Are RMDs Required for Annuities? (w/Examples) + FAQs

Yes, required minimum distributions (RMDs) apply to annuities held inside qualified retirement accounts such as traditional individual retirement accounts (IRAs) and 401(k) plans. They start at age 73 if you were born from 1951 through 1959, and at age 75 if you were born in 1960 or later.

A non-qualified annuity, bought with after-tax money, has no RMDs while the owner is alive. It must still be paid out after the owner dies.

The rule comes from Internal Revenue Code Section 401(a)(9). It forces yearly withdrawals from tax-deferred accounts whether you need the cash or not. Miss one and the Internal Revenue Service (IRS) charges an excise tax of 25% of the shortfall. The tax drops to 10% if you fix the error within the correction window. You report it on Form 5329.

The Fundamental Split: Qualified vs Non-Qualified Annuities

The RMD question turns on where your annuity lives. That one fact decides whether the IRS can force withdrawals or whether you control the timing.

Qualified Annuities and RMD Requirements

A qualified annuity sits inside a tax-advantaged retirement account. You bought it with pre-tax dollars from your IRA, 401(k), 403(b) or similar plan. That money was never taxed, so the IRS collects its share through RMDs.

Your first withdrawal is due by April 1 of the year after you reach RMD age. Later ones are due by December 31. The amount tends to rise as your factor on the IRS Uniform Lifetime Table in Publication 590-B, Appendix B, shrinks.

If you had to take $15,000 and took nothing, the excise tax is $3,750. It falls to $1,500 if you withdraw the shortfall within the correction window. You report it on Form 5329 and still owe income tax on the withdrawal.

Non-Qualified Annuities and RMD Freedom

A non-qualified annuity sits outside any retirement account. You bought it with after-tax dollars from savings or another source that was already taxed.

There are no RMDs while the owner is alive. You choose when to start income, if ever, while the contract grows tax-deferred.

After the owner dies, Internal Revenue Code Section 72(s) requires the contract to be paid out within 5 years, or as life payments that start within 1 year. A surviving spouse can continue the contract instead. Many contracts also set a maximum maturity age, often 95 to 100. That is an insurer rule, not an IRS rule.

High earners often fill their qualified accounts first. Then they buy non-qualified annuities for tax-deferred growth with no contribution cap.

How Account Type Determines RMD Status

The same contract follows different rules depending on the account that holds it.

Take a fixed indexed annuity worth $200,000. Inside a traditional IRA, it creates an RMD every year from age 73 or 75. The RMD is the December 31 value divided by your life expectancy factor. Bought with non-qualified dollars, the same annuity has no such rule, and you can leave it alone at 73, 83 or 93.

Taxes differ too. Withdrawals from a non-qualified deferred annuity come out of earnings first under Internal Revenue Code Section 72(e), so they are fully taxable until the gain is gone. Only annuitized payments are split into taxable and tax-free parts using the exclusion ratio. Our post on non-qualified annuity taxes walks through the numbers.

RMD Age Requirements and Timing Rules

Knowing when RMDs begin prevents costly mistakes. Your birth year decides your RMD age.

Current RMD Starting Age

If you were born from 1951 through 1959, your RMD starting age is 73. Someone born in 1953 turned 73 in 2026. Someone born in 1954 turns 73 in 2027.

If you were born in 1960 or later, the starting age is 75. That gives you two more years of tax-deferred growth before withdrawals become mandatory.

Anyone who reached age 72 before January 1, 2023 already started RMDs under the earlier age-72 rule. Those people stay on that timeline.

Each spouse has a separate RMD age based on their own birth year.

The April 1 Deadline Trap

You can delay your first RMD until April 1 of the year after you reach your RMD age. If you wait, you take two RMDs in one calendar year.

Say you turned 73 in 2026, so you were born in 1953. You can delay the 2026 RMD until April 1, 2027. Your 2027 RMD is still due by December 31, 2027. Both count as 2027 income.

The doubled income can push you into a higher bracket and make more of your Social Security taxable. It can also raise your Medicare premiums and shrink the extra senior deduction for tax years 2025 through 2028.

