When converting an IRA to an immediate annuity for VA purposes, the immediate annuity does not have to have an actuarially sound pay-out.
When converting an IRA to an immediate annuity for VA purposes, the immediate annuity does not have to have an actuarially sound pay-out. The VA system only requires that the annuity be an immediate annuity, and not a tax deferred annuity. When structuring the monthly payment amount, make sure the immediate annuity monthly payment amount satisfies the required minimum distribution (“RMD”) requirement. However, beware of the Medicaid annuity trap; Medicaid has different terms than the VA.
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