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Cantex anuities payout, is it possible? I worked for cantex several years ago. I am retired and age 63 at present time.

I want a total buy out but am not eligible to begin receiving payments until age 65. It has an cash value of only 6800. I am willing to take liquidation at 5000. Is this possible?

Mar 09, 2014 by JAMES from Tuskahoma, OK in  |  Flag
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James - just call Cantex and ask them.

Comment   |  Flag   |  Mar 09, 2014 from Canton, GA

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Hello James,

If the Cantex retirement plan requires that you wait until age 65 to begin receiving an annuity payout but you need the money now, you have a couple of options.

First, you could have the plan administrator cash you out (called a full "distribution"). The account balance at the time of cash-out is what you're owed...there is no lesser negotiated amount (i.e. $5,000 in your question). And your account balance at the time of distribution is the amount that you would have to claim as taxable income for federal and Oklahoma tax purposes.

Typically, the plan administrator will need to withhold 20% federal income tax and send that to the IRS.. I'm not certain if the plan administrator will have to withhold Oklahoma tax, so you'd want to check that before proceeding. After the taxes are withheld, the remainder is what would be sent to you.

Another option would be to directly roll the Cantex plan balance to an IRA. If it's a direct rollover, then the full account balance would transfer with no taxes withheld. From there, you could distribute the full balance or set it up for periodic payments now without waiting until 65. You'll still have to claim whatever amount you distribute from the IRA on your federal and Oklahoma income tax returns, but this option gives you a bit more control over the tax issues. The drawback is you incur additional IRA administration and termination fees that you wouldn't have if you simply distributes your balance directly from the Cantex plan.

Hope that helps!


Comment   |  Flag   |  Mar 09, 2014 from Clackamas, OR

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