RMD Question

[oitbso]

I have a traditional IRA account (holding stocks, funds, etc.) and a separate IRA account holding a variable annuity. The annuity will eventually provide the larger of either a guaranteed minimum distribution (protected withdrawal value) or a distribution based on the actual contract value. I am currently in my sixties and have not taken any IRA distributions. I will not start annuity distributions until my mid-seventies, after my RMDs have started.

My questions are:
1) When I take my first RMD at 70 1/2, that RMD will come completely from my traditional IRA account (I will not yet have started distributions from my IRA annuity). Is the RMD based solely on the value of my traditional IRAaccount? If not, then I assume the IRA annuity plays some role in determining the value of my IRA accounts, what "value" of the IRA annuity do I useto find the total value of my IRA accounts?

2) Later, once distributions from my IRA annuity have started (do you say it has become "annuitized" at this point?), I understand that some tax professionals advise their clients to combine the "values" of their traditional IRA and IRA annuity accounts so that the annuity distribution can be used to lessen distributions from the traditional IRA account. Is there any IRS position on this? If not, would such a strategy be considered low or high risk?

I am preparing to meet with my financial and tax professionals on this subject and wanted to have a basic understanding of the matter before I walk in....TIA, Ron

 

[joeu2004]

Obviously, this was posted to the wrong NG. Apparently, Ron realized that
himself and later posted to the correct NG, misc.taxes.moderated.


----- original message -----
I have a traditional IRA account (holding stocks, funds, etc.) and a
separate IRA account holding a variable annuity. The annuity will
eventually provide the larger of either a guaranteed minimum distribution
(protected withdrawal value) or a distribution based on the actual contract
value. I am currently in my sixties and have not taken any IRA
distributions. I will not start annuity distributions until my
mid-seventies, after my RMDs have started.

My questions are:
1) When I take my first RMD at 70 1/2, that RMD will come completely from my
traditional IRA account (I will not yet have started distributions from my
IRA annuity). Is the RMD based solely on the value of my traditional IRA
account? If not, then I assume the IRA annuity plays some role in
determining the value of my IRA accounts, what "value" of the IRA annuity do
I use to find the total value of my IRA accounts?

2) Later, once distributions from my IRA annuity have started (do you say it
has become "annuitized" at this point?), I understand that some tax
professionals advise their clients to combine the "values" of their
traditional IRA and IRA annuity accounts so that the annuity distribution
can be used to lessen distributions from the traditional IRA account. Is
there any IRS position on this? If not, would such a strategy be considered
low or high risk?

I am preparing to meet with my financial and tax professionals on this
subject and wanted to have a basic understanding of the matter before I walk
in...TIA, Ron

 

[Don Guillett]

Obviously, this was posted to the wrong NG. Apparently, Ron realized that

himself and later posted to the correct NG, misc.taxes.moderated.





----- original message -----


I have a traditional IRA account (holding stocks, funds, etc.) and a

separate IRA account holding a variable annuity. The annuity will

eventually provide the larger of either a guaranteed minimum distribution

(protected withdrawal value) or a distribution based on the actual contract

value. I am currently in my sixties and have not taken any IRA

distributions. I will not start annuity distributions until my

mid-seventies, after my RMDs have started.



My questions are:

1) When I take my first RMD at 70 1/2, that RMD will come completely from my

traditional IRA account (I will not yet have started distributions from my

IRA annuity). Is the RMD based solely on the value of my traditional IRA

account? If not, then I assume the IRA annuity plays some role in

determining the value of my IRA accounts, what "value" of the IRA annuity do

I use to find the total value of my IRA accounts?



2) Later, once distributions from my IRA annuity have started (do you say it

has become "annuitized" at this point?), I understand that some tax

professionals advise their clients to combine the "values" of their

traditional IRA and IRA annuity accounts so that the annuity distribution

can be used to lessen distributions from the traditional IRA account. Is

there any IRS position on this? If not, would such a strategy be considered

low or high risk?



I am preparing to meet with my financial and tax professionals on this

subject and wanted to have a basic understanding of the matter before I walk

in...TIA, Ron

Even so a snippet from my own rmd spreadsheet for 1 ira.Put in factors
1/factor balance/factor

Age Factor Year " Year End" RMD
70 27.4 3.65% 2005 $38,463.75 $1,403.79
71 26.5 3.77% 2006 $44,119.37 $1,664.88
72 25.6 3.91% 2007 $46,082.84 $1,800.11
73 24.7 4.05% 2008 $24,954.71 $1,010.31