I inherited a non-qualified annuity from a deceased parent. Do any withdraws I make incur the 10% IRS penalty for withdraws before 59 years of age. Everything I researched says no since this is an inherited non-qualified annuity but wanted to make sure.
Also, I chose the "non-qualified stretch" as the method of distributions moving forward. On any given year, am I able to withdraw more than the calculated amount based on my life expectancy if I need to withdraw more?
The stretch payment is the annual minimum amount of money that must be withdrawn for compliance with the Internal Revenue Code. You can withdraw more without a tax penalty but it is subject to regular income taxes and could affect other things. you have to ask the annuity company if they allow withdrawing more.
Thanks Mike9241
Also, there should not be 10% penalty for withdrawals even if I do a 1035 exchange from the original annuity to a more favorable annuity as long as the "inherited non-qualified" status transfers over?
...which it should correct?