Stretching an IRA Annuity
Deceased owned an IRA/annuity that provides a lump sum payout of $80,000 and a 5 year payout of $100,000. The beneficiaries want to stretch the IRA. The insurance company says fine but they will only send $20,000/yr to the new custodian for 5 years to get full value. If the account is set up properly by September 30th the year following the IRA owners death with just $20,000 and $20,000 added each year for the following 4 years, will the IRS have a problem with this????
Dan W.
Permalink Submitted by Al Fry on Thu, 2009-01-29 20:15
That should not be a problem, as long as he takes out his RMD each year, if he wants a stretch beyond 5 years. That works out to be a growth rate of 7.93%, which is pretty good in today’s environment.