nonqualifed annuity
I have a client with $60,000 in a NQ annuity (liquid-no surr charges). She lost her husband 3 yrs ago.
She has 4 kids, ages 10 and under and is having some hardships with income.
Is there any IRS rulings that would allow her to take an income from the NQ annuity without the 10% penalty due to hardship?
any help would be apprec.
Douglas
Permalink Submitted by Alan Spross on Fri, 2008-03-28 20:42
Douglas,
It sounds like she did not inherit the annuity.
There are no hardship type exceptions under 72(q), unlike the IRA exceptions such as medical, insurance premiums, education etc. It also sounds like she is too young to consider a 72q plan (SEPP) or immediate annuity.
This is another reason why such an investment may not be well suited to this person.
Permalink Submitted by Al Fry on Sat, 2008-03-29 23:37
Did she purchase the annuity, or was it her husband’s? Al
Permalink Submitted by [email protected] on Mon, 2008-03-31 15:57
she purchased it. She still has money in a mutual fund account. However, i wanted to know just in case that amount wasn’t enough for her, could she tap the annuity without penalty.
douglas