Annuity

aLfGordon

I have a SPIA. Each month obviously the value will decrease. I made a spreadsheet to figure the interest/ principal drain. Now each month as I get "paid" from the SPIA, I will need to accrue the interest for the month along with a "withdrawl" from the principal (death benefit).

Is there a way to program Quicken to do this, or am I stuck just taking the number from my spreadsheet and ledger it in as a payment/income reminder…

Thanks.

Tom Young

I'd think you might be able to do this in Quicken. In effect you're treating the annuity as a loan to somebody else, and I'm assuming the "term" of the loan is set as your current life expectancy.

Go into Quicken Help and type in "How do I set up a loan for which I am the lender?" for the step by step process, and see if that works.

Having never investigated an SPIA I'm kind of assuming the contract is as simple as "here's $X insurance company, now pay me $Y each month until I die." If it's more complicated than that, e.g., inflation adjustments, then this might not be possible.

aLfGordon

Also need help in how to show the "transfer" of $ from the SPIA monthly as "income" rather than a transfer. Part of the $ generated from the SPIA is a simple transfer of assets, the remaining as questioned above is interest acrrued through the term of the annuity (in this case 10 year certain). I'd like my income expense graphs to show the income produced by the SPIA.

Tom Young

Transfers can be shown as a form of "income" - FROM (Name of Account) - or "expense" - TO (Name of Account) - on reports. Generally the concept is not allow the annuity Account to "feed" information to the report, but then select the annuity Account as a "Category" to be shown on the report.

Your monthly entry of

Debit (increase) Cash in Bank $X
Credit (decrease) Annuity $X

includes the interest element so if you leave the annuity Account feeding information to the report, you're double counting the interest inome.

aLfGordon

Gonna have to think about that. As Frank Sinatra would say "you had me until you lost me"!

aLfGordon

I get the interest accrual. Just post interest first in the SPIA account, then - SEnd the $ to the checking…

If I "from" the annuity $5,000 (as a simple transfer), then how do I make it income?

Tom Young

Exactly as I said. The annuity Account is made a "Category" by selecting it under the Categories tab of the report's Customization screen and the annuity Account is not included as an Account "feeding" the report by deselecting it under the Accounts tab. Then you also have to turn on transfers under the Advanced tab. You'll probably have to also deselect other Accounts in the file as "Categories" as "out of the box" all Accounts are selected as Categories by Quicken. Fine-tuning of the selection of transfers like Exclude Internal and Exclude Self-Transfers can also be helpful. You'll certainly have to play around with it a bit to get what you want and exclude what you don't want.

The transfer of the money from the annuity - "principal" and interest - should show up as a one-line form of "income", like this:

This represents the transfer from my spouse's inherited IRA, and the report excludes dividends and interest the IRA earned during the period.