RMD using immediate annuity payout
I have a client who had a 12/31/12 IRA value of $450,000. He decided to move $200K into an immediate annuity which will begin paying him monthly in March 2013 $1,560 or $15,600 total for 2013. The other $250K IRA value is still invested.
My question is will the $15,600 payout from the annuity satisfy a % of his total RMD amount. Also I understand each year the Annuity Company will send him a 5498. Will his annuity payments in 2014 also count toward his RMD?
Thank you for your insight!
Permalink Submitted by Alan - IRA critic on Wed, 2013-03-13 21:36
The annuity payment in 2013 will count toward the total 2013 RMD. The rest of the RMD will have to come from the 250k IRA. Starting in 2014, each IRA account will have to satisfy their own RMD. The annuity will no longer have a year end value since it has been annuitized, and the payment will satisfy the annuity RMD. Any 5498 the annuity company issues after annuitization cannot show a balance and if it did, the RMD would not be based on that balance.