inherited IRA distribution option
can a beneficiary of an inherited IRA put the funds in an immediate annuity with a lifetime payment? with annuitization beneficiary would receive almost twice as much annually from the annuitized funds and they would pay for his entire life.
Permalink Submitted by Alan - IRA critic on Mon, 2013-03-04 19:53
IRS guidance on this is not clear, but annuitization would probably be OK if you could find an insuror who would offer that option. There should only be more paid out by the annuity if beneficiary exceeds their life expectancy.
Permalink Submitted by Don Warnke on Mon, 2013-03-04 20:01
with this current situation the beneficiary is 49, IRA owner died this year, RMD say beneficiary will have to take approx. $3,400 as first distribution next year, the life annuity with refund option is going to pay $6400 starting year one. Since client needs income this seem like more attractive option.
Permalink Submitted by Alan - IRA critic on Mon, 2013-03-04 20:25
Let us know if you can find an insurance company who will annuitize an inherited IRA.
Permalink Submitted by Don Warnke on Mon, 2013-03-04 20:29
I have talked to the fixed annuity dept. at Country Financial (in Bloomington, IL) and they said they would.