“I am 72 and must take RMDs from my three IRAs. Two are invested in mutual funds and one in an annuity. Each sends me a letter toward the end of the year telling me to take my RMD and how much I have to take.
My mutual fund IRAs have done quite well, but I’ve had nothing but trouble with the annuity. The returns haven’t been good, the salesman won’t help, and the company gives me no service at all.
Why can’t I just take all my RMDs from the annuity and leave my mutual funds alone?”
Are you sitting down? You can.
The IRS doesn’t care from where the RMDs are taken. They only care that the total required amount comes out of some IRA – and that the required tax – if any – is paid.
You may even have a more pleasing option. If you tax bracket is low enough. Or if the amount you have in your annuity is modest, you may be able to wipe out the entire annuity in one withdrawal and be done with that company forever.
Be sure you look at your tax numbers carefully. Use a professional tax preparer (Enrolled Agent or CPA) to advise you. In either event, you’ll be on your way to a much happier RMD result.
If you have questions or comments, please send them to Gene@AskMtM.com