RMD from IRA annuity with GMIB

Submitted by Tracy Miller on Wed, 2023-03-22 19:46

Can someone explain the rules for RMDs from IRA annuities that have the Guaranteed Minimum Income Benefit (and also has the Guaranteed Minimum Death Benefit). The annuity account value is 463,000 and the GMIB/GMDB value is 717,000. She is 3 years away from RMD and this is for her financial planning. I can’t get through to a right person at the insurance company.
Thank you.



Submitted by Alan - IRA critic on Wed, 2023-03-22 20:51

  • These annuities are still treated as individual accounts because they have not been annuitized. They still have an annual year end balance, but because of complex rules for valuation of the various fringe benefits, the RMD calculation is complex and must be done by the insurance company and the calculated RMD amount provided to the IRA annuity owner. Therefore, the RMD would start with a value of 463k but subject  to increase by the company subject to the “entire interest rule” and it’s exceptions (sorry for format issue):
  • Exceptions to the entire
  • interest rule
  • There are two exceptions to this
  • rule that may allow the client to
  • use only the 12/31 account balance
  • instead of the combined value
  • when calculating RMDs:
  • 1. If the only additional benefit
  • provided under the contract is a
  • return of premium death benefit,
  • its value may be disregarded in
  • determining the entire interest in
  • the annuity; or,
  • 2. If the additional benefit does not
  • exceed the actual value by 20%
  • of the contract’s account value
  • and the contract only includes
  • the following additional benefits:
  • a. Additional benefits
  • are reduced at least
  • proportionately for
  • withdrawals; and,
  • b. An additional benefit
  • that provides a return of
  • premium upon death.
  • Absent one of these exceptions then the combined
  • value must be used in the RMD calculation.
  • Practical effect of the
  • entire interest rule
  • It is likely that the only time that the “entire interest
  • rule” will increase the RMD calculation is when the
  • guaranteed values provided under the contract are
  • significantly greater than the 12/31 account value.


Submitted by Tracy Miller on Wed, 2023-03-22 21:24

I appreciate your help!!!



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