Roth IRA funded with lifetime annuity
I’ve received opposing opinions from various practitioners. If a lifetime payment annuity in a Roth runs out of money, are the payments still tax free?
I’ve received opposing opinions from various practitioners. If a lifetime payment annuity in a Roth runs out of money, are the payments still tax free?
Permalink Submitted by Alan - IRA critic on Wed, 2024-09-25 18:41
Yes. Are you referring to an insolvent insurance company, whose obligations are covered by a state guarantee fund? Such state guarantee payments should be made through the Roth IRA, which was the owner of the annuity, so they would be taxed like any other Roth distribution. All tax free if the Roth is qualified, and if not qualified the contribution basis comes out first, tax and penalty free.