Inherited IRA

inheritMom
Mon, 29 Jan 2018 15:08:10 +0000

Last year my 25 year old daughter inherited a IRA worth $11,000 from her boyfriend who unexpectedly passed at 27. (God bless him). She currently attends court reporting school which has started to distribute financial aid the last two years. She attends full-time & does not work. Recently, the financial aid office has told her she needs to take all the money out & report that as income. Now, I know if she takes it out before 55, she will be penalized. What I know from the company who has the IRA, they have told us each year they will distribute out to her, the very least, $200 each year & until the Account is at a zero balance. What she plans on doing with the distribution is investing in her own IRA to mature & grow. Now, my question is, does financial aid have the right to demand you to take all money out & report as income for financial aid, or should she tell them she can’t take it out until she is of retirement age? I know the yearly distribution will need to be reported as income, but does that effect her financial aid? Also, she has about 2 more years of schooling left. Any advice would surely help as we have no experience with inherited IRAs & it seems not too many people we know really know what the next step is. Thank you so much