After I left my employer, I used money from a 401(k) and purchased IRA Annuities. I have not begun to withdraw any monies from any of the the annuity contracts.
Are these annuity balances summed up with my other IRA’s to calculate the RMD, or do I only sum up my non-annuity IRA balances?
Thanks for your attention.
Terry Says: This was a tough one, so I checked with the retirement experts at Fidelity and here’s a “cut and paste” of their response:
Qualified annuities that have not been annuitized need to take an MRD. As always for IRA’s: MRDs need to be calculated for each account separately and can be aggregated and taken from one, any or all to generate the total MRD due. Here’s a bit more info:
- Annuities that are providing lifetime income don’t need to be included in the MRD calculation. They are meeting the MRD for those assets under the annuity rules.
- Qualified annuities that have not been annuitized need to be included in the MRD calculation.
- Annuities are included using their account value and they may need to add the actuarial present value of any guarantees to the value used to calculate the MRD.
So the tricky part will be in calculating an MRD of an annuity that has living benefits — a different account value than the amount on which you can annuitize. It might make sense to annuitize all IRA annuities before you have to start taking MRDs at age 70-1/2. At least it seems that way to me!