Jump to content

Can I Aggregate Individual Retirement Account & Individual Retirement Annuity RMDs?


Guest GaryB

Recommended Posts

Guest GaryB

I reach age 70 1/2 this year. I have four Individual Retirement Accounts, two of which contain Individual Retirement Annuities and nothing else. The annuities have not been annuitized. I don’t plan to annuitize them for a couple of decades. Can I add up the Required Minimum Distribution (RMD) from these and take the total from one of the Individual Retirement Accounts not containing an annuity and by doing so satisfy my RMD for all of the accounts and annuities? Does the fact that the annuities are in Individual Retirement Accounts make a difference?

Link to comment
Share on other sites

IRS Reg 1.401(a)(9)-6 Q&A-12 says in part:

"Q-12. In the case of an annuity contract under an individual account plan that has not yet been annuitized, how is section 401(a)(9) satisfied with respect to the employee's or beneficiary's entire interest under the annuity contract for the period prior to the date annuity payments so commence?

A-12. (a) General rule. Prior to the date that an annuity contract under an individual account plan is annuitized, the interest of an employee or beneficiary under that contract is treated as an individual account for purposes of section 401(a)(9). Thus, the required minimum distribution for any year with respect to that interest is determined under §1.401(a)(9)-5 rather than this section. See A-1 of §1.401(a)(9)-5 for rules relating to the satisfaction of section 401(a)(9) in the year that annuity payments commence and A-2(a)(3) of §1.401(a)(9)-8."

You should refer the reg for more details about how the account balance is determined for purposes of minimum distributions. You will likely need to consult with the annuity provider.

You can then refer to Reg 1.408-8 in which we find the rules about aggregating IRAs (Q&A-9). That reg also specifies in Q&A-1 that "For purposes of this section, the term IRA means an individual retirement account or annuity described in section 408(a) or (b)."

You will need to conclude for yourself how the rules apply to your specific situation. You might confer with your annuity account provider.

Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra

Link to comment
Share on other sites

  • 1 month later...

I would just add - if you are looking for tax advice for your specific situation (which is what this is) , you're best to consult a tax or legal advisor rather than the annuity account provider. In my experience going to the provider you're going to get one of two things. 1) an answer provided by a call center employee who's appraisal goals include providing "first call" resolution to questions as quickly and efficiently as possible (and who will not be there to assist you if you're audited), OR, 2) a response from the annuity provider essentially telling you that they can not provide tax or legal advice so you'll need to consult with your tax advisor for your particular situation.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...