do this correctly so each month, when the annuity deposit comes in, it will transfer the amount from the AIG account, to my bank account?

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  • Moskose
    Moskose Member ✭✭
    Thanks for the quick reply! Yes, your summary of the accounting is correct. The only detail to add is, in the Q Mac app, when I realized I needed to add the annuity account and show the deposit to the bank account as a transfer, I thought I might need to delete the scheduled "income" transaction but when I opened the Splits dialog, there was a column noted as "Transfer" and when I clicked in this field, a list of my accounts opened and all I needed to do was select the Annuity account. This was so easy to do that it felt like it was the correct way to do it. I'll know for sure when the next transaction automatically runs per my schedule and I'll check to make sure the amount was deducted from the annuity account. Thanks!
  • Frankx
    Frankx SuperUser ✭✭✭✭✭
    That sounds like you're all setup.  Happy to help - take care!

    Frankx


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  • Moskose
    Moskose Member ✭✭
    GREAT build Tom - I will check this as well! The next disbursement is due on Oct 29.

    The account it transfers from was set up as an IRA so, hopefully, Quicken will recognize this as income. The original transaction was set up as an income transaction, then I was able to add the transfer "dimension" in the Splits dialog and select the Annuity IRA account as the source of the transfer.

    Thanks!
  • Moskose
    Moskose Member ✭✭
    PS - My understand on the annuity value is that the face value is the "fixed" max value on the day I bought the annuity and all the interest and appreciation earned goes to AIG, who sold the annuity to me - they will pay out the face value over 10 years and the rest is theirs. The online account reflects the current value as the original amount, less the disbursements.
  • Moskose
    Moskose Member ✭✭
    OK, the PS was confusing because the actual payout does include some interest/appreciation but this was defined in the original contract, and the monthly payout schedule increased a bit as we waited an extra year to start taking disbursements. The annual statement I get from AIG shows the disbursements as income to me. I'll compare the 2020 about to what Quicken shows at year end to see if anything else is added to the income that I don't see on the monthly payment. Thx!
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