iNHERTED 403B & 5-YR RULE
YOU MENTIONED IN A PREVIOUS EMAIL: Than an inherited 403b (or inherited IRA) RMD under the 5 year rule cannot be combined with an inherited plan using life expectancy.
We asked TIAA CREF for the 5yr rule on the inherited 403b. What TIAA gave a 5yr rule but annuitized the whole amount and made 5 equal installments to my client.
We wanted to do the 5yr rule and take the RMD amount but keep the rest invested in funds.
Is TIAA correct for what they did or could we have taking the RMD each year for 5yr and then taking the balance out prior to the 5th anniv of date of death?
Thank you,
Douglas
Permalink Submitted by Alan - IRA critic on Fri, 2015-03-06 20:17
If the 5 year rule is mandatory or elected, the beneficiary should be able to take out whatever amount they wish whenever they wish as long as the account is drained by by the end of the 5th year after the year of death. I suppose the plan could have a mandatory annutization rule, but more likely my guess would be that annuitization was requested as an option in error.