Rules for Rolling 457 Assets in to an Annuity

[calbear]

I'm an FE guy. I have a client who is 71 years old. Pretty good health. She has $57k in a 457 plan. Just entered the RMD phase. She is unhappy with the close to 0% return on her investments in the 457 account. Can she liquidate the assets in her 457 plan and purchase an annuity w/o paying income tax during the switch? If so, how does this impact the RMD requirement?

 

[Tahoe Ray]

Can she liquidate the assets in her 457 plan and purchase an annuity w/o paying income tax during the switch?

Yes. You can do a trustee to trustee transfer from the 457 to an IRA without creating a taxable event.

If so, how does this impact the RMD requirement?

She'll still have to take RMDs.

 

[goillini52]

I'm an FE guy. I have a client who is 71 years old. Pretty good health. She has $57k in a 457 plan. Just entered the RMD phase. She is unhappy with the close to 0% return on her investments in the 457 account. Can she liquidate the assets in her 457 plan and purchase an annuity w/o paying income tax during the switch? If so, how does this impact the RMD requirement?

Funny how quickly you get the answer you're looking for when you post the question in the correct Forum.

 

[calbear]

Funny how quickly you get the answer you're looking for when you post the question in the correct Forum.

Haha. I'm learning.

 

[jacobtn]

I thought you got your answer in the FE forum as well. Of course the RMD requirement doesn't change.

 

[walthamny]

If she does not need the RMD money and hates paying taxes, she could donate the RMD to charity. Her income will remain the same. RMD becomes tax free.