Most tax advisors suggest taking the first RMD in the year you reach your RMD age.

Required Beginning Date for Different Account Types

For traditional IRAs, your required beginning date is April 1 of the year after you reach your RMD age, 73 or 75. That holds even if you still work, and it applies to SEP and SIMPLE IRAs too.

Employer plans such as 401(k) and 403(b) plans can offer a still-working exception. If you work past your RMD age and do not own 5% or more of the company, you can delay RMDs from that employer's plan until April 1 after you retire. The plan itself must allow this, so check the plan document.

The exception covers only your current employer's plan. You must still take RMDs from IRAs and from former employers' plans once you reach your RMD age. Owners of 5% or more get no delay, even while they keep working.

Calculating RMDs for Different Annuity Types

The math depends on whether your annuity has been turned into income payments or is still in its accumulation phase.

Deferred Annuities in Accumulation Phase

A deferred annuity that has not been annuitized uses the standard RMD math. The insurer reports your annuity fair market value as of December 31 in Box 5 of Form 5498, and Boxes 11 and 12 show whether an RMD is due for the coming year.

Say a fixed annuity is worth $400,000 on December 31, 2026, and you are 75 in 2027. At a factor of 24.6, your 2027 RMD is $16,260.16, due by December 31, 2027. Variable and indexed annuities work the same way.

Under Treasury Regulation 1.401(a)(9)-6, the value also includes the actuarial present value of extras such as enhanced death benefits or guaranteed income riders, unless an exception applies. The RMD can therefore be higher than the cash value suggests.

Immediate Annuities and Automatic RMD Satisfaction

When you buy an immediate annuity with qualified funds, life annuity payouts that meet Treasury Regulation 1.401(a)(9)-6 satisfy the RMD for the annuitized amount each year.

A 73-year-old man uses $200,000 of his IRA to buy a single life immediate annuity in 2027. It pays $1,283 a month, or $15,396 a year. A 2027 RMD on the same sum would be $7,547, using the factor of 26.5.

The trap is the purchase year. That year's RMD is based on the prior December 31 balance, which still included the premium. Either take the RMD on that money before you buy, or make sure that year's payments cover it. Our post on whether annuity payments satisfy RMDs covers the test in detail.

The SECURE 2.0 Partial Annuitization Rule

When you annuitize part of your IRA, you can elect to combine the annuity's fair market value at the prior December 31 with the rest of the account. Annuity payments then count toward the combined RMD. The election comes from Section 204 of the SECURE 2.0 Act and the final RMD regulations, which apply from 2025. Your custodian or insurer must make it available.

Suppose you are 73 in 2027 with a $500,000 IRA. Part of it is an income annuity that pays $15,000 a year. The other $300,000 stays invested.

• With the election: $500,000 ÷ 26.5 = $18,867.92 for 2027. The annuity payment covers all but $3,867.92.
• Without the election: the annuity covers only itself. The invested balance must produce its own 2027 RMD of $11,320.75.

RMD Calculation Example with Dollar Amounts

Sarah turns 75 in 2027. Her traditional IRA held a deferred variable annuity worth $380,000 on December 31, 2026.

1. Find age 75 on the Uniform Lifetime Table in IRS Publication 590-B. The factor is 24.6.
2. Divide the December 31, 2026 balance by the factor. $380,000 ÷ 24.6 = $15,447.15.
3. Withdraw at least $15,447.15 by December 31, 2027.

The whole 2027 withdrawal is ordinary income. The insurer reports it on Form 1099-R, usually with distribution code 7 for a normal distribution.

Now suppose Sarah takes only $10,000 in 2027. Her shortfall is $5,447.15. The 2027 excise tax is $1,361.79 at the full rate. It is $544.72 if she withdraws the missing amount within the correction window, which generally ends on the last day of the second year after the shortfall, or sooner if the IRS acts first.

Special Annuity Types and RMD Treatment

Some annuity structures get their own treatment under the RMD rules, which opens up planning choices.

