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Hi. I have just found out I am the beneficiary on a NYS Teachers Retirement TDA (Tax Deferred Annuity) whose owner recently passed away. What is my best course of action? Lump-sum? Roll it over to an IRA?
Location: Chapel Hill, NC, formerly NoVA and Phila
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Originally Posted by kmrlongisland
Hi. I have just found out I am the beneficiary on a NYS Teachers Retirement TDA (Tax Deferred Annuity) whose owner recently passed away. What is my best course of action? Lump-sum? Roll it over to an IRA?
Thanks in advance.
You will need to give a lot more details than that. Your age? Income/Tax bracket? How much is the annuity worth? Etc.
Best source of action is to find a good financial planner that has experience with accounts like this and have him/her look at your total financial picture to give you good direction.
If you do not need the money right away, those pensions often have cost of living in them and can provide a nice monthly check for life, so best to check with them what you are entitled to, and besides, you may not have a choice how you will be able to take it.
Hi. I have just found out I am the beneficiary on a NYS Teachers Retirement TDA (Tax Deferred Annuity) whose owner recently passed away. What is my best course of action? Lump-sum? Roll it over to an IRA?
Thanks in advance.
You said tax deferred. That means part of each payment is taxable by the state and Federal gov. IF you take lump sum be sure you know the taxable amount. Lump sum is probably a bad idea.
Try contacting NYS as they can give you the options.
I have been on the NYSTR website and they describe the choices we have as non-spouse beneficiaries. Most likely we will roll it into an inheritance IRA.
I have been on the NYSTR website and they describe the choices we have as non-spouse beneficiaries. Most likely we will roll it into an inheritance IRA.
While this is most likely your best choice vs. lump-sum, you will need to educate yourself on the IRS rules regarding Inherited IRAs. There are some that are different than a Traditional IRA regarding things like when you must take Required Minimum Distributions (RMDs).
You may also want to contact a financial adviser with experience in Inherited IRAs.
In 2015, you may inherit 5,430,000 total assets from a parent tax free. This may influence your decision.
The estate is totaled at $1mil and the TDA is split among 5 beneficiaries at $50k/each.
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