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  • Inherited Annunity

    I just inherited an annuity from my grandma.  I believe the contributions were made pretax.  Am I right that my two options are:

    1) take as a lump sum and pay income tax on full amount

    2) Roll over into an inherited IRA and begin to take RMDs next year

    There are no other reasonable options correct?

  • #2
    You cannot r/o an inherited annuity from your grandma into an inherited IRA. You are required to distribute the balance over a period of 5 or fewer years. You may have the ability to stretch payments out over your lifetime but I'm not sure if that's available to "qualified" (pre-tax) annuities.

    We don't deal with annuities much - maybe one of the insurance guys can confirm the accuracy of my last statement.
    Financial planning, investment management and CPA services for medical professionals | 270-247-6087

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    • #3
      Sorry, she did not inherit it, it was hers originally ... I am inheriting it

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      • #4
        First, are you sure the annuity was held inside an IRA? Or, could it possibly be a non-qualified annuity? You never made this clear in your original post.

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