When adding an annuity as an asset in the Profile > Net Worth section of a client plan (or when proposing an annuity purchase in the Retirement > Analysis section) you can use the Distributions drop-down box to illustrate how money will be withdrawn from the annuity. Distribution options include regular withdrawals, annuitization, and lifetime income:
The second of these options is Annuitization - with this option selected, the account value of the annuity will be surrendered in exchange for a guaranteed fixed income stream. Selecting this option will automatically populate new fields within your annuity entry, allowing you to enter the details of the annuitization:
Income starts - enter the year the client plans to annuitize. In that year RightCapital will annuitize the account, liquidate the annuity value, and add annuity income based on the additional parameters set:
Income type - can be either percentage or amount:
- Percentage - reflects that the income amount will be calculated as a percentage of the total accumulated annuity account value.
- Amount - reflects that the income will be the specific amount entered.
Annual increase - indicates whether, and if so, by how much, the income amount increases each year after annuitization. This can reflect a cost of living adjustment (COLA) option or any guaranteed increase.
Single/Joint - indicates whether the surviving client would continue receiving the lifetime income benefit from the annuity. Single annuitization will pay until the end of the card owner's plan, while joint annuitization will pay until the end of both plans. Only applicable for Life only or Certain/Life annuities (see below).
Type - indicates the period for which the annuity income will last. Users who select Life only or Certain/Life will see another input asking if it is based on Single/Joint life.
- Certain only - reflects payment for a specific duration. If selecting 'Certain only', input the year that income should end in the Guaranteed Period field that appears to the right.
- Certain/Life - reflects payments for the longer of either the client's life or the period indicated.
- Life only - reflects payment for the life of the owner(s) of the annuity.
After filling out the above fields and clicking Save, the annuity income can be found in the Retirement > Cash Flows > Summary page, within the Income Inflows column. You will also see the annuity value being surrendered in the year the income stream begins, within the Accounts > Ending Balance by Accounts page:
