income riders on ira index annuities
When you elect to begin receiving Guaranteed lifetime income benefits through a income benefit on an index annuity, will that income stream satisfy all rmds for that ira (like it does on any type of annuitization of an annuity)? Also, can that distribution be used to satisfy rmds for other iras?
Permalink Submitted by Richard Fritts on Mon, 2015-01-12 16:31
When you elect a period certain only annuitization from a ira annuity, ie. 10 yrs, Can that distribution be used to help satisfy rmds from other iras?
Permalink Submitted by Alan - IRA critic on Mon, 2015-01-12 19:39
Once an IRA has been annuitized, in years following the year of annuitization there is no account balance on which to calculate RMDs. Therefore, the annuity payout itself satisfies the RMD for that particular IRA, but distributions do not apply against the RMDs from other IRA accounts. IRS Regs limit the length of these periods, but there is little guidance on short periods, but any annuity payout that breaches age 70.5 is likely to be considered 100% RMD, with no portion eligible for rollover. For the actual year of annuitization, there IS a prior year end balance, so that is the last year that RMDs can be aggregated with other IRAs.