Taking multiple RMDs from a single IRA.
I have a client that is retired and has two 403(b) accounts that were direct transfers to an annuity with a well known insurance company; the annuity was issued as a 403(b) annuity designation.
Question: Can ALL RMD’s (including this these 403(b) annuities) be taken from a single, Traditional IRA?
Permalink Submitted by Alan - IRA critic on Wed, 2021-03-03 18:12
RMDs can be aggregated between 403b accounts and also between IRA accounts, but 403b and IRA RMDs cannot be aggregated with each other.
Permalink Submitted by Troy McMahon on Wed, 2021-03-03 22:37
All of the IRAs are in annuities. Are you saying that RMDs applicable to all ANNUITY accounts that are designated as a 403(b) annuity accounts MUST be taken from only a 403(b) annuity? and likewise, RMDs from all Traditional IRA annuity accounts MUST only be taken from a Traditional IRA annuity.
Permalink Submitted by Alan - IRA critic on Wed, 2021-03-03 22:51
If an account is a 403b (formerly referred to as TSA, tax sheltered annuity), it is not an IRA. The RMD for a 403b annuity can be withdrawn from that account or another 403b account, but since 403b administrators do not know about other accounts, they may force out the RMD for their own account. Therefore, each 403b annuity will probably have to distribute it’s own RMD.
IRAs on the other hand are controlled by the client, and therefore the client can split up the IRA Annuity RMDs in any proportion he chooses if they have not been annuitized. If an IRA annuity has been annuitized, then the payments from each such IRA annuity are the RMDs for that annuity only, and could not be aggregated with other IRA annuities.
Yes, TIRA annuity RMDs can only be taken from TIRA annuities, but if they are annuitized each TIRA annuity will be distributing it’s own RMD.
To add to the complexity, a non annuitized IRA annuity may have enough fringe benefits that the client cannot determine the RMD just from the year end cash value. He will have to ask the insurance company to tell him what the RMD amount is. The calculations are complex and only the insurance company can do them. Once he knows the RMD for each TIRA annuity, he could aggregate them (non annuitized).