By Ian Berger, JD
IRA Analyst
Question:
I have an IRA holding an immediate annuity as well as other IRAs. With the passage of the SECURE 2.0 Act, l understand that I may be able to apply my monthly annuity payments against my RMD requirement for all of my IRAs. The only valuation I can get on my annuity is the year-end fair market value. Can you provide any update to any IRS ruling on this?
Tom
Answer:
Hi Tom,
Your understanding of the SECURE 2.0 provision is correct. The IRS confirmed this in regulations issued last July. Since you have a year-end valuation of the annuity from the insurance company, you can take advantage of this rule. For 2025, first calculate the total RMD of all of your IRAs (using 12/31/24 values divided by your life expectancy under the IRS Uniform Lifetime Table). Then, you will only need to take RMDs from your non-annuity IRAs equal to that total RMD minus the sum of your monthly annuity payments.
Question:
In a previous answer to a question submitted to the Slott Report Mailbag, you said section 327 of the SECURE 2.0 Act applies to an IRA inherited by a spouse beneficiary. I thought that these new rules for spouse beneficiaries only apply to spouse beneficiaries of employer plans and not IRAs. Is this true?
Answer:
No, the IRS has made clear that the section 327 rules apply to spouse beneficiaries of both employer plans and IRAs.
https://irahelp.com/slottreport/rmds-for-annuities-and-spousal-beneficiary-rules-todays-slott-report-mailbag/