Can annuity payments from IRA be kept within the IRA?
Say a 61 year old whose assets are nearly all in a traditional IRA takes out a single premium deferred annuity in their IRA to begin annual payments at the age of 65 (when they were planning to stop working). Once they reach 65, they decide they want to keep working and do not need these annuity payments to support their lifestyle.
Even though these payments are being forced out of the annuity due to the annuity contract, is it possible to keep these payouts within the protected tax-deferred container of the traditional IRA so the payments would not both trigger an unnecessary tax burden, and also allow these funds to continue to grow tax deferred for at least another 10 years (until RMD’s begin)?
Permalink Submitted by Alan - IRA critic on Mon, 2025-03-17 12:15
If the IRA annuity is annuitized as a life or joint life annuity, the distributions would be treated as RMDs prior to RMD age and not eligible for rollover. But you are asking if there is a way that the payments could not be distributed and retained in the IRA. I have not heard of any insurance company that offers this.