There are a few different ways beneficiaries of annuities can claim their inheritance. One you might not have heard of is called an “annuity stretch.” It gives non-spouse beneficiaries a way to receive income and defer taxes.
A stretch annuity (also known as a legacy annuity) is an annuity option where tax-deferred allowances are passed on to the beneficiaries, offering them more flexibility and control over maintaining the investment. The beneficiary thus has fewer restraints on wealth transfer, and he or she is able to receive a larger sum of benefits stretched over a longer period of time. This type of annuity is generally non-qualified, which means that it is not held inside of an IRA.
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– SHATEKA Husser