Qualified Longevity Annuity Contracts (QLACs)

A qualifying longevity annuity contract (QLAC) keeps retirement money out of the RMD calculation until its payments begin. The premium limit is $220,000 for 2027 ($210,000 for 2026) under IRS Notice 2026-66. It is a per-person lifetime limit across all IRAs and plans. The old cap of 25% of your balance is gone.

With $800,000 in IRAs, moving the 2027 maximum from your IRA into a QLAC leaves $580,000 for RMDs. Our post on QLAC premium limits covers sizing.

A QLAC must:

• Start payments by the first day of the month after you turn 85, with no minimum start age
• Have no cash surrender value
• Limit death benefits to a return of premium or payments to a survivor
• Not be a variable or indexed annuity

Joint-life QLACs and a 90-day free-look are allowed.

Roth IRA Annuities and RMD Exemption

Annuities held inside Roth IRAs face zero RMDs during your lifetime, whatever the annuity type. The Roth account creates the exemption, not the annuity.

Withdrawals of earnings are tax-free once you are 59½ and your Roth has been open at least five years.

Designated Roth accounts in workplace plans, such as a Roth 401(k), also have no lifetime RMDs, effective for 2024 and later years.

Beneficiaries are treated differently. Most heirs of a Roth IRA or Roth 401(k) must empty the account within 10 years. They take no annual RMDs inside that period, because a Roth owner never reaches a required beginning date.

403(b) Plans and Pre-1987 Contributions

If you had a 403(b) before 1987, a special rule shields your pre-1987 account balance from RMDs until age 75.

It works only if the plan kept separate records of pre-1987 and post-1986 amounts. Without them, the whole balance follows your normal RMD age. Anyone whose RMD age is already 75 gains nothing from it, so the rule mainly helps people whose RMD age is 73. Their RMDs at 73 and 74 use only the post-1986 balance.

At 75, both amounts count. Any withdrawal above your required amount is charged against the pre-1987 balance first. Rolling pre-1987 money into an IRA ends the protection.

Annuity Type Comparison and RMD Impact

Annuity Location	RMD Required?	Starting Age	Calculation Method	Key Exception (2027 rules)
Traditional IRA	Yes	73 or 75 (by birth year)	Balance ÷ life expectancy factor	None
Roth IRA	No, during owner's life	N/A	Not applicable	Heirs face the 10-year rule
Roth 401(k)/403(b)	No lifetime RMD	N/A	Not applicable	Heirs face the 10-year rule
Non-Qualified	No, during owner's life	N/A	Not applicable	Paid out after owner's death
401(k)/403(b)	Yes	73/75 or retirement	Balance ÷ life expectancy factor	Still-working rule
QLAC	Excluded until payments start	No later than 85	Premium left out of the balance	Per-person lifetime premium limit
Inherited qualified annuity	Yes	Year after death	10-year rule; annual RMDs if owner died on or after required beginning date	Eligible designated beneficiaries
Inherited non-qualified annuity	Payout required	Within 1 year for life payments	5-year or life-payout rule	Spouse can continue the contract

How Different Annuity Scenarios Impact RMDs

Specific situations change your RMD math and can lead to penalties.

Converting IRA Funds to Annuities Near RMD Age

Many retirees move part of an IRA into an annuity near RMD age. A deferred annuity bought the year before your RMD age, 73 or 75, stays in its accumulation phase. Its December 31 value enters your RMD like any other IRA asset.

An immediate annuity bought in the year you reach RMD age starts paying within 12 months, and those payments cover the RMD on the annuitized money. The purchase year's RMD still uses the prior December 31 balance, premium included. With the aggregation election, payments can also count toward the rest of the account.

Annuitizing locks in lifetime income. A deferred annuity keeps cash value within reach but needs a withdrawal every year.

Multiple Annuities in Multiple IRAs

When you own several annuities across different IRAs, you figure the RMD for each IRA. Then you can take the total from any one of them or any mix.

Suppose your three traditional IRAs total $450,000. IRA #1 holds a variable annuity. IRA #2 holds a fixed annuity worth $150,000. IRA #3 holds mutual funds worth $100,000. At age 74 in 2027, your factor is 25.5.

