Roth Deferred income Annuity distributions paid back into another Roth IRA
Let’s say I did a DIA that starts paying in three years with a drawdown rate of 7% on 1 mil. So in three years I would get 70k a year in annual payments or about $5833 a month. Now, let’s say I found I can get but on less and would rather have those payments directed back into an existing Roth as a Roth to Roth transfer. This would allow for liquidity and tax free status within the Roth fund until I decided to transfer what I needed to my bank account.
Is this Possible? If not designed to work that way, is there a work around?
Permalink Submitted by Alan - IRA critic on Sat, 2022-08-20 14:02
You can do this if the Roth custodians will cooperate with the direct transfers. There are no RMD complications since a Roth has no RMDs, but the limit to one 60 day rollover in 12 months means you would have to do non reportable direct transfers. Reducing the payout frequency to one or two a year might help make the direct transfers easier to set up and monitor. Best to set them up with the receiving Roth custodian who would then pull the transfers from the current custodian. Note that these arrangements are rare for life insurance companies therefore both custodians will have to be on the same page.
Permalink Submitted by Raymond on Sun, 2022-08-21 20:45
Alan, thank your for your answer. Do you have any suggestions on companies that could arrange this. Could Ed Slott’s firm help facilitate this?
Permalink Submitted by Alan - IRA critic on Mon, 2022-08-22 00:51
You might call their main office for a referral to a licensed insurance agent in your area. They do not monitor or contribute to this discussion forum.