Inherited After Tax Annuity

Submitted by Heidi Quinn on Wed, 2024-02-28 15:47

Hi
I inherited a TIAA after tax annuity from my father in 2022. TIAA is dispering the payments over my lifetime (I am 65). Is this correct? TIAA tells me my divisor is something like 21.

Do I still have to deplete the account in 10 years? Witih a divisor of 21 that won’t happen. Is this a case where the financial instituion does not determine how RMDs are drawn? And that its the recipients responsibility?

Thanks in advance.
Heidi



Submitted by Alan - IRA critic on Wed, 2024-02-28 16:06

They may be using the old RMD table, where 21 would have been your 2023 divisor if you reached 65 in 2023. Since this is not an IRA annuity, the insurance company determines what your distribution options and requirements will be. Generally, if the company uses the IRS RMD tables, unless you were much older the RMDs would still leave you with a much larger distribution in 2032. Further, the current IRS RMD tables result in slightly lower RMDs (higher divisor) than the old tables, and those would leave you with even a larger final distribution in 2032. I can provide the 2023 and 2024 divisors if you confirm what your age was at the end of 2023.

Submitted by Heidi Quinn on Fri, 2024-03-01 19:16

thank you for your quick response.I was 65 at the end of 2023 so the divisor sounds right. But you seem to say that whatever divisor used, I still have to deplete in 10 years. Is that correct.? Even though you say its not an IRA annuity?Please confirm which divisor is correct.Heidi

Submitted by Alan - IRA critic on Fri, 2024-03-01 20:02

Since this annuity is not in an IRA, the plan is not subject to the IRS RMD rules. Rather, they have their own rules. You may or may not have to deplete in 10 years. While they appear to be using the IRA RMD tables, you will have to ask them if the annual RMDs can stretch beyond 10 years or not.

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