Your total 2027 RMD is $17,647. You can take all of it from the mutual funds and leave both annuities alone, which helps when an annuity still has surrender charges.

Other account types have their own limits:

• 403(b) RMDs can be combined across your 403(b) accounts.
• 401(k) and 457(b) RMDs must come from each plan separately.
• Inherited IRAs can be combined only with other IRAs inherited from the same person.

Annuity Payments Less Than RMD Requirements

Annuity payments can fall short of the RMD on the whole account, especially with income annuities bought years before RMDs began.

James is 76, so his factor is 23.7. At 65 he used $100,000 of his IRA to buy a deferred income annuity. It now pays $8,400 a year and has a fair market value of $120,000. The rest of his IRA holds $250,000.

• With the aggregation election: $370,000 ÷ 23.7 = $15,611.81. After the $8,400 payment, James still owes $7,211.81 from the rest of his IRA by December 31.
• Without the election: the annuity payments cover the annuity's own RMD. The $250,000 balance needs a separate RMD of $10,548.52.

The excise tax applies to whatever shortfall remains.

Inherited Annuities and Beneficiary RMD Rules

When you inherit an annuity inside a qualified retirement account, your relationship to the owner and the owner's age at death decide what you must withdraw.

Spouse Beneficiaries and RMD Options

A surviving spouse has the most choices. You can treat the inherited annuity as your own, usually by rolling it into your IRA. RMDs then wait until your own RMD age, which suits a younger spouse.

Or you can keep it as an inherited account. As sole beneficiary, you can delay RMDs until the year your spouse would have reached RMD age, 73 or 75. Under Section 327 of the SECURE 2.0 Act, you can also elect to be treated as your deceased spouse, so your RMDs use the Uniform Lifetime Table. The 10-year rule is an option only when the owner died before the required beginning date.

Before you accept a lump sum, ask the insurer for every option in writing.

Non-Spouse Beneficiaries and the 10-Year Rule

For deaths after 2019, most non-spouse beneficiaries must empty an inherited qualified annuity within 10 years, by December 31 of the 10th year after the death. If the owner died before the required beginning date, you can spread withdrawals any way you like.

If the owner died on or after that date, you also take annual RMDs, required from 2025 onward, as our post on RMDs during the 10-year rule explains.

A father dies in 2026 at 78, after his required beginning date. His daughter is 45 in 2027, so her Single Life Table factor is 41.0 and her 2027 RMD is $7,317.07. She lowers the factor by 1 each year and must empty the account by December 31, 2036.

Eligible Designated Beneficiaries and Exceptions

Five groups avoid the 10-year rule: surviving spouses, minor children of the owner, disabled individuals, chronically ill individuals, and beneficiaries not more than 10 years younger than the owner.

These eligible designated beneficiaries can stretch withdrawals over their own life expectancy. A sister, age 67, inherits from her brother, age 72. She qualifies because she is not more than 10 years younger. Her RMDs can run for 20 years or more.

A minor child takes life-expectancy RMDs until age 21. After that, the account must be emptied by December 31 of the year the child turns 31.

Disabled and chronically ill beneficiaries must give the plan administrator proof of their status by October 31 of the year after the owner's death. Missing that date costs them the stretch.

Inherited Non-Qualified Annuities: The 5-Year and Life Payout Rules

A non-qualified annuity has no RMDs during the owner's life, but heirs face a payout schedule. Under Internal Revenue Code Section 72(s), the contract must be paid out in full within 5 years of the owner's death, or as life or life-expectancy payments that begin within 1 year. A surviving spouse can instead continue the contract as the new owner.

Gains are taxed to the beneficiary as ordinary income, with no step-up in basis. A child inherits a $150,000 contract with $50,000 of gain. A lump sum puts all of that gain on one tax return, while 5-year or life payments spread it out. The parent's basis comes back tax-free either way.

Required Minimum Distribution Strategies

The aim is not a smaller RMD for its own sake. It is avoiding a tax spike, a Medicare surcharge or a higher bracket for a surviving spouse who later files alone.

