Secure 2.0 Rules Regarding RMDs and SPIA IRAs
I have not been able to verify this, but I’ve read where Secure 2.0 now allows you to use your SPIA income to count towards your total RMD.
Is this true? If it is, how do you calculate your RMD? Do you have to use the SPIA fair market value at year end to factor it into the RMD calculation?
This could be a huge benefit for those with SPIA IRA income and an additional large IRA/401k/4013b.
Thanks!
Permalink Submitted by Alan - IRA critic on Thu, 2023-08-17 16:18
Other than the initial year of annuitization, it’s not clear what the RMD would be for the annuitized portion because it will not have a prior year end balance. In the past, the annuitized distribution was treated as the RMD for that portion only, but perhaps this new provision will be accompanied by some IRS guidance for determining the RMD for the annuitized portion. Perhaps insurance companies will be allowed to apply some version of a present value calculation as of each year end for the following year’s annuity RMD. Without something like that it’s not clear if this provision does anything for years other than the year of annuitization.