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Old 01-16-2015, 05:46 PM
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Annuity inside a conventional IRA

A fraction of my conventional IRA is in the form of an Annuity.
The Annuity is already Annuitized
I receive monthly regular payments, that may change year to year.
In 2015 I will be subject to MRD.

Does the Annuity amount add to the sum of all conventional IRAs?


In my way of thinking an annuitized annuity is already distributed targeting depletion by the end of my actuarial life, therefore should not be included in the MRD calculations.

The distribution rate is 1/20th of the value, already greater than the 1/27.4 specified as MRD, at least for a few years.

Still I need to know the IRS rule.



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Old 01-17-2015, 02:55 AM
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Join Date: Oct 2010
Posts: 5,236
Quote:
Originally Posted by Endmill View Post
A fraction of my conventional IRA is in the form of an Annuity.
The Annuity is already Annuitized
I receive monthly regular payments, that may change year to year.
In 2015 I will be subject to MRD.

Does the Annuity amount add to the sum of all conventional IRAs?


In my way of thinking an annuitized annuity is already distributed targeting depletion by the end of my actuarial life, therefore should not be included in the MRD calculations.

The distribution rate is 1/20th of the value, already greater than the 1/27.4 specified as MRD, at least for a few years.

Still I need to know the IRS rule.
Annuitization is computed using actuarial tables. These tables take into account the annuitant's life
expectancy and interest earned. It's the annuitant whose life is of primary importance in determining
the timing and amount of the payout. Thus, the annuitant's life is the "measuring life."
In the case of joint and survivor annuity options, an actuarial table containing both the annuitant's
age and the designated survivor's age must be used to calculate the amount of the periodic
payments. Payments for life provides the owner with payments for life only, and then they end; Payments for life with term certain provides the owner with payments for life, and, after the owner's death, the payments
continue to a named beneficiary for the remainder of the original specified period of time (generally
5, 10, 15, or 20 years); Payments for a specified period
provides the owner with payments for a specified period of time (generally 5, 10, 15,
or 20 years). If the owner dies before the specified time period has elapsed, the remaining
payments are received by a named beneficiar; Refund life provides the annuitant with income for life, but if the owner dies before the total
amount of the annuity is received, the balance is paid to a named beneficiary. The named
beneficiary may receive the balance in a lump sum or in installments.



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