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Inherited Beneficiary IRA

GH1
  |     |   1,053 posts since 2017

Have trouble finding a bank that will take these as transfers. Current bank will only pay half percent on 6 months cd. If I can it out must pay taxes on it. If I leave it get paid pennies. Anyone have experience and transferring a inheritance iras and who to with a reasonable rate

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2


Answers
Steve58
  |     |   459 posts since 2018
I have a small Decedent IRA that I have had at several brokers. I recently had it transferred to Fidelity. They did the work for me. They also set up the account to automatically send me the required minimum distribution each year on the same day and take the necessary taxes.

Why Fidelity? I use it to buy stocks, but you can also use it to also buy brokered CDs from many banks posted on Fidelity. They also have a cash sweep account that is getting ~4.5% right now, but you never know how long it will stay that high.

Far better putting the Inherited IRA into a brokerage account that has access to brokered CDs because you have more choice on investing and you are can stop shopping around, opening a new account at banks or credit unions for this one type of account as rates change.

Steve
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JeffinEasternFL
  |     |   744 posts since 2020
Diddo, a Broker/dealer can set up the account properly and compute/ follow RMD instructions properly. Most banks are ill equipped to do this. Chose a broker dealer and have the account set up via a direct custodian to custodian transfer paperwork (where you do not take possession of funds) if possible.
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7
Tilly
  |     |   8 posts since 2023
Vanguard does a good job with an inherited IRA and will compute the RMD. I always double-checked their calculation and it was correct.
NASA Credit Union will accept an inherited IRA transfer.
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4
Ally6770
  |     |   4,292 posts since 2010
I have one at Pen fed since 2006 but it is small and I just donate the RMD to my mom's favorite charity which was a hospice home for those that could not afford anyplace to go to if they chose. After all these years I there is still about 55% left.
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3
RickZ
  |     |   218 posts since 2010
My inherited IRA was originally at Fidelity, then I moved it to Ally and last month I moved it to Langley CU to lock-in 4.9% 49 month rate. Langley currently has a 22 month 5.35% APY IRA CD.

As you've found out, not all FIs that offer IRAs will accept an inherited IRA as the RMD rules are more complicated. However, I had no problems with Ally servicing my inherited IRA (although I would never recommend Ally due to the bonus fiasco) and the IRA department at Langley seemed very capable. While there are some very good benefits to using a brokerage like Fidelity, I see no reason that a FI with trained IRA/inherited IRA specialists couldn't handle servicing an inherited IRA.
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NYCDoug
  |     |   334 posts since 2011
The 49-month @ 4.9% APY was a promotion at NASA; I snagged one of those, and am ALSO waiting for my inherited IRA to be transferred there (hopefully at that same 4.9% APY that was in effect when I filed the paperwork).

But I'm wondering, given the delay, what happens to all the interest accrued while waiting (on either the sender or the receiver's end) . . . Does it fall through the cracks, at my loss? And will the 49-month opening be back-dated to March? Or will my 49 months start when the funds are officially transferred to NASA?

I'm beginning to see the benefits of using a brokerage, like Fidelity . . . where you should know, and be able to track your money at all times! Sounds convenient ~ Great idea!
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SouthernGirl
  |     |   210 posts since 2022
NYCDoug,
Hello. I would suggest to talk immediately to transferring institution. Please determine if IRA funds have been withdrawn and the date. If funds have not been withdrawn, then you have flexibility to request the quickest method for the funds to be sent to NASA. If funds have been withdrawn and received by NASA, then you can follow up with NASA and obtain the date received and that should be definitely backdated. I would definitely start tracking IRA funds today.
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NYCDoug
  |     |   334 posts since 2011
Thanks for your encouragement, SG!
NASA is in good shape, waiting for funds to be sent them. They say the clock will start on my 49-month CD @ 4.9%, once the funds are deposited.
But Apple Bank (the sending FI) has yet to part with their/my money, despite NASA having sent them the transfer paperwork two weeks ago. I left a message with Apple for a followup / update / callback.
To be continued . . .
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2
LongTimeDAFan
  |     |   69 posts since 2022
GH1, I don't have an answer for you, but you have piqued my interest with your question since I am in a similar boat. My inherited IRA was/is in an annuity, and it is my understanding that I would have to pay income taxes on whatever amount I withdraw. I was not aware that I could possibly "transfer" it. Can anyone give some more info on transferring an inherited IRA out of an annuity? I've been pulling my RMDs every year but have been reluctant to take it all out because I don't want to increase my tax bracket. It pays 1.5% (supposedly), but I never can seem to get an actual statement other than once a year; I'd love to move it to a CD.
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