How do I handle the inherited IRA since I'm on disability? Should I put it in a beneficiary IRA or will being on disability allow me to liquidate it now?
You can liquidate without the 10% early withdrawal penalty. That option is available to all inherited IRA beneficiaries and is not based on disability.
There is no exception to the tax due. Any distribution will be taxable (unless the original owner had a cost basis, then it would be partially taxable)
If you choose to leave the inherited (beneficiary) IRA in place ( or transfer it to a different financial institution), you will be require to make annual minimum required distributions (MRD or RMD). You cannot rollover an inherited IRA to an IRA in your own name
You really need to talk to the disability folks before making any decisions on this matter. You may lose your benefits or have them reduced depending on how it is handled. You may have to not accept the inheritance due to the rules. Seek guidance asap.
You can liquidate without the 10% early withdrawal penalty. That option is available to all inherited IRA beneficiaries and is not based on disability.
There is no exception to the tax due. Any distribution will be taxable (unless the original owner had a cost basis, then it would be partially taxable)
If you choose to leave the inherited (beneficiary) IRA in place ( or transfer it to a different financial institution), you will be require to make annual minimum required distributions (MRD or RMD). You cannot rollover an inherited IRA to an IRA in your own name
Again check with the disability administrators ... sometimes if you have income or assets it can negatively effect your disability payments. Hal_Al gave a good answer to how it effects you tax wise and I will add that if you have SS benefits they can become taxable if you take out a large sum all at once instead of over a 5 year period or life which are your choices.