Annuity Inheritance ?
After speaking with the company, I'm still not sure of what this means. My understanding is we will divide the inheritance equally and 250,000 is subject to income tax but the 200,000 is not. Is this correct?
Also, we have three options to recieve the funds. Lump sum, lifetime payments or monthly payments. The representative said 99% of people take the lump sum.
Neither of us have a huge need for the money right now and would rather see it grow. Lump sum would subject us to a huge tax payment, right? We both have adequate IRA funds on our own through our employment which will end up in annuities, so we don't see the need to have another annuity. Is the monthly payment our best option? Does it make sense that we would take that and reinvest in higher risk?
Answer:
When my father died, he left me his US Government annuity. I was given those three options as well, but also the option just roll my dividend into another IRA. I did that, and now I have to take about a thousand dollars a year disbursement, but no other penalites or taxes. If you don't need the money, that might be your best option. Taking a lump sum cash disbursement costs you big in income taxes the year you take it. Check with someone in your area and if this is an option for you, they can handle all the paperwork for you. Other Questions and Answers: