Hunter retired last year and will receive annuity payments for life from his employer's qualified retirement plan of $30,000 per year starting this year. During his years of employment, Hunter contributed $130,000 to the plan. Based on IRS tables, his life expectancy is 260 months. All of the contributions were on a pre- tax basis. This year, Hunter will include what amount in income?

Question

Quizplus · Accepted Answer

Hunter will include the entire $30,000 in income because his contributions were made on a pre-tax basis, meaning he has no basis to recover tax-free.

Hunter Retired Last Year and Will Receive Annuity Payments for Life