Home › Fairmark Forum › Retirement Savings and Benefits › life annuity as distribution of nonspousal inherited IRA › Reply To: life annuity as distribution of nonspousal inherited IRA
I really do not see a difference here. In both 1 and 2 above the owner/participant made the decision while still living to control how long the beneficiary would collect. In traditional DB plans, the plan might offer different % amounts (eg 50% or 100%) of the participant’s benefit. The higher the % the beneficiary will get, the lower the benefit for the participant. IRA options for beneficiaries are also determined by the IRA owner, the beneficiary cannot change the format after they inherit. I think you were asking why you could not take the lump sum your brother left you and annuitize it, but you could not have done that under 1. above either, and you could not change the benefit structure you would inherit under a DB plan either. So in all 3 cases, the participant determines the options the beneficiary will inherit.