Spouse inherits pension from Verizon
My client who worked for Verizon and has a pension, passed due to COVID 19.. His wife is entitled 65% of his money in pension as a lump sum. if I want her to have best options as a surviving spousal beneficiary, please suggest how she should transfer this money so avoids early penalties if income is needed? which type of IRA will give her more flexibility. don’t want to just roll it as if it’s her own. thanks in advance…
Shawn D
Permalink Submitted by Alan - IRA critic on Tue, 2021-06-22 15:20
When did client pass? What is the current age of surviving spouse? There is no option for the spouse to receive a monthly pension for life, just the lump sum?
Permalink Submitted by Shawn Danziger on Tue, 2021-06-22 15:26
I beleive spouse has option of a pension as well but would rather rollover for various reasons.. age of surviving spouse is under 59 1/2… have to check actual.
Permalink Submitted by Alan - IRA critic on Tue, 2021-06-22 15:48
If under 59.5, if there is any potential need to draw on this money before 59.5, the direct rollover would usually be done to an inherited IRA to avoid a 10% penalty on any distributions. She could then assume ownership of that inherited IRA upon reaching 59.5. If directly rolled to an inherited IRA, her beneficiary RMDs would not begin until the year her spouse would have reached 72 if he was born after 6/30/1949. If born prior to then, age 70.5.
Permalink Submitted by Shawn Danziger on Tue, 2021-06-22 23:26
thanks for you reply..