Frequently Asked Question
What do you do for a non-spouse beneficiary receiving a required minimum distribution (RMD) when the plan terminates? Is the purchase of an annuity the only option? Any thoughts on whether an IRA could be opened?
Unfortunately, a non-spouse beneficiary is not allowed to rollover assets from a qualified plan. Therefore, purchasing an annuity appears to be the only option for a beneficiary who wants to stretch out payments over an extended period, while preserving the tax-deferred status of the assets. You may refer to Private Letter Ruling (PLR) 200244023 for an IRS ruling on a similar matter.
Of course, the beneficiary should follow the advice of his or her tax professional.
This question was answered by Denise Appleby
(Contact Denise)
Of course, the beneficiary should follow the advice of his or her tax professional.
This question was answered by Denise Appleby
(Contact Denise)
by
Denise Appleby
Denise Appleby is founder and owner of Appleby Retirement Consulting,which provides technical consultation, content, coaching, writing, editing and training services on related topics.
With more than 14 years of experience in the IRA and defined-contribution plans fields, Appleby has held several senior retirement-plan related positions with Pershing LLC, which included vice president of plans products and services, retirement plans manager, trainer, training manager, compliance consultant, technical help desk manager and writer.
With more than 14 years of experience in the IRA and defined-contribution plans fields, Appleby has held several senior retirement-plan related positions with Pershing LLC, which included vice president of plans products and services, retirement plans manager, trainer, training manager, compliance consultant, technical help desk manager and writer.
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