Annual RMD Amounts

[audreyh1]

When I researched SPIAs years ago I remember finding that some IRS rule allows annuitizing to count for RMDs for the amount converted to an annuity. The annuity payment is taxable income just like an IRA withdrawal. You will need to find the rule yourself, consult an accountant, or probably just check through the IRA custodian. Trusting my memory would be foolish.

Yes, I think the annuitization, which relies on its own life-expectancy formula for depletion, satisfies the IRS RMD requirements even if the amount/schedule is different. So as long as it's the only IRA she owns, the IRA custodian should know what to do.

 

[MBAustin]

Also note that the rules for inherited IRAs are significantly different. There have been a number of threads on this recently so search for them if you're in that situation.


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[aja8888]

Also, if the IRA's are with different financial institutions, you need to instruct ALL the institutions in writing: "Do NOT distribute; I am taking my RMD from another institution" + "Please send my 2014 RMD in the amount of $XXXX. Please withhold XX% for Federal and XX% for State/Local income tax."

If you don't instruct, they will all send you checks based on a presumed allocation, and you don't want that because you will incur taxes on every single check!

Amethyst

I'm not experiencing what you said above at all.

I have IRAs at Schwab, Vanguard and PenFed and a Solo 401K at Vanguard. The three institutions notified me that I could take a RMD from them based on the 12/31 balance. I elected to aggregate the IRA amounts and take the distribution from the PenFed account only, which I did.

I did not notify Schwab or Vanguard that I intended to pull the whole amount from another institution and never received any unauthorized distributions from either Schwab or Vanguard.

The Solo 401K RMD must be taken separately which I did.

Whatever happened to you is not the normal case. I don't believe the institutions holding your IRA accounts automatically send you a RMD unless you agree to it and schedule it with them.

 

[PERSonalTime]

Everyone thanks for your responses! This discussion has been very productive. Keep the comments coming....


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