RMD calculations when one or more IRAs are in a payout statu
Where can one find “chapter & verse” on how to do the RMD calculations when one or more IRAs are in a payout status, e.g., 10 year period certain, and they own sereral other IRAs in deferral. This is not mentioned anywhere in IRS Pub 590. Thank you, Art Papale
Permalink Submitted by Alan Spross on Thu, 2010-10-21 01:08
Art,
The various aspects of this situation are included in the lengthy and complex IRS Regs attached:
http://www.taxalmanac.org/index.php/Treasury_Regulations%2C_Subchapter_A…
To cut through all the complexity, when you annuitize an IRA annuity, the payouts of that 10 year annuity become the RMD for that annuity only (except for the year of annuitization where there was still a year end account balance). Your other IRAs can be aggregated with each other to determine the RMD for them. These are the IRAs that still have account balances.
Your 10 year period certain is OK assuming that 10 years is less than your life expectancy. But if you annuitized at age 90, the payouts would be less than those indicated for your life expectancy so that would not work. Most of the above Regs discuss all the options with the underlying goal of making sure that the annuity payout comes out at least as fast or faster than if you had NOT annuitized.