408b Annuity IRA RMDs
My husband is 70 and considering rolling over a SEP IRA to a 408b annuity IRA. The Annuity IRA has a 10 yr contract length. Does having the 10 yr contract exempt the RMD when my husband turns 73 (and each of the next 7 yrs)? We would have partial surrender charges on any partial withdrawals to fund the RMDs.
Permalink Submitted by Alan - IRA critic on Thu, 2023-10-05 16:03
No. His RMDs must begin at 73, therefore if a particular annuity levies surrender charges for RMDs it is not appropriate for his situation. However, if he has other non annuity IRAs of sufficient value he could satisfy the RMD for all his IRAs from the non annuity IRA. Be careful, as many of these annuities have high fees, commissions, expenses in the underlying funds, etc. SInce there are so many different types of annuity structures available, each one must be carefully checked relative to the costs involved.