Handling Single Premium Immediate Annuity
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.
Answers
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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.
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Now running Quicken Windows Subscription, Business & Personal
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Yes it can go to zero, and the declining value is still an asset supporting monthly payments. How did you set it up?
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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.
Q user since February, 1990. DOS Version 4
Now running Quicken Windows Subscription, Business & Personal
Retired "Certified Information Systems Auditor" & Bank Audit VP0 -
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?
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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
Q user since February, 1990. DOS Version 4
Now running Quicken Windows Subscription, Business & Personal
Retired "Certified Information Systems Auditor" & Bank Audit VP0
