We’ve received some questions lately regarding joint ownership of an annuity, and why it can’t be done in qualified accounts. Joint ownership of an annuity allows two individuals, usually spouses, to co-own a contract, ensuring income continues for the survivor. This offers security in that it provides income for two people while either is alive. When the first owner dies, the survivor continues to receive payments. There are rules regarding taxes, beneficiary designations, and death benefits, and having joint owners in qualified retirement accounts is one where those tax rules come into play.
The reason relates to the fact that qualified retirement accounts exist because the IRS gives tax benefits to a single person, associated with one social security number, one contribution limit, and one date of birth, triggering RMD calculations. Joint ownership would instantly conflict with each of those associations.
However, there are alternative options to joint ownership if you are concerned with providing income to someone who survives you. Call us, we’re always here to help.