Advanced Underwriting Consultants

Question of the Day – July 28

Ask the Experts!

The professionals at Advanced Underwriting Consultants (AUC) answer the tax and technical questions posed by producers.  Here’s the question of the day.

Question: My client is older than 70 ½, and is considering annuitizing her IRA for life.  She has not yet taken her RMD for 2011.  If she annuitizes, the month annuity payments for the remainder of 2011 will not equal or exceed the RMD based on the 12/31/10 account balance. Will the annuitization satisfy the 2011 RMD requirement?

Answer: Probably not.

The conservative recommendation would be that the client take a distribution prior to annuitizing so that the total of payments received in 2011 (annuity monthly payments plus the lump sum distribution) does equal at least the RMD calculated on the 12/31/10 account balance.

Have a question for the professionals at AUC?  Feel welcome to submit it by email.  We may post your question and the answer as the question of the day.