Missing this deadline triggers immediate income taxes and a 10% penalty if you're under 59½. ✅ Pros and Cons
: You transfer funds from your 401(k) into a traditional or Roth IRA that holds the annuity contract. can i buy an annuity with my 401k
: Moving pre-tax 401(k) funds into a "qualified annuity" keeps the money tax-deferred until withdrawal. Drawbacks Missing this deadline triggers immediate income taxes and
: Protects against "longevity risk" (outliving your money). can i buy an annuity with my 401k
There are two primary ways to move 401(k) funds into an annuity:
The administrator sends you a check (often with 20% withheld for taxes).