Using QLACs to Reduce Current RMDs

A QLAC takes a large sum out of the RMD calculation. A 73-year-old with a $900,000 IRA has a 2027 RMD of $33,962.26, which is $900,000 divided by 26.5.

She moves the 2027 maximum of $220,000 into a QLAC with payments starting at 80. Her RMD drops to $25,660.38, which is $680,000 divided by 26.5. That is $8,301.88 less income. In the 24% federal bracket, she saves about $1,992 in tax for 2027.

Over the seven years until payments begin, she defers more than $55,000 of RMDs. At 80, the QLAC starts paying guaranteed lifetime income, and those payments are taxable.

The plan works only if other income covers your bills until the QLAC start date. The premium cannot be withdrawn in the meantime.

Satisfying RMDs from Non-Annuity Assets First

When an IRA holds both an annuity and liquid investments, take the RMD from the liquid side first. Many annuities charge a surrender fee on withdrawals in the first five to 10 years.

A 75-year-old owns a $400,000 IRA in 2027. A fixed indexed annuity holds three-quarters of it and a stock mutual fund holds the rest. His 2027 RMD is $16,260.16. The annuity has a 6% surrender charge for three more years.

If he takes the whole 2027 RMD from the annuity and the contract has no waiver, the fee is $975.60 in surrender charges. Taking the RMD from the mutual fund costs nothing.

Many annuities waive surrender charges on RMD withdrawals, so check the free-withdrawal and RMD-waiver clauses.

Using a Qualified Charitable Distribution to Satisfy an Annuity IRA RMD

A qualified charitable distribution (QCD) sends IRA money straight to a charity. You can make one from age 70½. The limit is $114,000 for 2027, up from $111,000 for 2026, under IRS Notice 2026-66.

A QCD counts toward your RMD and stays out of your income. That beats a deduction, because the money never reaches your adjusted gross income.

Two limits matter for annuity owners. A QCD from an IRA annuity works only if the insurer can pay the charity directly, so ask before December. And QCDs are not available from a 401(k) or other employer plan.

A one-time QCD can also fund a charitable gift annuity or other split-interest gift. That limit is $57,000 for 2027, up from $55,000 for 2026.

Converting to Roth Before RMD Age

Converting traditional IRA money to a Roth IRA before your RMD age removes that money from future RMDs. You pay income tax on the conversion that year.

A 70-year-old converts 40% of his traditional IRA, which holds a deferred variable annuity, in 2027. At the 2027 factor of 26.5, the converted money alone would have added about $7,547 to his first RMD at 73.

Three rules apply:

• Once RMDs start, take the year's RMD before you convert.
• An RMD can never be converted or rolled over.
• An annuity converted in kind is taxed on its fair market value, including the value of riders.

The choice weighs tax rates now against tax rates later. Converting in the lower-income years between retirement and RMD age often works best.

How Annuity RMDs Affect the Senior Deduction and Medicare Premiums

For tax years 2025 through 2028, taxpayers 65 and older get an extra $6,000 deduction per person. It shrinks by 6% of modified adjusted gross income (MAGI) above $75,000, or above double that threshold on a joint return.

RMDs and Roth conversions both count toward that MAGI. A single filer has MAGI of $75,000 before her 2027 annuity RMD. The RMD lifts it to $90,000. She loses $900 of the deduction for 2027, which is that phase-out rate applied to the excess.

The same income also feeds Medicare. Income-related surcharges on Part B and Part D premiums are based on your MAGI from two years earlier. A large RMD or conversion in 2027 can raise your premiums in 2029.

Common Mistakes to Avoid

These errors lead to excise taxes or to income tax you did not have to pay.

Mistake 1: Assuming Non-Qualified Annuity RMDs

Many people think every annuity requires RMDs and take withdrawals nobody required.

A retiree with a non-qualified annuity takes out $10,000 in 2027, at 73, because she thinks she must. Non-qualified withdrawals are taxed earnings-first. If her gain is at least that much, the full withdrawal is taxable. That is about $2,200 to $2,400 of 2027 federal tax in the 22% or 24% bracket.

Do not overcorrect, though. Her heirs will still have to take the contract's value under the after-death payout rules.

