effective date of final regulations of Secure 2.0 act as it relates to annuities counting toward RMDs
The recently released SECURE 2.0 Act final regulations allow for annuities within IRAs to be aggregated with non-annuity IRA assets when calculating the required minimum distribution (RMD). The annuity’s value used in the RMD calculation is its present value as of 12/31 of the previous year. The final regulation allows the full amount of the person’s tax deferred annuity payments for that year to count towards satisfying the RMD total.
Two questions:
- Does this rule go into effect for tax year 2024 or if it applies starting 1/1/2025.
- If annuity companies aren’t already required to do so, will they be required to provide the annuity’s present value as of 12/31 of the previous year in a letter on annual statement so that this information is easily available to the annuitant?
Thank you,
Austin
Permalink Submitted by Alan - IRA critic on Wed, 2024-08-28 14:16
The rule can be used in 2024 as it would be treated as a good faith interpretation of the final IRS Regs that become mandatory in 2025. The new rules only affect annuitized accounts. The insurance company would have to calculate the prior year end value to determine the RMD for the annuity, which can then be aggregated with the RMD of the other IRAs.
If the annuity has not been annuitized, the new rule changes do not affect the RMDs, as they could always be aggregated, but the insurance company would have to provide the RMD amount for the annuity taking into consideration the fringe benefits included.