RMD and SPIA
Hello,
I have a 71-year old client who had a total of 250K in an IRA. The client annuitized 200K of it in 2017 and ended the year with the account balance of 50K (for simplification reasons, no gain or loss).
does she still have to take RMD from the remaining 50K? although the income amount from SPIA is more than the RMD %?
Thank you as always!
Permalink Submitted by Alan - IRA critic on Fri, 2018-06-01 23:18
Since there was a 2016 year end balance on which to calculate the 2017 RMD, all distributions received in 2017 count toward the 2017 RMD. If the client turned 70.5 in 2017 but the distributions received in 2017 fall short of the RMD, please advise. In any event starting in 2018, the annuitized IRA distributions will satisfy the RMD for that account and the other account must distribute an RMD using the usual rules. In other words, the RMDs can only be aggregated in the year the annuity is purchased (2017). For all years thereafter, each IRA must distribute it’s own RMD, and the annuity distributions are deemed to satisfy the RMD for that account.