IRA invested in SPIA | Ed Slott and Company, LLC

IRA invested in SPIA

Wanting to verify the following: A friend had a traditional IRA invested in mutual funds with Vanguard. Friend moved the IRA to a broker advisor after the funds were liquidated who then put the proceeds into a SPIA. Wanting to confirm that this does not represent a taxable event as the SPIA is still within the IRA.

 A rollover or transfer to an IRA SPIA is not taxable, but the periodic payments from the SPIA will be taxable. Furthermore, if this is a life or joint life annuity, the distributions are treated as RMDs even if they start prior to 70.5.

 

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