RMD with life insurance inside of profit sharing plan
A client who is 72 needs to take out her RMD this year from her profit sharing plan. The investment value is roughly $500,000, but she also has inside the profit sharing plan a $31,000 whole life policy that has a $26,000 cash value. How does this cash value life insurance factor in when calculating her RMD?
Permalink Submitted by Alan Spross on Tue, 2010-11-09 00:08
I cannot locate a specific Reg on this question, but the policy must have valuation requirement for RMD purposes. Perhaps it is the cash value. She should ask the plan administrator how the policy is valued for RMD purposes as they are responsible for knowing the valuation factors since they allow these contracts in their plan. Sorry I can’t be more specific.