rmd withdrawals
With multiple tax qualified IRA’s plus tax qualified annuities, must I withdraw from each account separately or may I make one total withdrawal from the highest earning IRA?
Russell
With multiple tax qualified IRA’s plus tax qualified annuities, must I withdraw from each account separately or may I make one total withdrawal from the highest earning IRA?
Russell
Permalink Submitted by Alan Spross on Tue, 2011-11-29 23:00
If you own more than one IRA, you can calculate the RMD from each and then take that total in any combination you wish over those IRA accounts. Obviously, this includes taking the entire RMD amount from just one of the IRAs.
If the annuities you refer to are 403b accounts, you can do the same as for IRAs, but you cannot combine the IRA RMDs with 403b RMDs. If they are not 403b contracts, please clarify what they are.
Non qualified annuities are not subject to RMD rules, but the states have rules that eventually require these contracts to be annuitized at a certain age.
Permalink Submitted by Russell Charles on Tue, 2011-11-29 23:16
Thank you, the annuity was purchased with an indirect rollover from my largest IRA. It is from Security Benefit Life Insurance Co. called a deferred fixed index annuity, tax qualified just as the IRAs are. The question is really if I must take an RMD separately, from the account value of the annuity, or combine with other IRAs RMD.
Permalink Submitted by Alan Spross on Tue, 2011-11-29 23:41
Your annuity is most likely an IRA annuity. An IRA annuity is subject to the same RMD rules as non annuity IRAs. RMDs can be aggregated over all IRAs including IRA annuities, but there are special considerations if the IRA annuity is annuitized. Once that happens, the annuitized IRA payouts become the RMD for the annuity IRA only, and the other non annuitized IRA accounts can be aggregated with each other, but not with the annuitized IRA.
Some IRA annuities (not annuitized) offer complex fringe benefits. If such benefits exceed a specific de minimus value in excess of the cash value, the account balance for RMD calculation must include these values. Therefore, you should get the specific value of the annuity for RMD purposes from the insurance company. From that you can figure the annuity RMD amount and distribute it from a different IRA account if you wish.
You should confirm that what you have here is an IRA Annuity under Sec 408(b), because you need to be sure before you aggregate RMDs with your other IRA accounts under 408(a).