Investments within the IRA
I have never understood how this works. If i have i.e. an annuity and i want to transfer that annuity to be an investment in my IRA, on the annuity, there are restrictions for W/D and certain allowances for penalty free distributions depending on the product. Once it is in the IRA does the annuitant lose some of their beneficial features of the annuity because it is under IRA “rules” for distributions….? Hope i am making sense.
Thanks 😕
Permalink Submitted by Alan Spross on Sun, 2009-11-08 22:48
You are correct that IRA distribution tax rules trump those of annuities, but the various investment options of an annuity can still be offered in an IRA annuity. IRA RMD rules continue to apply to an annuity IRA. You cannot transfer a non qualified annuity into an IRA. You must either purchase the annuity within the IRA, or convert an IRA annuity to a Roth IRA annuity. Once an IRA annuity, the contract can be annuitized for a life time payout over a single life or joint life annuity and those payments will satisfy RMD requirements.