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?

By Denise Appleby AAA
A:

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
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