moving and recalculating IRA with 72T

Submitted by Julie Brangenberg on Fri, 2014-08-08 13:52

Hello. I have a client (age 57) who has an annuity IRA, and has been taking distributions under 72T for 4 years.
First – If she moves it to a Brokerage IRA, can she continue with 72T, like it has been?
Second – Can she ask for a one-time recalculation of 72T to reduce her payments in the new account?



Submitted by Alan - IRA critic on Fri, 2014-08-08 16:18

  1. There has been a couple problems with partial transfers of a 72t account, but a total transfer to another NEWLY established IRA will not be a problem, and will not affect the 72t plan. The one time switch to the RMD method can also be done, but I would not recommend trying to do a mid year switch. Make the switch effective 1/1 for the full calendar year.
  2. I doubt that the IRA annuity can be held in a brokerage IRA, so if client wants to surrender the annuity and transfer cash to the brokerage IRA there will not be a problem. However, if the annuity is to be continued I doubt that it can be transferred into a brokerage IRA under Code Sec 408a. An IRA annuity falls under Sec 408b. But no harm asking the insurer about this.

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