Permalink Submitted by Alan - IRA critic on Thu, 2019-09-26 14:32
Be sure you purchase CDs with a “death put” that allows the CD to terminate at your death with no early withdrawal penalty. That will produce the cash needed for the RMD, as beneficiaries are responsible to complete your year of death RMD if you did not complete it. If they choose to continue CDs in the inherited IRA, they should verify that the issuer with not charge early withdrawal on the RMD amount. For brokered CDs, they would have to sell a portion to meet their beneficiary RMD. Of course, if they inherit more than one IRA, they can satisfy the total RMD from any non CD investment. The stretch itself is not affected, just the mechanics of getting the RMD out without hassle or penalty.
Permalink Submitted by Alan - IRA critic on Thu, 2019-09-26 14:32
Be sure you purchase CDs with a “death put” that allows the CD to terminate at your death with no early withdrawal penalty. That will produce the cash needed for the RMD, as beneficiaries are responsible to complete your year of death RMD if you did not complete it. If they choose to continue CDs in the inherited IRA, they should verify that the issuer with not charge early withdrawal on the RMD amount. For brokered CDs, they would have to sell a portion to meet their beneficiary RMD. Of course, if they inherit more than one IRA, they can satisfy the total RMD from any non CD investment. The stretch itself is not affected, just the mechanics of getting the RMD out without hassle or penalty.