Tracking an Annuity in Quicken.

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What is the best way to keep track of an annuity? I can download transactions from my Brokerage. I have an investment in the brokerage account but the annuity doesn't show up when I download transactions. should I keep it in a bank account?

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  • NotACPA
    NotACPA SuperUser ✭✭✭✭✭
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    I received an annuity when a former employer liquidated their Defined Benefit Retirement plan.

    The annuity is recorded in Q as an Asset type account (since I don't get any statements about it). But a banking type account would work as well.

    Every month I record a transfer from the annuity to my checking account. 22 months from now the Asset will be depleted, so that last (22nd) payment will be split with the balance coming from an Income type account.

    The Income type transactions will continue for the remainder of my life.

    Q user since February, 1990. DOS Version 4
    Now running Quicken Windows Subscription, Business & Personal
    Retired "Certified Information Systems Auditor" & Bank Audit VP

  • Richard Esser
    Richard Esser Member ✭✭
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    I get a statement quarterly. I haven't taken anything out of the annuity since I opened it in 2013. It pays interest. I also use Quicken subscription.

  • Richard Esser
    Richard Esser Member ✭✭
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    Should I use an offline account?

  • Richard Esser
    Richard Esser Member ✭✭
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    Our Annuity was bought through a bank using Raymond James. I tried using a brokerage account but that doesn't work because I can't download transactions. I could enter the interest from the annuities manually. Bank or brokerage Quicken wants to connect to an account.

  • NotACPA
    NotACPA SuperUser ✭✭✭✭✭
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    OK, your annuity is in the Accumulation phase of it's life (mine isn't), so an offline banking type account would work for you.

    At some years in the future, when the annuity is depleted, you'll need to switch to receiving the payouts from an Income category, rather than driving the annuity banking account into negative territory.

    Q user since February, 1990. DOS Version 4
    Now running Quicken Windows Subscription, Business & Personal
    Retired "Certified Information Systems Auditor" & Bank Audit VP

  • Boatnmaniac
    Boatnmaniac SuperUser ✭✭✭✭✭
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    Annuities cannot be downloaded into Quicken. So, I set up an offline IRA Account for mine (and another file for my brother's).

    • Annuity distributions are usually treated by the IRS as deferred income, much like Pension and IRA distributions. An IRA account works really well regarding this.
    • Make sure the Tax Schedule for this account is set to 1099-R:Total IRA taxable distribution or 1099-R:Total pension taxable distribution. There is no Tax Schedule for annuity distributions in Quicken so these are the closest to it. This will ensure distributions get captured in the Tax Reports and Tax Planner.
    • I set up a custom security for the Annuity. (Mine is a USAA annuity so I named it "USAA Deferred Annuity".)
    • Then I funded the account by entering a buy transaction for this annuity security with a share price of $1.00 (just like with money market funds). For example: If the annuity is a $50,000 annuity, enter a buy of 50,000 shares at $1.00 ea.
    • Once a month I update the shares balance with a Reinvest - Income Reinvested transaction. For example, if the value of my annuity increased by $200 I would report that in the transaction as 200 shares reinvested @ $1.00 each. (I use dividend reinvestment but you could use interest reinvestment if you wish.)
    • When I take a distribution I treat it like I would any distribution from an IRA account: First, enter a Sell transaction for the pre-tax amount of the distribution with the proceeds deposited to the IRA account. Then, enter a deposit transaction to the deposit account with a split category. In the 1st line of the split, enter a transfer from the annuity for the full pre-tax distribution dollar amount as a positive number. In the 2nd line of the split (if appropriate) for Fed tax withheld as a negative number. If needed for state and local withheld tax, add additional negative dollar amount line items. The total of all the splits needs to equal the net deposit to the deposit account.

    This has worked really well for me. Hopefully you find it will work well for you, too.

    (Quicken Classic Premier Subscription: R55.15 on Windows 11)

  • markus1957
    markus1957 SuperUser, Windows Beta Beta
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    In my case I purchased an immediate annuity with a 15 yr. certain payout. I used a manual investment account and set up a security for the annuity. An IRA would not work for an immediate annuity because the payments received are a combination of interest earned and return of capital (premiums).

    I chose to set up the buy transaction for 1,000 shares with the price/share as the total purchase price/1,000. As payments are received, I enter a return of capital transaction and a taxable interest earned transaction in the investment account. The annuity issuer provided a schedule for those amounts over 15 years. After 15 years the payments received will be all interest.

    Finally, after each payment, I lower the price per share to reflect the return of capital and the updated net worth value of the annuity and enter a cash transferred transaction for the payment made into my checking account.

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