Non-spouse beneficiaries (2) inherit Individual Retirement Annuity from person past 70 1/2 and receiving minimum distributions. Annuity was long term, and was crediting 4% interest currently. Not a lot of money, about $50,000 split to two beneficiaries, both in high tax brackets unlikely to change soon. Beneficiaries in late 40's.
Options presented by insurance company seem to be:
Immediate payment and taxation
Five year deferral of total but annual Minimum distributions required
Transfer to another Individual Retirement Annuity
Some type of conversion to an annuity over beneficiary's lifetime with the existing insurer
The distribution paperwork is of course full of sales nonsense and legaleze, and is very unclear.
1. Transfer to a non-annuity IRA does not appear to be an option. Is this true, and if so why?
2. If converted to an annuity over the lifetime of the beneficiary, is this like an individual fixed immediate annuity where the insurer prices the annuity however it chooses, including interest, mortality, expense assumptions of it's choosing?
3. What other considerations are important to minimize taxes, commissions, and maximize return?
Edited by AndyH, 22 May 2013 - 08:31 AM.