Can you Rollover a Qualified Immediate Annuity Payout?
I have a client who is 72. He purchased an Immediate Annuity with IRA money. It pumps out $100,000 a year. Can he roll that payment over to an IRA each year?
I have a client who is 72. He purchased an Immediate Annuity with IRA money. It pumps out $100,000 a year. Can he roll that payment over to an IRA each year?
Permalink Submitted by Alan - IRA critic on Thu, 2012-12-20 20:25
Take a look at the other thread on the 5 year period certain annuity. If this client purchased an IRA annuity based on life or joint life expectancy, the entire 100k is the RMD for that IRA annuity and no part of it is therefore eligible for rollover, other than in the actual year the annuity was purchased. For that first year only, there was a prior year end account balance and if the total RMD based on all TIRA account balances has been satisfied, the excess can be rolled over. But note that there is also a one rollover limit per 12 months, so any such rollovers should instead be done by direct transfer, or the annuity should be set up for an annual distribution in the first year instead of monthly. After the first year, there could be no rollovers and therefore monthly payments would be fine.