What is her gross income from the annuity payments

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Problem - Pam retires after 28 years of service with her employer. She is 66 years old and has contributed $42,000 to her employer's qualified pension fund. She elects to receive her retirement benefits as an annuity of $3,000 per month for the remainder of her life.

a. Assume that Pam retired in June 2018 and collected six annuity payments that year. What is her gross income from the annuity payments in the first year?

b. Assume that Pam lives 25 years after retiring. What is her gross income from the annuity payments in the twenty-fourth year?

c. Assume that Pam dies after collecting 160 payments. She collected eight payments in the year of her death. What are Pam's gross income and deductions from the annuity contract in the year of her death?

Reference no: EM132665902

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