Inherited IRA annuity
Susan recently passed away at the age of 93. The sole beneficiary of her two IRA fixed annuities is Jennifer, her daughter, who is 70. Under current rules, what options does the daughter have with her mother’s IRAs? She doesn’t need the money, so she doesn’t want to cash surrender the annuities. Can the daughter transfer the funds into her own IRA, or do these funds need to be kept separate? Does the daughter need to start taking RMDs based on her own life expectancy? Can she annuitize these funds over her lifetime, or is there a 5 or 10-year rule she needs to consider?
Opinions and recommendations are appreciated.
TB
Permalink Submitted by Alan - IRA critic on Tue, 2024-08-06 17:26
Only a spousal beneficiary can roll over to their own IRA. Jennifer must maintain the inherited IRA annuity and must complete her mother’s 2024 RMD if mother did not do so. She will also have to take annual beneficiary RMDs in years 1-9 of the 10 year rule and drain the account by the end of 2034. Therefore, she cannot annuitize the inherited IRA annuity over her life expectancy. She may be able to annuitize it over the 10 year period if the insurance company offers that option.