Mistake 2: Missing the Aggregation Rule for IRAs

You can add up RMDs across your traditional IRAs and take the total from any of them. 403(b) accounts can be combined only with each other, and 401(k) RMDs never combine with other accounts.

A common error is taking the full total from an IRA when part of it is a 401(k) RMD. That part must come from the 401(k) itself.

A missed 401(k) RMD the size of the earlier example costs $3,750 in excise tax for 2027, or $1,500 if you correct it within the window.

Mistake 3: Ignoring Inherited Annuity RMD Deadlines

If the owner had not taken the RMD for the year of death, the beneficiary must take it.

A father dies in March 2026 at age 75. He had not taken his 2026 RMD. His daughter must withdraw it by December 31, 2026. Her own beneficiary RMDs are separate and begin in 2027.

The final RMD regulations soften the penalty. The excise tax is waived automatically if the beneficiary takes the year-of-death RMD by the due date of their own tax return for that year, including extensions, or by the end of the following year if that is later. Taking it by December 31 is still the safe course.

Mistake 4: Failing to Document QLAC Purchase Properly

A QLAC earns its RMD exclusion only if the contract says it is intended to be a QLAC. A look-alike deferred income annuity cannot be relabeled later. The insurer of a real QLAC files Form 1098-Q each year, so ask for a copy.

A retiree moves part of his IRA into what he believes is a QLAC. The insurer issued a standard deferred income annuity. At 73 in 2027, he must include the full premium in his year-end balance. That adds roughly $5,660 to his 2027 RMD.

Paying too much premium is easier to fix. Premiums over the limit can be refunded by December 31 of the year after the excess payment, and the contract keeps its QLAC status.

Mistake 5: Annuitizing Too Much Too Soon

Turning your whole IRA into an immediate annuity ends the yearly RMD math. It also ends your flexibility. You cannot pull extra cash for emergencies, and inflation wears down the fixed payment.

A better approach is to annuitize only enough to cover basic living costs and keep the rest liquid. The annuity satisfies the RMD on its own portion.

Do's and Don'ts for Annuity RMDs

Run through these two lists each fall, before your December 31 deadline.

Do's

• Do recalculate the RMD on every qualified annuity each year, because both the balance and your factor change.
• Do time annuity purchases around your RMD plan.
• Do keep records of pre-1987 403(b) contributions, which stay out of RMDs until age 75 when documented.
• Do consider a QLAC up to the annual limit. You can buy one at any time if payments start by 85, and buying before RMDs begin excludes the money sooner.
• Do review beneficiary designations on qualified annuities, because they decide which payout rule your heirs get.
• Do use the still-working exception if you work past your RMD age and stay under the ownership limit described above.

Don'ts

• Don't assume annuity payments cover all your RMDs. A shortfall draws the excise tax, or the lower rate if corrected in time.
• Don't mix up qualified and non-qualified rules.
• Don't buy an annuity without reading the surrender schedule and the RMD-waiver clause.
• Don't delay your first RMD to April 1 without running the numbers on two RMDs in one year.
• Don't ignore riders that raise the RMD value. Use the value the insurer reports.
• Don't buy an annuity inside a Roth IRA for RMD reasons. The annuity adds no RMD benefit there.

Pros and Cons of Annuities for RMD Planning

Annuities solve some RMD problems and create others, so weigh both lists before you buy.

Pros

• Immediate annuities cover the RMD on the annuitized amount through regular payments.
• QLACs are the one IRS-approved RMD exclusion, for premiums up to the QLAC limit, until payments begin.
• Non-qualified annuities have no RMDs during the owner's life.
• Annuities inside Roth IRAs pair tax-free growth with no lifetime RMDs.
• Partial annuitization can lower what you must take from the rest of the account, but only if you make the aggregation election.

Cons

• Surrender charges in a contract's early years can make RMD withdrawals costly, though many contracts waive the charge on RMD withdrawals.
• Annuitized money is locked into a fixed schedule, so larger sums are out of reach for emergencies.
• Variable annuity values can fall while your factor keeps shrinking, which makes the RMD harder to plan for.
• Inherited qualified annuities combine the 10-year deadline with possible annual RMDs, a frequent penalty trap for heirs.
• Mortality and expense charges, administrative fees and rider costs reduce the balance over time.

