Period certain RMD aggregation
If a client has 2 qualified annuities and one is annuitized on a 10year period certain only (no life contingency). Will that distribution count toward their total RMD?
If a client has 2 qualified annuities and one is annuitized on a 10year period certain only (no life contingency). Will that distribution count toward their total RMD?
Permalink Submitted by Alan - IRA critic on Wed, 2014-09-17 21:29
Sounds like the annuitization will occur after reaching 70.5. If so, ONLY in the year of annuitization will the RMDs be aggregated since each annuity will have the prior year end value of a fixed account. In subsequent years, the non annuitized contract will be subject to it’s own RMD distribution, and the annuitized payment will be deemed to be the RMD for that contract. There are also restrictions in certain cases if the 10 year period exceeds the life expectancy of the annuitant, as the IRS does not want RMDs to be less than normally required. This would only come into play if annuitant was 92 or more upon annuitization.