My wife inherited a 10 year qualified annuity in 2023 with a current value of $185,000. My understanding is that we have 9 years remaining to empty the annuity. There are no options for rollover or anything to avoid a taxable event in the coming nine years. At this point, we absolutely do not need the money and the investments in the annuity are doing very well (mainly US equities). However, I am thinking that taking a chunk now (maybe $30-$40k) may be a good idea; the Tax Cut act under Trump expire at the end of next year and the market has done so well, take some profits. If we take $40k now, it all remains in the 22% tax bracket. Next year, re-evaluate and if the market is still doing well, take another chunk before the tax brackets re-set. (Taking $40k now, only saves about $1200 in taxes by beating the 3% increase in 2026.) Another consideration is if we wait and are forced to take really large chunks in a few years, we will have some of those funds taxed at 28%. I would appreciate any thoughts or advice. Thank you. Edit: another consideration, we receive an ACA subsidy of $500/month. Adding $40k in income will result in a $3400/yr premium increase, killing any tax benefit.
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