IRA Immediate Annuity (income stream for life)
Can someone direct me to the tax code that states it is unlawful to sell your IRA annuity to an investor (settlement company)? I have never seen this rule but I have to assume it exists. I cant see how one could sell their IRA with all the beneficiary rules and the transferring of tax liability.
Thanks in advance!
-Nick
Permalink Submitted by Alan - IRA critic on Wed, 2019-06-19 19:13
The IRA cannot be sold which eliminates investor involvement, but an immediate IRA annuity could probably be cashed out by the insurance company if they wanted to, with the lump sum remaining in the IRA annuity, which would then have to be transferred to a non annuity IRA unless the IRA owner wanted a deferred IRA annuity with the same insurer. Of course, any lump sum would be paltry as the insurance company would probably consider the IRA owner to now have a very limited life expectancy. Involvement with outside investors such as Wentworth or others is probably impractical and may not be allowable in some states. However, I don’t know if there is any federal tax law that limits an IRA immediate annuity cash out. As part of the pension de risking process, in some cases a retiree collecting a life pension is offered a lump sum in lieu of continuing the life pension, which is similar to cashing out an IRA immediate annuity with a lump sum except that in the case of the IRA, the IRA owner initiates the cash out instead of the insurance company.