Tax Planning for Required Spousal Annuities Under Qualified Retirement Plans and TSAs
20 Pages Posted: 16 Nov 2007 Last revised: 22 Jan 2016
Abstract
A qualified retirement plan must generally provide a lifetime annuity to an employee's surviving spouse unless the employee and spouse agree to waive the annuity. If they do waive the annuity, payment of plan benefits depends on other available plan options. This article discusses the spousal annuity requirements and the tax consequences of receiving or waiving a spousal annuity, primarily from the perspective of employees and their spouses. Tax planning for spousal annuities revolves mainly around (1) changes in the timing and form of benefit payments, (2) a spouse's refusal to consent to the waiver of an annuity, (3) marriage or divorce, and (4) the distribution of an annuity.
Suggested Citation: Suggested Citation