RMD in the first year, with 10% free withdrawals AFTER year 1?

[Justin Bilyj]

Have a client whose worried to sick about keeping his nest-egg in the market - and likes the idea of an indexed annuity. What product/company do you put clients who're currently taking RMD's? I see many companies offer penalty free withdrawals after the first year, but not many for the first year...
Appreciate any guidance on this.

 

[Stephen]

You could leave enough in the current IRA to cover all of his RMD's for the first year.

 

[scagnt83]

There are a bunch that offer free withdrawals in the first year. Great American is one. I think Athene has some options too that allow it.

Great American's 7 year product is really nice and allows for year 1 withdrawals. Cap is around 6% right now I think. American Legend III

Another option is to set them up with an income rider that allows for income in year 1. Athene has an option for that too I believe. GA probably does too.

 

[Justin Bilyj]

You could leave enough in the current IRA to cover all of his RMD's for the first year.

I thought about that, but I thought rmd wording was for each qualified account, not cumulative for all qualified funds. Can anyone verify?

 

[DHK]

You could satisfy RMDs are for ALL IRAs with a withdrawal from one IRA.

However, suppose that you bought a SPIA for an IRA. It would only count for all IRAs one time for the year the SPIA was purchased... and the subsequent year, you'd have to satisfy the additional RMD requirements from any remaining IRAs outside of the SPIA.

https://www.irahelp.com/forum-post/16630-spia-and-rmd

 

[scagnt83]

They are correct. The amount distributed is based on all of the accounts combined, but the withdrawal does not have to come from each separate account.

 

[Stephen]

I thought about that, but I thought rmd wording was for each qualified account, not cumulative for all qualified funds. Can anyone verify?

You don't trust me ?

 

[DHK]

https://www.irs.gov/pub/irs-pdf/p590b.pdf

Page 12 of the PDF:

More than one IRA.
If you have more than one traditional IRA, you must determine a separate required minimum distribution for each IRA. However, you can total these minimum amounts and take the total from any one or more of the IRAs.