State-Specific Considerations

Federal RMD rules are the same in every state. State income tax and state premium tax are not.

State Income Tax Treatment

Most states tax qualified annuity distributions as ordinary income. A few exempt retirement income.

Pennsylvania does not tax distributions from eligible retirement plans taken after retirement age. An RMD from a qualified annuity there is subject to federal tax only. Illinois also exempts retirement income from its state income tax.

California has no retirement income exemption. A $20,000 RMD taxed in the state's 9.3% bracket for tax year 2026 adds about $1,860 of state tax on top of federal tax. California's top rate for 2026 is 12.3%, plus a 1% surcharge on taxable income over $1 million, under the Franchise Tax Board rate schedules.

State Premium Taxes on Annuities

A minority of states charge a premium tax on annuities. The insurer pays it and passes the cost on at purchase, at annuitization or at surrender, depending on the state and the contract.

California charges 2.35% on non-qualified annuities and 0.5% on qualified annuities. Maine charges 2% on non-qualified annuities and nothing on qualified ones. Check with your state insurance department before you buy.

What to do next

1. Find each annuity's December 31, 2026 value in Box 5 of Form 5498 or on your year-end statement.
2. Ask the insurer whether that value includes riders and whether RMD withdrawals avoid surrender charges.
3. Divide each qualified balance by your 2027 factor in IRS Publication 590-B.
4. Take each 401(k) RMD from that 401(k) by December 31, 2027.

Frequently Asked Questions

Do I have to take RMDs from my non-qualified annuity?

No. A non-qualified annuity bought with after-tax dollars has no RMDs while you are alive. After your death, heirs must take the money within 5 years or as life payments. Your contract may also set a maximum maturity age.

Can I satisfy my IRA RMD from a qualified annuity?

Yes. An IRA annuity's value counts toward your total IRA RMD, and you can withdraw from the annuity or any other traditional IRA. The insurer reports the December 31 value and must offer to calculate the RMD, but combining accounts is your job. Annuitized payments cover other IRA money only with the aggregation election.

Does a QLAC eliminate RMDs completely?

No. A QLAC keeps premiums up to the QLAC limit out of your RMD calculation until payments begin, which must be by age 85. The rest of your balance still has RMDs. You can buy one with 401(k) money if the plan offers it, or roll the money to an IRA first.

Are Roth IRA annuities subject to RMDs?

No, not during the owner's lifetime. A Roth IRA, including any annuity inside it, has no lifetime RMDs. After the owner dies, most beneficiaries must empty the account within 10 years.

What happens if my annuity payment is less than my RMD?

You must withdraw the difference. Annuity payments count toward the RMD on your other IRA money only if you make the aggregation election. Otherwise each contract or account covers its own RMD, and any gap must come from the remaining balance.

Can I use my spouse's annuity to satisfy my RMD?

No. Each person must satisfy their own RMD from their own retirement accounts. A spouse's accounts are separate for RMD purposes.

Do inherited annuities require RMDs immediately?

It depends. Any RMD the owner missed in the year of death is due that year. If the owner died on or after the required beginning date, annual RMDs start the year after death. Most heirs must also empty the account by December 31 of the 10th year.

Can I roll a qualified annuity to avoid RMDs?

No. The receiving account has the same RMD rules, and the current year's RMD cannot be rolled over or converted. The only ways around lifetime RMDs are a Roth conversion, which is taxed, or a QLAC, which is limited.

Does annuitizing my IRA eliminate RMD calculations?

Mostly yes. Life annuity payments that follow the regulations satisfy the RMD for the annuitized amount every year. The purchase year needs care, because that year's RMD comes from the prior December 31 balance.

What is the penalty for missing an annuity RMD?

Twenty-five percent of the amount you failed to withdraw. It drops to 10% if you take the missed amount and file Form 5329 within the correction window, generally the end of the second year after the miss. You can also ask the IRS to waive it for reasonable error.