Handling Single Premium Immediate Annuity

Rob Sills

How do I enter a Single Premium Immediate Annuity so that I reflect its asset value in my account. This is a single life annuity with payments guaranteed for 20 years, so its asset value declines each month by the payment I receive. I'd like to enter the purchase price of the annuity and automatically debit it monthly to reflect this payment. Thanks in advance to anyone with an answer.

NotACPA

Can the value of the asset ever go to $0? If not, what does the decline in value actually mean?

I have an annuity that a former employer purchased when they converted their prior retirement plan. Yes, it has a current value, and yes I decline that value every month … but when the current value is exhausted I'll start using an Income category for the amount received.

Rob Sills

Yes it can go to zero, and the declining value is still an asset supporting monthly payments. How did you set it up?

NotACPA

When that Asset account gets to $0, DON'T continue to use the account. Instead, switch to using an Income CATEGORY.

My annuity is set up as a non-tax-deferred Asset type account, and the account balance will fall to $0 with the October 2025 payment. My checking account transaction for that month will be split with part coming from the annuity account (taking it to $0) and the balance from Income.

You DON'T want the asset account to go negative as that's an oxymoron.

UKR

For me, if I were ever lucky enough to be on the receiving end of such an annuity, I would simply record the incoming deposits as a monthly Scheduled Reminder, like a paycheck, with a reminder End Date set in 20 years from now.

The total amount of the annuity payments may be an asset, but I don't have it in my hands yet, so why inflate my Net Worth?

NotACPA

https://community.quicken.com/discussion/comment/20458781#Comment_20458781

But the OP originally paid to receive that Annuity … so it pretty much must be an asset account. Otherwise, that initial payment would be an expense