Annuity and RMDs?

[FloridaJim57]

If an immediate annuity is purchased with traditional IRA money how are RMDs calculated? Does the monthly payout from the IRA count towards them and what about the remaining sum in the IRA? Any clarification would be appreciated and if you are kind enough to respond please use language that an eigth grader would undertand. Thanks for reading.

 

[VanWinkle]

The immediate annuity is issued with a predetermined amount payable that satisfies the RMD. Any other IRAs will need to satisfy the RMD for each one.

"The IRS considers your an IRA immediate annuity to have satisfied its future RMDs, but only for the money inside of that immediate annuity. In other words, you don't have to include the $100,000 you annuitized in your RMD calculations, but you still have to take RMDs on the remaining $200,000 in your Traditional IRA."

 

[pb4uski]

+1 The annuity benefit payments satisfy the RMD for the annuity money. Other money in the IRA is subject to RMD was normal. So the annuity effectively bifurcates the IRA into two parts for RMD calculations.